How to set up your
Posted: Wed Dec 18, 2024 6:06 am
Do you want to launch an online store with minimal investment and without the need for a warehouse or logistics system? Dropshipping may be the solution you're looking for.
Let's imagine that a supplier put their inventory with thousands of products at your service and that they were in charge of shipping, delivery and returns to your customers.
You would only have to set up an e-commerce and manage it from wherever you wanted. Wait! The supplier can even deliver the store to you already completed and synchronized with them.
Today I'll tell you what this type of business is, what it's for, how it works, and its pros and cons. We'll also go over the main keys to creating your online store with dropshipping, and how to find and choose a good supplier.
What is dropshipping?
Dropshipping is a retail business strategy that involves selling products online that are not in stock . They are purchased directly from the supplier once the sale is closed, and the supplier sends them to your customer. You function as a mere commercial intermediary, and the product goes from the manufacturer to the end customer without passing through your hands.
Unlike a conventional store, which first buys the product, stores it, and then sells it, in dropshipping you first sell the product and then buy it from the supplier. You don't have to store anything.
It is estimated that around a third of e-commerce sites operate this way, because it is a very simple and affordable system, ideal for starting to sell without having to make a large investment.
With this system you forget about inventory management, logistics, shipping costs and storage. And you focus on working on marketing for sales and generating business ideas to continue growing.
To make it profitable, one of the most important tasks you must perform is to calculate the margins that each product leaves you.
How does dropshipping work?
To help you understand more clearly how this business model works, I am going to show you how the buying and selling process in dropshipping works :
Find suppliers that work with this system
You add the products you choose to your online store
The customer buys the product in your store, paying the RRP
You transmit the order and customer data to the supplier, and pay the agreed price for the product and shipping.
The supplier processes the order, adds your logo and sends it directly to the end customer.
As you can see, you act as an intermediary between the client and the supplier , and you earn a commission on the price you set over the wholesaler's price. Your main function is to have a good marketing strategy and to promote the products to encourage sales.
The system is also perfect for the supplier or dropshipper because they can sell many more products, without having to dedicate themselves to maintaining their own e-commerce .
That is, each party takes charge of one aspect of the business.
Advantages and disadvantages of having dropshipping in your online store
Dropshipping is certainly an attractive business model, but it is not without certain risks and challenges. Let's weigh up its pros and cons.
Advantages of dropshipping
Lower initial investment : you do not need a large initial investment, a deterrent when setting up an e-commerce.
Less fixed costs : you do not have a warehouse nor do you need staff to handle and prepare packages.
Elimination of logistics management : no more preparing packages, negotiating with transport companies or managing returns
Flexible location work: You don't have to live in a fixed location because you don't need to run a warehouse.
Variety of products to offer: Not having to purchase products in advance allows you to offer as much variety as you want.
High scalability : you can grow with fewer economic or logistical resources, compared to conventional e-commerce.
Possibility of expanding your current store's catalogue: you can combine products from a dropshipping supplier with those you currently have in your online store, without having to make more space in your warehouse.
Disadvantages of dropshipping in your e-commerce
So far, everything sounds great, so let's address the disadvantages so that you have a 360ยบ perspective that allows you to make an informed decision about whether this type of e-commerce is for you:
Less profits : In dropshipping, products do not have brand differentiation, so they compete on price.
High competition: To stand out, you need to focus on marketing, promotion, and differentiating your online store.
Supplier issues: Dropshippers may make mistakes, but it will be up to you.
Inventory issues: If you don't sync your website's inventory with your supplier's, you may end up selling out-of-stock products.
You are responsible for customer service: when faced with problems with your customers, you work almost blindly, because you have no operational room for manoeuvre.
Difficulty and cost of shipping: It may happen that a customer iraq whatsapp number data buys three products from three different dropshippers. Triple the costs and no control over the process.
Building a brand is difficult: a lack of differentiation negatively impacts your online marketing strategy.
dropshipping business in 7 steps?
If you consider that this method suits your needs or your way of doing business, you need to follow a series of steps to avoid getting lost in unnecessary procedures and start billing as soon as possible:
1. Find a profitable niche
A fundamental key to making money with dropshipping is to choose a product niche that meets two requirements: high demand and low competition .
To find the products in demand, you can use Google Trends, which shows you the most searched trends, and the Google Keyword Planner, where you can find the keywords with the most impact in a specific market niche.
