What is Dropshipping? Platforms & Challenges

Dropshipping is a business model in which a retailer doesn’t hold inventory of the goods it sells. Instead, when a store uses the drop shipping business model to sell a product, it buys the items from a party called a third party and has it shipped to the buyer. The merchant never handles or sees the product as a result. Drop shipping benefits in a way that it eliminates a retailer to maintain inventory, lowering the initial outlay and risk involved with conventional retail methods.

How Dropshipping Goes?

• Setting Up a Store:  The drop shipper creates an online store to exhibit and sell their products. This can be accomplished via platforms such as Shopify, Etsy, Amazon, WooCommerce, or other e-commerce platforms.
• Supplier Selection:  The drop shipper forms alliances with suppliers or wholesalers prepared to fulfill orders on their behalf. These vendors oversee inventory and shipment.
• Product Listings:  The drop shipper adds the supplier’s products, including product descriptions, photos, and prices, to their online store. These listings serve as a catalog of products for sale.
• Customer Orders:  The drop shipper receives payment for the product when a customer places an order on the drop shipper’s website and completes a transaction.
• Order Forwarding:  The drop shipper then makes an order with the supplier for the same product and gives the shipping information to the buyer. Supplier fulfillment entails the supplier selecting, packing, and shipping the product directly to the client. Depending on the arrangement with the supplier, the drop shipper may or may not include their logo on the packaging.
• The Product is Delivered to the Customer:  The customer receives the product directly from the supplier, often unaware that it did not come from the drop shipper’s inventory.

What are the Dropshipping Platforms?

Drop shipping is supported by various e-commerce platforms, which offer tools and functionality to help you set up and run your drop shipping operation. Some of the most popular drop shipping platforms are:

Shopify

Shopify is a well-known and commonly utilized e-commerce platform. It has an easy-to-use interface, a variety of customizable templates, and a variety of apps that can be combined to help with drop shipping operations.

WooCommerce

WooCommerce is a WordPress plugin that converts your website into an online store. It provides drop shipping firms with flexibility and customization choices, and you can choose from a variety of addons to increase its usefulness.

Wix

Wix features an e-commerce plugin that allows for drop shipping. It is well-known for its simple drag-and-drop website builder and might be an excellent choice for beginners.

Dropship Me

DropshipMe is a WordPress plugin that focuses on AliExpress drop shipping. It provides a selected list of high-quality products and product descriptions to help you get started with drop shipping.

Oberlo (powered by Shopify)

Oberlo is a platform created exclusively for Shopify users. It enables you to simply import products from AliExpress and seamlessly fulfill orders.

Amazon

Amazon is not often thought of as a standard drop shipping platform in the same way that Shopify or WooCommerce are. Amazon is a vast online marketplace where businesses may list and sell their products to consumers directly. However, Amazon operates in a manner that differs from the traditional drop shipping model.

ETSY

Drop shipping is possible on Etsy, but understanding Etsy’s policies and guidelines is essential before engaging in drop shipping activities on the platform. Etsy’s main goal is to promote handmade, vintage, and one-of-a-kind things, as well as to cultivate a sense of personal connection between shoppers and sellers. Before selecting to dropship on Etsy, carefully read Etsy’s Seller Policy and Drop shipping Policy to ensure that you are following their requirements. Remember that Etsy’s primary goal is to provide a unique and creative buying experience, so any drop shipping you do should reflect those principles. Failure to follow Etsy’s policies may result in fines or account suspension.

What are the Benefits of Dropshipping?

• Drop shipping offers a low-cost start-up with no need for warehouses, inventory, or shipping management, making it a hands-off retail model.
• Drop shipping allows for seamless scaling without significant changes to the business model; increased focus on sales, marketing, and customer experience is key as the infrastructure costs remain manageable and more resources can be allocated to promotion.
• With drop shipping, run a laptop-based business, low investment, focus on advertising, minimal costs as business grows.
• Drop shipping offers flexibility with the freedom to list products, adapt strategies, and automate processes, allowing for customization and potential passive income generation.
• Drop shipping streamlines business operations without staffing or warehouse commitments, allowing focus on online store management.

What kind of Challenges you will face in Dropshipping?

• Many of the characteristics that make drop shipping a profitable business model also have disadvantages. Take these into account before committing to a drop shipping setup.
• There is a lot of competition. Because of the lower obstacles to entry, competition in the drop shipping industry is fierce. Hundreds of companies may be selling the same thing as you. Because a product cannot be a distinctive factor, you must focus on factors like customer experience to stand apart.
• Inventory and shipment are less under your control. You have little control over product availability or quality because the supplier is responsible for managing stock and distributing things.
• Low profit margins. Because of the high level of competition in the industry, drop shipping businesses have minimal profit margins.
• Customization options are limited. Because you are not in charge of shipping things to clients, you are unable to modify products or give value-added services to improve the customer experience.
• Customer service is difficult to work with. As previously stated, everything is fine when the consumer is pleased with the merchandise acquired. When customers need to return or exchange the product, however, it becomes difficult to coordinate the return with the provider in a way that makes the consumer happy.