When running your own business for the first time, dropshipping might be the best option to consider. It allows selling products to customers without paying for them in advance. As a business owner, you can set the price of your goods yourself and make efforts to promote your own brand. In this way, you can build a sustainable source of income that works in the long run. When e-commerce grows at an unprecedented rate, it appears to be an excellent solution. We are going to explain what dropshipping is and what actions should be taken to successfully start this innovative business model.
What is dropshipping?
Dropshipping is a business model that allows you to run an online store without the need to stock up on goods. After each sale, it is the manufacturer or wholesaler who delivers the products from their inventory directly to the customer. You don’t have to worry about storing, packing or delivering your goods. The main activity to focus on is advertising, directed towards providing the highest amount of orders.
How does a drop-shipping business model work?
Three main players involved in dropshipping consist of customers, sellers and manufacturers. The role of the manufacturer or wholesaler in this business model includes the manufacturing of goods, stockpiling, shipping products to customers on behalf of the seller, as well as replacing defective units. The seller, on the other hand, makes the manufacturer’s goods available on their website and under their own brand, with prices including an imposed margin. The seller becomes responsible for the right selection of the offer, effective marketing, determining retail prices and making shipping arrangements with the manufacturer. The customer buys products directly from the seller.
What are the most important advantages of the dropshipping business?
Dropshipping is becoming more and more popular. Undoubtedly, this business model brings many advantages to the table. The most important of them include:
- low startup cost – you don’t have to make investments to produce your own goods or buy them in bulk. Ability to start selling almost immediately, without large investments, can’t be omitted. It just seems like a perfect scenario for people who are about to start their business adventure,
- better cash flow – since the product is not being held in stock, you don’t pay for it until the purchase from a customer is completed,
- endless supplies – if a well-planned supply chain is provided, you gain access to a virtually unlimited number of manufacturers or wholesalers around the world. There is more time for profit optimization. Dropshipping takes the production of goods off the entrepreneur’s shoulders, leaving them focused entirely on sales strategy, marketing, image building and high-quality customer service,
- flexible working schedule and offer arrangement – dropshipping is highly automated. If one product doesn’t seem to sell well, you can immediately withdraw it from the offer, adapting the product line to customers’ needs. The flexibility of dropshipping also means that management could be carried out from any part of the world. Remote job is now withing your reach, giving to the business owner its full potential. Working from anywhere in the world might be a great option, giving the sense of freedom and fulfillment.
Cooperation in the field of dropshipping – how to start?
Once we know the ins and outs of dropshipping business model, the rising question becomes: how to start? Finding the right niche in the market would be the first recommended step to launching an e-commerce store. Marketing a wide range of products might be a true nightmare for start-ups, so at first, any dropshipping business should be focused on the entrepreneur’s individual interests and knowledge. The goods should go beyond being solely attractive to potential customers. Low shipping cost is also a must. If you are able to offer free delivery, treating it as a cost intertwined with the development of your business, you are already in a good position to start. After finding a suitable niche, it is worth doing some research on our market rivals. We must not forget that in dropshipping we will compete with other entrepreneurs who operate on the same model, as well as retail giants, ready to devour upcoming daredevils. Many new sellers make the mistake of judgement when deciding to focus on a product that has no market competition. In the contemporary world it usually means quite the opposite of what they might think at first glance. Instead of being an attractive niche, it is rather a sign of no demand for this particular product on the market.
The next step relates to the selection of a manufacturer or wholesaler. Working with irresponsible suppliers can ruin even the best business. Business partners should be carefully scrutinized for their reliability. The manufacturer has to guarantee more than just the appropriate quality of goods. Clear communication, straightforward rules of cooperation and fast shipping are of paramount importance and should not be underestimated. On the last page of preparing a dropshipping business we encounter such activities as: building a store’s website, planning a marketing strategy and launching sales. When this point has been reached, we might consider the first stage of business model optimization completed. However, this task practically never ends, providing new challenges on a daily basis.
How to find reliable suppliers for dropshipping cooperation?
The answer brings no surprises- Internet seems the quickest and broadest tool. The network combines various producers and wholesalers who ship their products on behalf of sellers, together with feedback on the quality of their services. Our women’s clothing warehouse at Numoco offers dropshipping cooperation that is appreciated by many partners. To start operating in this business model, you need to register your company on the store’s website. After obtaining positive verification, you get access to the inventory and prices of goods on our website. You also gain many other benefits, including: up-to-date inventory, entrustment agreement of personal data processing, quick activation of the account, no additional fees and no minimum order value.