Once you have determined the products you would like to s
Let's imagine that a supplier put their inventory with thousands of products at your service and that they were in charge of shipping, delivery and returns to your customers.
You would only have to set up an e-commerce and manage it from wherever you wanted. Wait! The supplier can even deliver the store to you already completed and synchronized with them.
Today I'll tell you what this type of business is, what it's for, how it works, and its pros and cons. We'll also go over the main keys to creating your online store with dropshipping, and how to find and choose a good supplier.
What is dropshipping?
Dropshipping is a retail business strategy that involves selling products online that are not in stock . They are purchased directly from the supplier once the sale is closed, and the supplier sends them to your customer. You function as a mere commercial intermediary, and the product goes from the manufacturer to the end customer without passing through your hands.
Unlike a conventional store, which first buys the product, stores it, and then sells it, in dropshipping you first sell the product and then buy it from the supplier. You don't have to store anything.
It is estimated that around a third of e-commerce sites operate this way, because it is a very simple and affordable system, ideal for starting to sell without having to make a large investment.
With this system you forget about inventory management, logistics, shipping costs and storage. And you focus on working on marketing for sales and generating business ideas to continue growing.
To make it profitable, one of the most important tasks you must perform is to calculate the margins that each product leaves you.
How does dropshipping work?
To help you understand more clearly how this business model works, I am going to show you how the buying and selling process in dropshipping works :
Find suppliers that work with this system
You add the products you choose to your online store
The customer buys the product in your store, paying the RRP
You transmit the order and customer data to the supplier, and pay the agreed price for the product and shipping.
The supplier processes the order, adds your logo and sends it directly to the end customer.
As you can see, you act as an intermediary between the client and the supplier , and you earn a commission on the price you set over the wholesaler's price. Your main function is to have a good marketing strategy and to promote the products to encourage sales.
The system is also perfect for the supplier or dropshipper because they can sell many more products, without having to dedicate themselves to maintaining their own e-commerce .
That is, each party takes charge of one aspect of the business.
Advantages and disadvantages of having dropshipping in your online store
Dropshipping is certainly an attractive business model, but it is not without certain risks and challenges. Let's weigh up its pros and cons.
Advantages of dropshipping
Lower initial investment : you do not need a large initial investment, a deterrent when setting up an e-commerce.
Less fixed costs : you do not have a warehouse nor do you need staff to handle and prepare packages.
Elimination of logistics management : no more preparing packages, negotiating with transport companies or managing returns
Flexible location work: You don't have to live in a fixed location because you don't need to run a warehouse.
Variety of products to offer: Not having to purchase products in advance allows you to offer as much variety as you want.
High scalability : you can grow with fewer economic or logistical resources, compared to conventional e-commerce.
Possibility of expanding your current store's catalogue: you can combine products from a dropshipping supplier with those you currently have in your online store, without having to make more space in your warehouse.
Disadvantages of dropshipping in your e-commerce
So far, everything sounds great, so let's address the disadvantages so that you have a 360ยบ perspective that allows you to make an informed decision about whether this type of e-commerce is for you:
Less profits : In dropshipping, products do not have brand differentiation, so they compete on price.
High competition: To stand out, you need to focus on marketing, promotion, and differentiating your online store.
Supplier issues: Dropshippers may make mistakes, but it will be up to you.
Inventory issues: If you don't sync your website's inventory with your supplier's, you may end up selling out-of-stock products.
You are responsible for customer service: when faced with problems with your customers, you work almost blindly, because you have no operational room for manoeuvre.
Difficulty and cost of shipping: It may happen that a customer iraq whatsapp number data buys three products from three different dropshippers. Triple the costs and no control over the process.
Building a brand is difficult: a lack of differentiation negatively impacts your online marketing strategy.
dropshipping business in 7 steps?
If you consider that this method suits your needs or your way of doing business, you need to follow a series of steps to avoid getting lost in unnecessary procedures and start billing as soon as possible:
1. Find a profitable niche
A fundamental key to making money with dropshipping is to choose a product niche that meets two requirements: high demand and low competition .
To find the products in demand, you can use Google Trends, which shows you the most searched trends, and the Google Keyword Planner, where you can find the keywords with the most impact in a specific market niche.
Once you have determined the products you would like to s