We hear more and more talk in the mainstream media of dropshipping. But what is dropshipping? What are the advantages ? Its disadvantages? What is it? Why is it so popular now?
What is dropshipping?
The principle of dropshipping is relatively simple. This involves selling products to customers without having the stock. But how is this possible? Simply because the supplier sends the product directly to the customer during each order. The e-commerce site of dropshipping is only a simple intermediary between the customer and the supplier and he never has the physical product in his hands.
If you also want to create an e-commerce dropshipping site, the principle is very simple:
- Create an e-commerce store with Shopify
- Find the products you want to sell on AliExpress
- Install Oberlo on your Shopify and in a few clicks all product information is integrated into your shop
- When an order is placed, you order the product from the supplier to send it directly to the customer
This mode of sale therefore offers the retailer a great deal of flexibility and the possibility of offering its customers a very large number of products without incurring storage costs.
There is a new form of dropshipping that is gaining more and more importance, it’s the POD (Print on Demand). It is always the same principle, except that in this case, the supplier makes the product for the customer on demand. This is usually a product that the seller will have asked the supplier to customize such as t-shirt, mug, polo, etc … If you want to know more about the POD, take a look to our article on this topic.
To summarize, dropshipping is a method of reselling products without owning the stock. The whole problem of logistics being delegated to the supplier. The owner of the ecommerce site then only has to manage the product sheets and the ecommerce site.
Do you like the idea? Before you start and create your account on Shopify, read before the advantages and disadvantages of this type of business online.
What are the advantages of dropshipping?
As you’ve probably already noticed, dropshipping has a lot of advantages for the shopkeeper. You will find some below :
- No inventory management and logistics.
- Since there are no inventory to manage, the creation of an e-commerce site can be done with very little money. The working capital requirement is very limited (your customers pay you and you order the product from the supplier).
- No inventory and little risk of rupture. If this is the case you can change providers easily.
- Margin very interesting following the products and the competition you can resell very often resell the products, 3,4 or 5 times the amount that you buy it.
- Ability to test products very easily and add them in minutes on your e-commerce store without any cost.
- Very little setup fee, you will mainly have to pay your monthly subscription Shopify at 29 euros per month. You can also enjoy 14 free days by clicking here.
- With dropshipping and self-entrepreneur status, it’s very easy to start your own business.
- Easy and fast start. You can create your business in a few days and your e-commerce site in a few hours thanks to the lack of inventory management.
- You are free and independent to work on your e-commerce shop from the place you want, whether from home, on the train or on the other side of the world sipping a mojito on a Mexican beach.
What are the disadvantages ?
There are nevertheless some disadvantages to dropshipping :
- The supplier is not the person responsible for the order. As a reseller you are responsible to the customer. If a product is defective, a delivery happens badly or if the product is faulty your responsibility may be incurred when you have never had the product in your hands. It is therefore crucial to have trusted suppliers.
- You lose control over certain areas of your business that you delegate to the vendor, such as product quality, order fulfillment, and timeliness of deliveries. Once again, the choice of suppliers is crucial.
- The vast majority of dropshippers work with Chinese suppliers. Delivery times are often 2 to 3 weeks and some customers may find this very long. Plan to have a lot of after-sales service.
- Your suppliers have your customer data since they are doing all the logistics part. They are no longer unique to your business.
- More and more fierce competition is taking place. Everyone wants to take advantage of this business model very easy to implement.
Why is dropshipping so popular right now?
The dropshipping is currently on the rise, why such a craze currently?
There are many reasons for this popularity of dropshipping from entrepreneurs. As we have seen before, dropshipping has many advantages for the entrepreneur who can create an online business very quickly and with very little financial input.
More and more youtubers are promoting dropshipping by offering training to hundreds or thousands of euros by promising pharaonic gains. Be careful though when you buy a training. Many trainings are often incomplete, not up to date, sometimes even erroneous. Compare the different formations well before making your choice.
These youtubers who in their video show images of beautiful cars and paradisiacal beaches, make people want to jump in the dropshipping, they say then “why not me?”. The future entrepreneurs have good reason to start, if you train properly and with a little experience, dropshipping can change your financial situation drastically.
The number of suppliers and therefore possible products in dropshipping are increasing day by day. This will create new opportunities and new niches to exploit.
The dropshipping still has good days in front of him.
Is dropshipping legal?
The dropshipping is completely legal. There is nothing illegal about not owning the stock of the products you sell. Some people are critical of dropshipping because some dropshippers out of earnings, lack of knowledge, or professionalism put themselves in illegal situations. Some dropshippers do not deliver their customers, do not have after-sales service, sometimes have no legal entity and company, do not pay VAT or customs fees for products they import into France for their client, etc …! These people are often in total legal or tax illegality and give a bad image of dropshipping.
If you do things right, you will not be worried if you do dropshipping. Just follow the rules.
Dropshipping can be a great way to start your first business on the Internet. It requires little financial investment and few technical skills. You will especially need a good marketing offer. And you, do you already have your e-commerce shop? Are you ready to launch your new shop? If so, do not wait any longer and take action!