Dropshipping is a profitable business model for prospective entrepreneurs as long as you have a unique strategy in place. Since it allows you to sell to your customers without stocking any inventory, all you need to do is focus your efforts on branding and marketing your eCommerce store.
Like any other entrepreneurship venture, it takes a lot of work to build a dropshipping brand, but if you are serious about it, you can establish a sustainable income source in the long run. But first things first, what is dropshipping?
How does dropshipping work?
Dropshipping is simply a business type that allows you, as an eCommerce store owner, to sell directly to your customers without stocking any inventory. You only have to partner with a dropshipping supplier with the products you are selling. The dropshipping supplier takes care of the packaging and shipping and is responsible for the product quality.
So, you set your retail prices, which the customers pay, and you pay your dropshipping supplier at wholesale price and pocket the profits. That way, you will never need to manage inventory or employ staff to facilitate the shipping of the products.
How do you dropship?
For you to dropship, you have to register an account with a reputable dropshipping supplier such as vidaXL. There are two ways to find a dropshipping supplier. One is through a supplier database, or you have the option of using an integrated supplier directory in your store’s backend.
That means you can source hundreds of products from the marketplace, and your dropshipping supplier fulfills the order by shipping the items directly to the customers regardless of where they are.
You have to create your brand.
In the dropshipping business model, you create your brand through an eCommerce website or store. It is also upon you to choose the products you intend to sell and market them. You list the products on your website, market them, look for traffic and sell to customers. The fact that you have to create your own brand is where the work comes in as a drop shipper.
You need to establish strategic marketing techniques and other promotions to put your brand before your customers. If you’re good at branding and marketing, you may find it easier because that is the only thing you focus on. However, you are accountable for the shipping expenses, so you must establish prices with a reasonable profit margin.
Is it hard to start dropshipping?
The dropshipping industry is highly competitive, which is why you must have a strategy in place to push your brand. It is an easy business model to venture into because you need lower capital, making it competitive. Keep in mind that you may encounter multiple companies selling the same products at similar prices, so you need a way to stay competitive.
The bottom line
Dropshipping is a profitable business model because you do not handle manufacturing and shipping. The best thing is that it is a low-risk business venture because you don’t suffer the risks of overstocking, and with the right supplier, you can earn reasonable profit margins.