What is Dropshipping _ How Does Dropshipping works_

What is Dropshipping? How does Dropshipping work?

eCommerce is prospering and if you look out, there are plenty of online stores found in the market. Merchandising has grown beyond the stores and is expanding its reach on the internet. Now if you want to buy some product, all you do is search for it online and then browse through the endless catalogs and purchase one. The best part is, you need not even walk into different stores to look for comparing prices of products, as you can skim through an array of products and then compare them right away. With the advent of eCommerce, a number of eCommerce vendors are finding their grip in establishing their businesses online. To provide such vendors with various options to sell their products online, WooCommerce is a great help. You can swiftly set up a WooCommerce online store in a jiffy. Nowadays you can find numerous kinds of stores like wholesale stores, dropshipping stores,multi-vendor stores and single -vendor stores, etc.  Understanding each kind is important when you are into setting up an online eCommerce store.

Dropshipping is one of the easiest,hassle-free store set up that requires not much investment compared to the rest.

Let us take a look at what dropshipping is.

What is Dropshipping?

What is Dropshipping || Dropshipping

Dropshipping is a business model in which the eStore owner does not own any inventory or even manage a warehouse of products. All they do is sell the products online and get the manufacturer or dropshipper to ship their products on the retailer’s behalf to the customers. So here is how the dropshipping process:

  1. An eCommerce seller opens up an eStore with the products from a wholesaler or another store that allows dropshipping. Like for example Alidropshipping.
  2. Whenever a customer visits the store and purchases the product the seller can let the wholesaler or the store know about the order.
  3. The order is then shipped to the customer on behalf of the seller from the main store or the warehouse.

Pros of Dropshipping

Dropshipping is a preferred business model chosen by any retailer. Here are some of the major advantages that make dropshipping a popular choice :

  1. Quick Set up  – A dropshipping store is easy to set up as compared to other stores. It just involves setting up an online store, get the product data and then sell it.
  2. The cost of setting up is comparatively low – A dropshipping store need not require much of an investment in setting up and running the store. All the inventory is managed by the wholesaler, hence once the order is placed, the shipping and packaging are managed by the dropshipper from their warehouse.
  3. No worries about inordinate overhead costs – Most of the business incurs costs upon the setting up warehouses, shipping, etc. A dropshipping seller need not worry about all these things, as there is no need for setting up a store or manage inventory. No overheads like
  4. Lower Risks- Most of the dropshippers look for products that are already in the market, hence there is no risk factor. If your chosen products don’t sell well, then you can move to another one.
  5. The business is independent of location- You can easily manage the online dropshipping store from anywhere. Your location is never a matter to be considered, as the shipping is dealt with the store directly to the customers.
  6. Brew in various products- You can blend in various kinds of products for selling. You also can choose to open up a store upon your niche.
  7. The expansion of business is easy- Managing a dropshipping store is effortless as compared to managing a complete store. Here you get enough time to invest in the expansion of your marketplace with multiple vendors or a great mix of products.
  8. Reduced loss upon damaged goods-  Since you do not manage the shipping of the goods, you need not worry about damaged goods.

Cons of Dropshipping

Just like the umpteen advantages of dropshipping, there are certain disadvantages of dropshipping too :

  1. Liability upon a third-party- As dropshipping is completely dependent on another store, the liability is too high. Moreover, the customer can place only the order with your store, the rest the wholesaler or the manufacturer manages.
  2. Lower profit margins- Compared to the other wholesaling and multi-vendor stores, dropshipping do not earn such great profit. Moreover, brand control is mostly done by the dropshipper than the store owner.
  3. Shipping complexities cannot be handled-Offering shipping for your products must be genuine and effortless. Since the store owner is not responsible for shipping, any damages to the product during the shipping cannot be handled by them.
  4. Competition is higher- Since dropshipping is easy to start with, the competition is comparatively higher.
  5. Inventory management is tricky- Handling the stock quantity is difficult when you are handling a dropshipping store. The seller may not know when the stock gets over or even when the orders get canceled and a backorder is placed.

Hiccups in Selling Dropshipping products

When you are into selling dropshipping products, here are a few things to consider with high vigilance:

  1. Do not choose your products upon your likes and dislikes. You need to thoroughly investigate the products in demand before you choose your niche for your business.
  2. Never sell True copies or illegal kinds of stuff.
  3. Don’t choose to be another bandwagon. Choose your niche rightly before selling.

How does dropshipping work?

Now that you have researched the dropshipping store, decided upon the niche, to begin with, it is time to decide on how does a dropshipping work. Like any other store, managing a dropshipping store also needs time and right marketing. Just starting a dropshipping store, does not just make your products. All you need is the strategic management of marketing and launching the products to the audience.

First of all, for a dropshipping store, you need a supplier, like Alidropshipping, Walmart, etc, who offer you dropshipping opportunities. Then you need a store to manage your dropshipping. You can easily set up an online eCommerce store using WooCommerce, Shopify, etc. without any effort. Once the store is set up, you need to sell the products.

Choosing the right seller

It is important to choose the right seller from the market with a niche product to sell. AliExpress, Walmart, etc offers plenty of opportunities for dropshippers to sell online their products.

Select your online eCommerce platform

To create an online store, you need the right eCommerce platform that can put across your products and help to sell them. Popularly WooCommerce is one of the prime choices of retailers who are into dropshipping. The best part of setting up a store on WooCommerce is that it is open source and is easy to setup.WooCommerce offers an array of plugins that can help you work with the store effortlessly, it is an ideal choice for setting up an online store.

From store management to shipping, WooCommerce has great plugins to offer. Like if you consider setting up a simple catalog mode for displaying the products, then you can make use of ELEX WooCommerce Catalog Mode Plugin (Free) plugin that will effortlessly help you set up the store to display the products.  If you are planning to set up a store that needs to offer a varied pricing pattern for each customer or offer discounts or anything, then, there are plugins like the ELEX Dynamic Pricing and Discounts Plugin for WooCommerce. In similar ways, WooCommerce offers plenty of plugins that will just simply make look the dropshipping work swiftly.

In order to set up a dropshipping store in WooCommerce, you can also make use of the dropshipping plugins, which are popularly in use. You can also take a look at the popular WooCommerce dropshipping plugins like :

These plugins help to set up a dropshipping store quickly. Most of these WooCommerce dropshipping plugins help to set the dropshipping store in a jiffy. These plugins have inbuilt product details for every niche in the market, which needs to be just imported into your online store. After the import, you can easily sell it across. Most of the retailers, lookout for the best dropshipping suppliers in the market and then connect with them to set up your dropshipping store.

If you look out for popular dropshipping suppliers or providers, they provide you with certain rate plans that will help you decide upon the inventory you would like to sell to your customers.  Some of the popular ones are :

All these above dropshipping suppliers offer varied products to sell. It is easier to set up a dropshipping store, with these suppliers. Identifying the right supplier and the product is important to set up a dropshipping store. You can also set up a dropshipping store with multiple vendors selling varied products on your store like Amazon. WooCommerce has plenty of plugins to create a multi-vendor dropshipping store.

Selling the product online

As you are running a dropshipping store, you need to be able to find out how to earn a profit by selling the products. The dropshipping store works by arbitraging the products for the desired profit. It is important to sell the products in a way that the customer comes to purchase from your store. Online marketing is the key to it.

Final Note

Starting a dropshipping store might not be a tough task, though getting the right products to sell and the target audience to buy might be the case to consider. You can also choose to work with a dropshipping store with multiple vendors to market their products also. It is all up to you what to choose from and work on it.

Further Reading

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