When we hear the word e-commerce, we also hear about another common trending word “Dropshipping”. Did you ever feel the urge to find out what this means and why is it found on every digital shopping channel? Then let me teach you about this in my article below.

What exactly is dropshipping?

Drop shipping, as the name says itself, this is an order fulfillment method and a form of retail business which does not require you to stock products in a warehouse, or pack and ship them to customers yourself. Instead, the online reseller lists and sells the product on a digital store and passes on the sales order to a third-party supplier, who then ships the order directly to the customer. In this case, the reseller keeps the supplier details hidden, not letting out any information where the product is shipped from and by whom.

Dropshipping sellers do not need to invest in any product inventory, warehouse or storage space, and are free from handling the order fulfillment process. Due to the low overhead costs and simplicity of starting a dropshipping business, it has become a popular and convenient business model for e-commerce retailers, who can smoothly make revenue through virtual stores with easy setup and very little risk.

Within no time, you can make money from drop shipping by adding a profit margin to your product. The merchant will give you their total price and then you add your profit whatever you wish to keep but of course, it should be acceptable, as eCommerce is very competitive. Or else, you would just keep putting in extra efforts to research and list products but may fail to sell due to high and unrealistic profit margin.

Is it profitable if opt for dropshipping?

Dropshipping can be profitable to merchants as it is a low-risk business that allows you to sell products to your customers without incurring huge running costs like a wholesaler would have. Because of these lower costs, it is easier to become profitable with dropshipping a lot faster than other business models.

Does dropshipping provide long-term benefits?

Dropshipping is such a great business model for first-time entrepreneurs/retailers who are afraid of jumping into the e-commerce ocean. You can prepare a business plan through proper detailed research of the market, competitors, products, different sales channels and how it works. The more knowledge you gain, the more easily you could overcome your fear.

By outsourcing manufacturing, warehousing, and shipping to a third-party seller, entrepreneurs are able to keep costs low and focus more on marketing their products.

The retailer is responsible mainly for building an online store or website, selecting products, for marketing and selling those, but has little or no control over product quality, storage, inventory management, or shipping.

Simply, with drop shipping you don’t have to worry about:

• Managing or paying for a warehouse
• Packing and shipping your orders
• Tracking inventory for accurate stock levels
• Handling returns and inbound shipments
• Continually ordering products and managing stock level

Is dropshipping only for digital sellers?

A drop shipping business model does not require a physical store but this does not mean such store owners are restricted from drop shipping. A virtual retailer only has a website, which could alone be powerful enough to get you more earnings compared to a physical store. Condition being, your digital store is top-notch with in-demand products, timely dispatch and successful deliveries with minimum complaints/returns.

On the other hand, a physical retailer may keep potential drop shipped items on display, but drop shipping can occur when a small retailer (that typically sells in small quantities or has low stock level in storage) receives a single large order for a product. The retailer may arrange for the goods to be shipped directly to the customer from the manufacturer or distributor.

Sellers on online auction sites such as eBay also use dropshipping as a means of distributing their listed products without keeping or managing on-hand stock. A seller will list an item on ebay or any preferable sales channel, and when order comes through he will have purchased items shipped directly from the wholesaler to the customer.

In a different scenario, products may be listed by a dropshipping retailer as available but actually be back-ordered either with the wholesaler or the item’s manufacturer.

Why choose Dropshipping?

1. Easy to start with minimum risk – no wasting time and effort on purchasing inventory, no worrying of keeping your warehouse stocked up
2. Small set up before expansion – simply build a single online store and list some products before you reach out to all types of categories and spread your wings onto multiple platforms to sell
3. Less upfront investment – saves you from overhead expenses as no need to keep a warehouse or storage space to store all your products, or pay wages to staff for daily work
4. Hassle-free shipping – you don’t have to overburden yourself with the packing and shipping of products every day, nor are logistics issues your concern
5. Wide range of products – there are a variety of products and categories you could pick from, making the best out of it
6. Access to Multiple sales channels – you are free to set up your online store on any sales platform (such as eBay, Amazon, Shopify) to list and sell on multiple places at the same time
7. Flexibility to ship globally – selling and shipping around the globe is what you could take advantage of to spread your business

How to start a dropshipping business?

Following are the major steps to start and succeed in dropshipping:

1. Choose your market
2. Perform competitor and product research
3. Find a reputable dropshipping supplier
4. Build your online store / website
5. Market your dropshipping business / store
6. Analyze and improve your store

In order to meet the e-commerce standards and achieve dropshipping targets, it would be wise to consider a product management tool which allows you to integrate your own brand/store, get access to variety of suppliers and products, facilitates you with listing and monitoring sales, keeping inventory check.

Last but not the least, such multi-feature tool called Stock Konnect, is affiliated with some best dropshipping companies listed below which you could choose from to get started:

1. Wholesale2B
2. Doba
3. Inventory Source
4. Wholesale Deals UK
5. Sunrise Wholesale
6. Worldwide Brands
7. National Dropshippers
8. Banggood
9. Salehoo
10. Printify
11. AliExpress
12. Syncee

Final Note

Think of dropshipping as a three-step process:

1. The customer places an order and pays product price
2. You forward the order to the supplier and pay wholesale price
3. The supplier ships the product to the customer, and you keep the difference (that is your profit)

Finding the best dropshipping niche is always one of the most important parts of the whole dropshipping process. But you can only find it with the help of tools and experiences for which you need to gather the courage to test the waters. By utilizing the best sources of products and suppliers, you could make a name in the dropshipping world.