In the last few decades, online shopping has grabbed the full attention of everyone. It has become a part of our daily lives. From clothes to medicines, to groceries, there is hardly anything that cannot be brought from online. It is convenient, hassle-free and it saves time. Plus the pandemic accelerated the demand for shopping online; people find it safer especially during the period of lockdown.
Now when we purchase any goods they are delivered or shipped to the preferred place that we have mentioned while shopping online. There are different methods of shipping and E-commerce sites are adopting different models for their business. To deliver the products to their customers, a number of ways can be followed. In this article, we will talk about one of the methods which are known as Dropshipping. So, let’s take a look into it.
“Dropshipping is the entry point for a lot of people to business, E-commerce, and entrepreneurship. It’s the perfect first business.” –Lachlan Delchau-Jones
What is Dropshipping?
Dropshipping is a way of selling and delivering products to your customers without managing, and shipping the goods. Here you contact the supplier and let them deliver the product to your customer.
Basically, your website is like the intermediary, from where the customer chooses the product and then you forward the request to the supplier of the product who will ship it to the customer.
You don't have to manufacture, store or ship the product themselves, dropshipping is free from all these steps all you have to do is to find the perfect dropshipping supplier for the job. It is quite a good option for those who want to start an E-commerce startup. It is said to be one of the most profitable models in the E-commerce industry.
History of Dropshipping
The history of Dropshipping actually goes back to the days of the 60s and 70s, way before the internet was developed. During that time, when mails were delivered to the people, small booklets or catalogues were present along with them, with the help of that, one could place the order for their desired product from the catalogue through telephone and then the order was delivered to them at their doorstep.
Amazon and eBay then changed the way people used to sell products online. People who want to sell their products could just place them on the sites and let the E-commerce sites drive the traffic towards that product.
Currently, sites just need to find the supplier for the product who does the remaining job for them. Aliexpress and Shopify are some of the websites that made starting an E-commerce business easier as manufacturers and dropshippers are easy to find here.
How Dropshipping Works?
If you want to start an E-commerce site, dropshipping is one of the best options for you. Below are the steps on how it actually works.
- The first and foremost thing that one has to do is select the proper supplier.
- The second step is to connect the supplier’s app to your online website.
- Select the products that you want to sell to your customers.
- Set a price strategy for you dropshipping model of your business.
- Accept the orders from your customers.
- The orders of the customers then are forwarded to the supplier. And you have to pay them for that order.
- The suppliers then deliver the products to the doorstep of your customers.
Advantages of Dropshipping
Some of the advantages one get to enjoy if they chose to dropship are:
- E-commerce business that follows the dropshipping model doesn’t need a large amount of capital for their business. They don’t need to pre-purchase the products. So comparatively, it needs less capital.
- No need for a warehouse, where you have to store the products. The suppliers are the one who takes care of the product by storing them. Therefore, you can select whatever product you this is appropriate for your business.
- As the whole shipping process of the products is handled by your supplier, you can do your business from any part of the world.
- You can try to sell any kind of product on your website and if it is not bringing any profit, then you can quickly drop it from the list of your website.
Disadvantages of Dropshipping
Some of the disadvantages of the dropshipping model are:
- You don’t know what kind of quality your product will be. A bad quality product may cause uproar and can be bad for your business.
- You don’t have any control over the time the supplier takes while shipping the product to your customer.
- While serving the customer, difficulties may arise, if there is a problem in communication with your supplier.
- Dropshipping can be expensive as well, the market is quite competitive and if research is not done properly, then you might see other sites dropshipping the products at a much lesser cost.
Future of Dropshipping
In the past few years in the E-commerce business, there is an increase of business sites adapting to dropshipping model and in the future, it is only going to increase. Dropshipping can only be a profitable model for your business if you play all your cards properly and follow all the strategies carefully. For example, you have to be careful while selecting the dropshipping company for your business, proper research has to be done and then you can follow your plan.
E-commerce sites if planned accordingly and follow this model properly will turn into a high return business and will be a source of great profit.
For startups that are interested to try their hand at E-commerce, the dropshipping model is quite a good option for them. With more and more startups emerging, it is just a matter of time before people will realize the model's importance and need in their E-Commerce business.
Does Dropshipping have a Future?
Yes, dropshipping can easily turn into a profitable model for E-commerce sites as the model is a low-risk one.
How did dropshipping start?
Dropshipping started in the 60s and 70s when people used to receive catalogues by mails and could order items directly from the catalogue via phone, and have the company deliver them.
Who is the most successful dropshipper?
One of the most successful dropshipper is Irwin Dominguez. In just eight months, he made one million dollars worth of sales.