Drop-shipping is a method of retail selling without even handling the products. Yes! You read it right. A seller doesn’t need to keep the products in stock or maintain any place for inventory and take the pain of any logistics needs for his e-commerce business. The process is simple where the seller buys the products from a third party and gets it shipped directly to the customer. The process saves a lot of hassle by cutting on operational costs.
Putting it in easier words- Drop-shipping means to sell someone else’s products while getting a cut from it. The biggest advantage as said before, is that the merchant does not have to own any inventory or stock.
Building a successful online drop shipping business
Drop shipping has been gaining a lot of popularity lately. Many people go ahead to make their own brands and sell items online. Since this is a digital era, drop-shipping is a great business model to get going with and is comparatively easier than having a traditional e-commerce site as it requires a lot of efforts like taking care of the shipping, warehouses, inventory and more. On the other hand drop-shipping is easier if done properly. Being comparatively an easier business model doesn’t mean it doesn’t require efforts and time. We have enlisted a few tips for building a successful drop-shipping business:
1. Select a specific niche for your business. Selling a variety of products is difficult as drop-shipping requires a lot of hard work in getting sales. Choose a niche you are passionate about and the one that would have all your focus. Different products would require attention differently and you are likely to get discouraged if the things don’t work out.
2. Drop-shipping requires a lot of marketing and customer acquisition. Amount of efforts required to sell an inexpensive item would be the same to sell an expensive item. Hence, you should seek to sell products with higher profits. So choose a niche likewise.
3. You should make sure to check with the shipping costs as high shipping costs might make customers averse to your online store. So try and find suppliers and products that require low shipping costs. Low shipping costs can also give you a benefit in gaining more customers as you can make shipping free for them and make an attractive deal to entice new customers.
4. Selling some other brands would be of not much good because if people like the product, they will only remember the brand and not behind the scenes of your hard work that has been put on your drop-shipping business. It would be great if you can find products that can be white labeled and sold under your own brand name.
5. A must is to perform research before getting into the business. You should know about the competition for your selected niche. You should go for products that have competition in market and are in high demand.
6. The major part of building a drop-shipping business is tying up with an appropriate supplier. A wrong supplier can damage your business and market reputation, so it is of great significance to research and not to rush for choosing a supplier. It’s better to take your time rather than risking your business.
7. Creating a website can be a daunting task if you do not have a background for the same. Hence, going for ecommerce platforms is an easier way to get ahead with your website as the platforms offer numerous applications for your needs. Even with a limited budget, you can have your website made with all features that are required for your drop-shipping business. Once you know that the business has scaled up, you can explore other website options.
8. The most important factor for a successful online business is digital marketing. Having a great website and good products doesn’t suffice for establishing a successful business; you have to build a customer base. Running Facebook ad campaigns, promoting on Instagram and on other social media platforms is a great idea to get a lot of traffic to your website and get conversions.
9. Analyzing your traffic is a really important step as you require to know where the most of the traffic is coming from and from where the maximum conversions are happening so you can optimize your campaign accordingly.
Advantages of Drop-shipping
- The easy set up: There are many people who desire to try their luck at e-commerce or people who are passionate about being a successful entrepreneur but just don’t know where to start from. In that case, drop-shipping business is a great way to head towards the goals. Setting up a drop-shipping business is relatively easier and the model is very convenient to understand for anyone even if he does not know much about e-commerce businesses. One just needs to tie up with a good supplier, set up a website and begin with the selling process. Drop-shipping makes your worries negligible because:
- You don’t have to pay or manage a warehouse.
- There’s no need to track inventory for accounting purposes.
- No hassle about handling returns or exchanges
- Managing stock
- Money for investment: Unlike traditional retailing model you don’t need to purchase any products unless you have already sold them to a customer. Traditional retailing involves investing on inventory up front and then making sales out of it. This involves the risk of losses if the stock doesn’t sell out. Drop-shipping on the other hand involves negligible risks as you don’t have to worry about any stock. All you need to invest in is a website and digital marketing.
- Overhead expenses: Drop-shipping enables you to have negligible overhead expenses as you don’t have to manage a warehouse or inventory. Most of the renowned drop-shipping stores are running as home-based businesses and do not require expenses to be made like traditional retail stores that involve paying rents, bills and more.
- Location: You don’t have to worry about the location as your drop-shipping store is online and can work from anywhere. There is no hassle of paying rents, electricity bills and more for running the store.
- Time and resources: Traditional retail businesses require more work and efforts for more orders while with drop-shipping this hassle also decreases. You just have to get more orders and everything will be taken care of by the supplier. You can spend your precious time and efforts of getting orders through your website and enjoy the profits of orders that are being processed by the supplier.
