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Dropshipping and everything you need to know to profit online

Dropshipping and everything you need to know to profit online



When you start your ecommerce store, you may wonder how to access the stock of products, or where they are stored.

In the traditional way of working, retailers are responsible for the end-to-end order fulfillment process, which often means renting out warehouse space for products, handling supply chains, managing inventory, and managing shipping costs.

But fortunately today, I do not have to deal with this whole model, but there is an alternative business model to meet customer requests submitted through an online store known as: Dropshipping, where we will review the most important information about dropshipping that is useful to know.


What is Drop Shipping:

The idea of the dropshipping sales system is: for the customer to order a specific product from your store or business. Where it is possible for your store or project to be:

  • ·       Real on the ground by displaying samples of products, or a catalog that the customer can choose from.
  • ·       By default in the form of your own e-commerce website, ensuring you reach a larger segment of customers.

The order is then transferred to the provider or wholesaler, manually or automatically and usually the supplier is a manufacturer of the goods or a wholesaler, allowing you to earn a good profit. Where the provider ships the product to the customer directly to his address after the provider pays for it (wholesale price). But in this case, your store logo will be placed on the products instead of the wholesaler's logo. The name of the provider thus remains completely anonymous to the customer.


What is the principle of Drop Shipping?

 The dropshipping system follows a simple supply chain as follows:

First, the customer places an order for a specific product from your store/business:

Where your store or project can be:

  • ·       Real-world samples of products are displayed, or a catalog that the customer can choose from.
  • ·       By default in the form of your own e-commerce website, ensuring you reach a larger segment of customers.
  • ·       Available on global e-commerce marketplaces such as Amazon, eBay or others.

Second , transfer the order to the provider or wholesaler, manually or automatically:

The supplier is usually a merchandise manufacturer or wholesaler, which allows you to earn a good profit from the difference between the wholesale price and the price you offer customers in your store.

Third, the supplier ships the product to the customer directly:

This is after you pay for it (wholesale price), but in this case your store logo will be placed on the products instead of the wholesaler's logo. The name of the provider thus remains completely anonymous to the customer.


Who is Dropshipner?

Dropshipner is a person or company that uses the dropshipping model to buy inventory and third-party logistics, rather than storing and shipping products themselves.

Because dropshipping relies on an external vendor to handle inventory storage and fulfillment orders, the dropshipping process may be managed by dozens of employees or a single employer.


Is dropshipping suitable for your business?

It depends on several things that are worth taking into account, and we will show you some information about dropshipping and questions you can ask yourself:

How do you want to build your brand?

Your brand is the look and feel of the customer-facing aspects of your business. Building an unforgettable brand impression can help increase customer loyalty.

Although you may be able to create a branded experience for online marketing, dropshipping gives you less control over product quality, delivery experience, and final package aesthetics, if the products and packaging fall short of expectations, the customer may choose not to buy from your brand again.

Dropshipping suppliers often provide little space to customize the product. This limitation may make it difficult to differentiate your brand from the competition.

How much control do you want over the quality of the product?

Product quality can have a significant impact on other aspects of your business such as customer acquisition, brand loyalty, and revenue, and although you may be able to inspect the quality of products at the beginning of dropshipping operations, you likely have limited control over the quality of the items you sell on an ongoing basis.



How to profit from dropshipping:

This type of sale is a feasible and effective way to generate income, as the user acts as an intermediary between the manufacturer and the customer or wholesaler. Working in dropshipping won't make you need a warehouse to store products and you won't need huge capital to start a business. You can simply buy products only when customers order and ship them to them.

Create an online store:

The marketing process depends on the store on which the products are offered, so you have to create your own online store so that you can display them carefully according to several standards from different sites and suppliers. It's also important that the store is user-friendly so you can attract users to positively uptake products.

Configure store settings to display products:

You should take care of preparing the site to sell products and receive shoppers by setting up the appropriate language, targeting a template that suits the products offered, and preparing a description of the products and images that are displayed on the product page.

Access to dropshipping locations by:

  • ·       Search for the highest quality and valuable products for the target audience.
  • ·       Provide the opportunity from the site to browse its own store so that you can know what is available constantly.
  • ·       Agree on a payment method that suits you so you can get your earnings.
  • ·       Communicate with dropshipping locations near your location to avoid getting into trouble.

Design your own brand:

One of the most important ingredients for the success of e-commerce is good marketing and reaching potential customers. So you need to design a brand specific to your online store that leaves an impact on the target audience.



Benefits and information about dropshipping: 



We will show some of the most important information about dropshipping that makes it a popular e-commerce business model for both large and small businesses.

Easy to get started:

Managing an e-commerce business is much easier when you don't have to deal with physical products, and with dropshipping you don't have to worry about managing or paying for the warehouse, packing and shipping your orders, tracking inventory for accounting reasons, processing returns and incoming shipments, ordering products consistently and managing the stock level.

Flexible Location:

With dropshipping, you can run a successful business from anywhere with an internet connection, as long as you can communicate with suppliers and provide timely service and support that meets customer expectations, you can operate and manage your business.

