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What’s Dropshipping?

Dropshipping is a retail fulfillment model where a merchant works as a middleman between customers and suppliers instead of handling the products himself. You don’t have to pay up front for inventory or handle logistics. Your suppliers will take care of stocking, packing and shipping the products directly to your customers. With the money and energy saved, you’ll be able to focus on attracting customers and scale your business.

How does dropshipping exactly work?

After receiving orders at the online store, the retailer will place orders and send the customer information to the third-party supplier that he cooperates with. The

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Pros and Cons of Dropshipping

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Benefits of Dropshipping

Easy to Start: Dropshipping is a practical and accessible model for those who are eager to start their ecommerce business but with little experience. You can start right away once you figure out where to set up your online store, what to sell and who can be your right suppliers.

Low Investment：You can launch your dropshopping business with minimal investments since you don’t have to purchase inventory, and hence you don’t need to pay for a warehouse nor rent an office. Without the pressure to selling through your inventory, you don’t need to worry about losing money even if you don’t make a sale.

Flexibility: You can get your business operated from anywhere at any time. With only a laptop and the internet, you are good to go. Tired of playing by other people’s rules? Dropshipping might be ideal for you. The flexibility is also reflected in that it enables you to test your strategy with fewer risks, meaning you can list new products or switch to another niche as you wish if you don’t make profits as there is no capital tied up in inventory.

Easy to Grow：In traditional retail model, as your business develops and profits increase, there also come more work and higher costs. By running a dropshipping store, your suppliers will take over most of the work to fulfill the orders. When your business grows, the costs will be relatively low for dropshipping as you don’t need to manage a warehouse. You’ll be able to invest more resources and energy into marketing your business.

Drawbacks of Dropshipping 

 Lower Margins: Since dropshipping has so many tempting advantages, more and more entrepreneurs are joining the game and competing on price for customer’s attention. You might get frustrated by the slim margins at the beginning but don’t quit so early. By selecting the right niche and sourcing from China (https://nichedropshipping.com/service-product-sourcing-agent/) for lower prices, you will face less competition and get better margins. To grow in a long term, apart from (https://nichedropshipping.com) increasing profit margins, it’s better to make efforts to boost sales at the same time.

Lack of Branding：Products branded with your logo or packed with personalized materials can help make impression on your customers. However, you get little chance to do so in dropshipping as you don’t deal with physical products. If you can reach a certain minimum order quantity, there are suppliers that are able to provide services such as private label or branding package (https://nichedropshipping.com/servicebrand-packaging/) to improve the presence of the products for you.

Less Control: Dropshipping frees you from stocking, packing and shipping but this also means you don’t have much control during the process. It’s rather difficult to keep track of your suppliers’ stock as inventory is changing all the time. Therefore, the most common issue is you are told that the product you’ve paid for is out of stock. When you are at the point to scale, it’s reassuring to hold an inventory. This doesn’t mean you have to pay for a warehouse. Ask your supplier if he can offer free inventory storage (https://nichedropshipping.com/service-bulk-inventory-storage/)service.

Where to Run Your Dropshipping Business？ Your sales platform is where you sell your products. Different platforms offer varying levels of flexibility, customization and profit. Each have their benefits and drawbacks. In this chapter, we’ll explore the different sales platforms you could use and their respective pros and cons.

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Online Marketplaces Instead of designing and running your own website, you can sell as a third-party seller on websites such as Amazon and eBay. We’ll look at two major marketplaces: Amazon and eBay. Pros of Selling on an Online Marketplace Exposure – Selling on well-established, regularly used online marketplace giants means your products are exposed to an audience of hundreds of millions without any marketing e ort from you.

Ease of Access – Registering an account and listing your rst product is a quick, easy and cheap process with only slight di erences between marketplaces like Amazon and eBay Trustworthy – A large part of successful business is the returning customer. Selling on an online marketplace gives you access to a user base that already buys from the site on a regular basis.

Cons of Selling on an Online Marketplace

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Listing Fees and Pro t Cuts – eBay gives you 50 free listings per month. Once you exceed that limit, an insertion fee will be charged for every product. Etsy also charges insertion fees per product. Selling on Amazon and eBay will also reduce your pro t margins as both take on average 15% and 10% respectively from your sales price.

Competition – Online marketplaces are easy to sell on, making them saturated and competitive. Finding the right product to sell that isn’t already being sold at a lower price by countless other sellers will be di cult.

No Brand-Building – Do you remember the name of the business of your last Amazon purchase? It’s likely you don’t.

Online marketplaces essentially own your business. You operate within their walls meaning there’s no space for personalization. You won’t be able to build a true brand.

Selling on Your Own Website We’ve explored the ups and downs of dropshipping on a well-established, popular marketplace. Here, we’ll look at why you might prefer to design and run your own personal website to dropship from. Selling from your own website is how you build a brand. You have free reign to design almost every aspect of your business yourself, from the storefront to the package that gets delivered. There are platforms out there that massively streamline the process of designing a dropshipping website, namely Shopify and Woocommerce. Here, we’ll look at the pros and cons of using these platforms to run your website. Pros of Selling on Your Own Website Personalization – When designing a website on Shopify or Woocommerce, you will often have a vast array of templates to choose from. Pick a template and get to work making it look however you like.