- Variety of products: There is a vast variety of products you can find for your drop-shipping business because there are a number of suppliers who are there to cater your requirements. You can simply sell a mix of different products or be specific with your niche.
Disadvantages of Drop-shipping
If there are boons there are banes too. Nothing is perfect and so is Drop-shipping. Drop-shipping seems a very enticing way to get into the e-commerce industry but it has its own cons too. Mentioned below are some of the disadvantages of drop-shipping:
- Keeping track of the inventory: It is comparatively easy to keep a note of your stock when you have it physically available but in drop-shipping you source items from different suppliers who supply to many other stores as well and hence it gets hard to keep track of items as inventory might change every day.
- Errors made by suppliers: Since you are the name that is in the forefront and all items are being sold by your name; even if a supplier messes up, it is you who has to take the responsibility. Hence it is very important to find the right supplier because if anything goes wrong from a supplier’s end, it will still be you who will have to pay for that.
- Customizations: A lot of customizations are not possible as is doesn’t give you a lot of control over it. Products are mostly designed and branded by suppliers that doesn’t leave a lot of room for changes. Some of the suppliers allow some customizations yet have the most control over the product.
- Shipping issues: One might think that selling a variety of products is profitable but it can get complex at times because this may involve a lot of suppliers. Involvement of different suppliers will involve different charges for shipping depending on the location, product types and more. In case if a customer purchases products that come from different suppliers, then retailer will have to pay shipping costs separately. Different shipping costs for different products might impact negatively on a customer.
- Competition: It’s not an easy and attractive business model for only one person but for everyone and hence, involves a lot of competition. There are many retailers catering to the same demands of the customers. If a retailer has chosen a specific niche, the competition might be less.
- Low profit: Since one doesn’t need to manage a store, shipping and other things, there are less overheads but low profit margins too.
Top Drop-shipping Companies in India
Baapstore is one of the first online drop-shipping websites in India. It offers a wide variety of products that one can drop-ship and get good margins. It partners with excellent logistics companies like FedEx, Ecom Express, Delhivery and more to make its deliveries efficient and fast. Some of the highlights of Baapstore are free inventory worth lacs at wholesale prices, one can set his own selling price, auto refilling of regular products, automatic addition of new products to the database, a large variety of products to choose from and one of the most important – White labeling.
Indiamart is one of the largest online B2B marketplace in India and a great platform allowing suppliers to connect to retailers. There are myriad of verified suppliers who offer great quality products as per the retailer’s requirements. It is a great platform for large enterprises as well as small ones and individual agents. The company has a network of about 42 lakh plus suppliers and 5.2 crore buyers. Indiamart is a one-stop platform for buyers and has numerous payment options that makes it a great choice for an easy process. It has a network of over 80 offices across India and over 3500 employees working for it. Though established in 2006, it has gained a lot of credibility and reputation in the industry.
Shopify is a renowned name in the drop-shipping industry and offers a platform to manage from virtual stocks to sales. The best feature of Shopify is that it provides a complete guide to the merchants that educates them how to sell products online. Merchants can also participate in online training programs to learn to successfully run an online drop-shipping business. Shopify extends its full support to people who want to get established in the drop-shipping business. It offers a vast variety of products that one can choose from to sell, instant deliveries, multiple payment methods that make the process convenient and other great benefits.
Bluember is among the best drop-shipping companies in India and is a renowned brand across the country. It has acquired a good place in the industry and has made it possible for retailers to connect to a large number of suppliers in the country and fulfill their needs. It is highly reputed and popular for its fully automated drop-shipping services. It has genuine and reliable suppliers to connect to for a successful business and its highly skilled team makes it possible to carry out all the processes swiftly. It also offers white labeling that means one can brand the products that are being sold by him.
ExportersIndia is a Business to Business (B2B) portal that connects a large number of suppliers and manufacturers to the resellers across the globe. It costs nothing to join the platform. It is a renowned name and gives full support to the resellers. It has a24*7 live showroom with a global exposure. It has a user friendly portal which is a remarkable feature attracting a lot of buyers. It also makes use of advance technologically driven measures and keeps itself updated with them.
Choosing the right one!
There are plethora of more drop-shippers available but to choose the most reliable and efficient one for a business is a vital task. There are a lot of factors that one should keep in mind before choosing the right platform. One can check for various aspects such as:
- Whether a drop-shipper has quality products and enough stock to fulfill one’s business needs.
- If 24*7 support and services are available or not in different languages.
- If a drop-shipper has the potential to handle urgent and critical issues.
- Can deliver the shipments fast and safely
There are various other factors too to consider and a tip for you is to do good research before getting started with drop-shipExportersIndia is a Business to Business (B2B) portal that connects a large number of suppliers and manufacturers to the resellers across the globe. It costs nothing to join the platform. It is a ping!