Don’t let your business sink. Make dropshipping your ally!
Posted by Andres Aguerrevere on
Have someone ever told you that you can’t start a business with little money? Think again. In the world of ecommerce many things are possible, for example, the dropshipping model allows you to sell products without really having any. How so? Well, when you receive an order from a costumer, you actually buy the product to a supplier which sends it directly to the costumer.
This is quite alien from the classic retail model in which you need to invest a strong amount of money in stock in order to see profit. In this case you buy from your supplier only after the costumer has completed the purchase on your site aka payed you.
But this method is more than just saving money.
Let’s check other pros
You don’t need a huge space: As you don’t need to keep any products in storage, the only thing you need to keep your business alive is a computer and an internet connection. Of course you can have an office but you may work from a coffee shop just as efficiently.
You can sell whatever you want: In a traditional retailing process you buy before you sell, meaning you are limited by the money you have, the products available, the space you have for storage, etc. But in dropshipping you can offer a lot more possibilities for your clients. After all, you will purchase just after they order.
Your business can grow faster: Keeping your business completely online, you don’t have to worry for the chaos of having many orders to pack and deliver (That’s your supplier job). So you only have to be sure to maintain a good quality in your customer service as your sells go up.
You have less to lose: Let’s imagine the worst, not even a soul visits your site in your first month meaning no profit. If you had traditional operations costs you would lose a lot of money but as you don´t pay rent or storages fees you lose close to nothing.
This means you’ll business can start in the blink of an eye if you want to.
It seems like a piece of cake, right? Well, I’m afraid I have to tell you about the downside.
Cons
Competition: As setting up this type of business is quite simple, not only you will do it (sorry). The competition is quite fierce and the bigger the competition, the lower the prices. It’s better if you look out for the competitors of your niche before starting the business.
Stock: You don´t need to storage. Great! But this also means you have no control over the stock. Your supplier works for many people besides you, which makes the inventory hard to manage.
Product issues: I know I know it’s not your fault if the product is misplaced, doesn’t arrive in time or, if you are really unlucky, is damaged. But you can be sure the costumer will blame you for it, and even if they don’t ask for a refund you will lose a client!
Delivery time: Depending of the warehouse you choose, the product can take over a month to get home. And you and I know people don’t like to wait.
Now, I’m sure this little perks won’t discourage you. So I’ll give you some advices
Tips
Be selective: There are many suppliers in the market; you only have to see the main page of AliExpress to notice it. That’s why it’s essential that you choose established companies with high standards of quality.
After all you don’t want thousands of complains in your mailbox, do you? In the quest for excellent service the best you can do is to work with wholesalers and learn to distinguish them from simple retail sellers.
Focus on good service: You have to keep an eye on what you can actually control: your site. Offer a spotless costumer service, be dynamic and make sure your webpage is attractive and easy to use.
Be specific: Would you buy a car from a place that also sells fried chicken? I don’t think so. Don’t be afraid of specializing, that would make you stand out. Include everything a reader may want to know before buying something on internet.
Marketing: Let’s not forget about our main interest: to sell. For this you have to make sure costumers know you exist and are better that the others. Dedicate time to little things that can make a huge difference, product SEO friendly descriptions included.
Use tools: Automatization can be your best friend if you let it. Using tools like Oberlo, Shopify, Inventory Source, Hublogix, Dropship Commerce, Spark Shipping and Etail Solutions, it´s a good way to go.
This dropshipping thing is bigger than you thought, right? Don’t worry, now that you know what the fuzz is all about you can decide whether to use it on your business or not. But remember business is always changing.