No Listing Fee – Besides a monthly payment to keep the website online, all product listing is free and the time that product is listed is up to you.

Variety – What you sell is almost entirely up to you.

Ease of Access – Only marginally more complex than selling on the likes of Amazon and eBay, starting up your own website is a quick, easy and cheap process.

Customer Relationship – In the long-term, through successful business and marketing, you’ll be able to develop a sincere customer base. Something an online marketplace cannot o er.

Cons of Selling on Your Own Website Exposure – Building your own website means you’re starting right at the bottom of audience exposure. It’s down to you to successfully market the sight and grow your audience.

Workload – It’s all in your hands. You’re responsible for the website, the behind-the-scenes logistics such as shipping, the marketing and customer service. However, there are plenty of apps and plug-ins that will help you streamline the operation of your site.

Amazon

Amazon Selling on Amazon The world’s largest online marketplace, Amazon not only stocks and sells its own products, but is also a platform for third-party sellers. With a vast user base and the ease of access, it’s the rst choice of many dropshippers.

Ful lment by Amazon (FBA) takes the weight of logistics o your shoulders and the massive audience is easy to market to.

But success is hardly a guarantee, less so for small businesses with low pro t margins. The price to pay for this perfect (https://nichedropshipping.com) business model is reduced pro ts and a fragile business relationship, with Amazon holding the reigns in terms of how you operate.

eBay Selling on eBay eBay is the world’s largest online auction site with a user base in the hundreds of millions. Much the same as Amazon, listing products on eBay makes them visible to its vast user base and removes the need for extra e ort or expense on marketing and SEO. Getting started is easy and involves simply registering your seller account followed by listing your products for sale. The cheapest account, which is free to start, will have a maximum of 50 free product listings. Beyond that and you begin paying insertion fees for every listed product. On top of insertion fees, eBay also charges a certain percentage of the total selling price when your item sells. Besides, its auction style requires constant re-listing and makes it nearly impossible to build a relationship with customers.

Shopify Selling on Shopify Shopify is a widely popular ecommerce site builder that o ers everything needed to build and grow a business. Making good use of it requires little to no tech skills and start-up costs are incredibly low with a monthly payment of $29 per month to keep the site online. When designing your website, you have many highly customizable themes to choose from. It also o ers an app store with thousands of apps that each serve to streamline and improve your site. Shopify will charge a transaction fee on any purchases that are not made with their payment gateway Shopify payments. Sourcing your products can be through dropship-speci c plug-ins like Oberlo. From there, you have a broad variety of products you can sell. Of course, apart from Oberlo, there are alternatives out there, like Printful, SaleHoo or you can leverage a trustworthy sourcing agent.

Woocommerce Selling on Woocommerce Woocommerce is a plug-in built on WordPress. WordPress is an extremely customizable website builder and, in fact, the most popular website builder on the internet. Starting up your dropshipping business involves choosing a hosting provider (which can cost as little as $5), installing WordPress and nally adding the Woocommerce plugin to WordPress. From there, you have arguably the most customizable and exible Ecommerce builder to start your business on. Both WordPress and Woocommerce are 100% free software but as you continue to develop your Woocommerce site, you’ll begin to run into more payments. Woocommerce has a large selection of payment gateways but many of them will cost you a one-o payment to add to your site. Selling on Woocommerce has immense variety. Unlike Shopify where you’re bound by their terms of service, Woocommerce operates o your site, so you have free reign with your

You may not sure what content will work, just try various types of content and see how the audience reacts.

You can also get inspired by checking out your rivals’ as well as your favorite brands’ posts. As for the best time to post, you’d better test it yourself. Even though there is data indicating the best time to post on different channels, that doesn’t necessarily apply to your business. After finding out the time and the day of the week that see higher engagement, you can set up a posting schedule accordingly and start posting

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regularly. With a steady schedule, you’ll make your presence so that you won’t be forgotten by your audience and they will know when to expect your content.

Content Marketing People don’t like to be told what they need or persuaded to buy. To convert your audience into buyers, you have to prompt them to desire. For that purpose, you need content marketing. Content marketing includes sharing all digital content in any formats such as images, blogs, videos or social media posts mentioned above with the aim of drawing your target customers’ attention. Instead of promoting your products directly, make a how-to video or write a product review. The key is to provide value for your audience. Again, please ensure your consistency. Content marketing is a long-term plan. How can you expect your audience to stay with you if they can’t hear from you on a regular basis?

Email Marketing With the popularization of social media marketing, email marketing now seems to be dying. It’s still worth of serious consideration as it’s a budget-friendly and effective way to get closer to your customers. Rather than attracting new customers, email marketing is better at converting one-time buyers into return customers.

Remind your customers that you are thinking of them and care about them by sending newsletters, informing of promotion and sales, offering discounts and introducing new products. You should get the most out of email marketing and you’ll be surprised by its efficiency in driving sales.

Paid Ads Running paid ads such as Facebook ads might be the fastest approach to bringing traffic to your store. With the huge user base of Facebook, no matter what niche and which country you are targeting to, you’ll be able to reach the right group of people. The advertising solutions Facebook provides are accessible to everyone.

You can run a proper ads campaign even if you just start out with little experience in marketing. There are numerous online resources teaching all you need to know about Facebook ads and you can also learn skills through Facebook’s own free program Facebook Blueprint.