Lately, there has been a lot of talk about dropshipping, the latest news in the world of online shopping.
What is it, and why should it be used? Here is the basic information to know!
Story of a seller without merchandise
Dropshipping, in simple terms, is a sales model in which the seller does not physically own the goods sold. Yes, you got it right! So how does this system work?
When the buyer places the order online, the seller activates immediately, contacting the supplier (drop shipper) to ship the item directly to the end-user. In short, the seller will never see the goods but merely act as an intermediary between the manufacturer and the buyer.
But what are the advantages?
So where are the advantages of this system? Well, dropshipping brings benefits for everyone, from the customer to the seller, to the manufacturer.
Let’s start with the drop shipper: what does the supplier gain from using this system?
By taking advantage of the seller’s contacts, the drop shipper can quickly expand its sales network and can do so effortlessly, as it leaves the onus to the seller to look for new customers and advertise the items. The dropshipping system also allows you to spread your products with greater capillarity than normal online sales channels and traditional markets. A dropshipping site has greater visibility than corporate eCommerce.
In essence, the drop shipper simply has to worry about shipping products quickly and accurately: others will take care of marketing and looking for new customers! A nice time-saver, no?
The advantages for those who sell make the difference
The main advantage for the seller is one: being able to start an eCommerce business without the need to stock up on goods. A nice saving, if you count that in addition to the cost of the goods there would be to add the expenses for the warehouses and for the employees who manage them.
The tasks of packaging and shipping, then, are left to the supplier, further reducing the commitments of those who sell, who can devote more energy to marketing and promotion activities.
In short, dropshipping is a great resource for small entrepreneurs, who can start and run a business without too much investment.
And who buys for?
For those who produce and those who sell the advantages, as we have said, are undeniable. But for buyers? Reading what is written above, one would think that it is worth turning directly to the manufacturer.
Yes and no: we explain why. Contacting manufacturers, sometimes, may not be so simple. Suppliers, then, often sell goods in large quantities: why should you be forced to buy 20 packs of candy, when two would be enough for you? Through the particular agreements that the seller has with the drop shipper, you can buy the goods you prefer in the desired quantities, without having to respect the limits imposed by many manufacturers.
On a dropshipping site, then, you can compare many different products and prices, and find what suits you. Turning to individual manufacturers, however, you should consult dozens of different sites, without really understanding which product is better than another.
And are there risks?
Sometimes, however, we read that dropshipping involves some risk. Is this the case? And just in case, what is it?
The sensible buyer does not take risks
For buyers, the greatest risks would relate to the difficulties in using the warranty and contacting suppliers in case of problems or returns. Still, some argue that shipping times may be longer than usual. While it is true that these problems can arise, it is also true that an attentive buyer can avoid them. By choosing reliable and recognized dropshipping sites, the risks are greatly reduced: a good sales site relies only on serious and reliable suppliers and makes quality checks both on shipments and on the quality of the goods.
No system of online purchases is risk-free, but by carefully choosing the platform, they are reduced to a minimum.
Mistakes to avoid when selling
Some more risk, rather, runs those who sell: especially at the beginning, the low percentages of earnings could be a problem in the medium term. To ensure the sustainability of the business, the margin should never be less than 25/30%, but it is not always possible to reach such numbers, especially on technological products.
Another real risk is that of the exhaustion of the products, that is, selling something that the supplier is temporarily lacking. To avoid inconveniences of this type (which involve the buyer’s refund or delays in shipping) it is always good to make sure of the actual availability of the proposed products.
In short, when the seller is serious, he will be able to overcome obstacles and guarantee those who buy a quality service. The important thing, as in all sectors, is not to be caught unprepared!
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