Easy to test:

Dropshipping is a useful fulfillment model for both a new store launch and for business owners looking to test customers' consumption of additional product categories, for example: accessories or brand new product lines.
The main benefit of dropshipping is: the ability to list products and possibly sell them before committing to buying a large amount of inventory.

Low capital:

Perhaps the biggest advantage of dropshipping is that it is possible to launch an ecommerce store without having to invest thousands of reais in inventory.
In the traditional business system, the retailer has to bear the cost of everything from bricks and mortar or e-commerce to connecting huge amounts of capital purchase inventory, and here is also capitalless e-commerce,
but with the dropshipping model, you don't have to buy a product unless you have already made the sale and the customer has paid for it.
Also, since you are not committed to selling through any inventory purchased upfront, as in other business models there is less risk.

Easy to measure:

With any traditional retail business, if you receive three times the number of orders you will usually need to do three times more work, but by leveraging dropshipping suppliers most of the work will be done to process additional orders by suppliers, allowing you to scale with little increased hassle and less overtime.

Product diversity:

 Because you don't have to pre-purchase the items you sell, you can offer a range of popular products to your potential customers, and you can rotate or change your dropshipping product list without having to worry about unsold inventory. If suppliers stock an item, you can put it up for sale in your online store at no additional cost.

Few hassles:

Since you don't have to deal with buying inventory, your overheads will be very low, as many successful dropshipping stores run as home businesses, require a laptop and some recurring expenses to operate.



Dropshipping steps for beginners:

First: Choose a specific type of product to sell in  a drop shipping way. In order to succeed in profiting in this way, you have to specialize in a specific type of product. Yes, the idea of free choice of products is tempting, but the idea of owning a specialized and famous brand with a certain type of product is a very important path to your success.

Second: Building an online store, where you can start creating your own online store and have a good knowledge of dropshipping platforms or sites above.

Third: Contracting with a dropshipping supplier This is a very sensitive and important point. There are a lot of dropshipping suppliers who may be wholesalers, department stores, or factories.

You have to make your choices here precisely and according to your specific circumstances, including your target market (the country where you want to sell your products).

·       And whether the supplier allows the shipment of products to her or not.

·       And what kind of products you would like to sell in your store.

·       What prices suppliers offer and how they suit you.

Fourth: If working in the dropshipping business, you must adjust the payment method for buyers from your store, and determine the way in which you will pay suppliers.

Fifth: Create a marketing plan and build a brand for your store. Your success in drop shipping depends largely on your success in marketing, and working to publicize your store among potential buyers. This includes running advertising campaigns on social media sites and on Google Ads.




What is the target profit margin?



Compared to other business models such as owning a retail store or building your own order fulfillment center, dropshipping has less barrier to entry which can mean more competition for your business.

The playground can be very competitive for companies that use dropshipping, and dropshipping vendors are usually able to offer products at low prices because they have invested too little.

If you use dropshipping for your business, you may earn low profit margins.

You may be able to overcome some of these issues if you put your business in a niche outside of any highly competitive field, try to research potentially profitable or less competitive areas through market, networking, and sales research. Or invest in branding your brand.


What are the advantages of drop shipping:

The drop shipping system is  a great business model for aspiring entrepreneurs, and gives them the opportunity to learn how to choose the required products and choose the shipping method and market them professionally. So get to know its most important features:

1. No large capital:

As we said earlier, you can only pay money when the customer orders the product and activates the purchase option.

2. You can easily get started in this field:

It will be easy to manage an online store when you don't have to deal with physical products, you won't be worried about:

  • ·       Warehouse management and rent payment.
  • ·       Product packaging and shipping.
  • ·       Low overhead.

It won't take more than a computer and good internet, so you won't worry about warehouses, production and other things that require huge expenses.

3. You can work from anywhere in the world:

To get started you only need a computer and an internet subscription. You can also work from anywhere in the world.

4. There are an infinite number of products that you can sell:

There are an infinite number of products that you can sell that customers constantly demand. So you can offer a huge number of products on any of the international stores.

5. Drop Shipping is the best way to test products in the market:

You will have the ability to test any type of product in an easy and efficient way and without additional costs.



What are the disadvantages  of drop shipping:

Despite the many advantages that we mentioned in Drop Shipping , convenience and ease of obtaining income come at a price.

1. Low profit rate:

You will find very huge competition, that everyone can get the same products that you offer. You will find many offering them at very low and competitive prices, which affects profits negatively.

2. Product inventory:

You can face problems such as lack of products ordered by your customers, you do not have reports on the inventory of factories and wholesalers

3. Shipping problems:

shipping process can be a big problem that increases the costs of products, for example, if one of your customers orders more than one product and the products are from different factories, the shipping costs will be very high. It would then be wrong for the customer to bear the costs of production.

4. Errors resulting from wholesalers and factories: 

is very possible that errors occur when shipping products from factories or wholesalers, such as shipping a different product, for example, or shipping it with manufacturing defects.

This is one of the biggest problems because you have to apologize to the customer and give them back their money, despite the loss that will be inflicted on you. Or to order the product again from the factory and ship it again, which are also secondary costs that you bear.




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