Throughout the years, Google Trends Data has revealed the search interest in the dropshipping increase from 58 to 91.
From electronics to clothing, people are now shopping for everything online. The days are gone when you are accustomed to going to the store and buy the things you need.
With every passing, the fame of e-Commerce is much getting higher. In fact, retail e-commerce sales across the world amounted to $2.3 trillion and estimated to grow to $4.88 trillion in 2021 according to the online statistics platform Statista.
What is Dropshipping?
Dropshipping is a business model where the seller does not keep any inventory of products nor process the orders. Instead, it contacts the manufacturer, a wholesaler or a retailer and transfers the customer orders as well as the shipment information to get the order delivered straight to the buyer.
For instance, there’s a seller who is selling shoes online (SL). Also, a buyer orders shoes (BY).
Therefore, when SL places an order, BY collets the order information along with the delivery address and presents it to the retailer or manufacturer (MF). Then MF ships the item to BY.
How does SL make an income?
You see, SL highlights shoes on its website, it raises the cost, and when someone places an order, SL keeps the commission and pays MF the actual amount of the shoes.
Some of the huge names like Zappos and Amazon have stepped into the dropshipping. That makes the business model way more famous. Moreover, it’s predicted that dropshipping is going to change the e-commerce industry – it might be the future of e-commerce.
You can check Oberlo ebook answering “What is dropshipping?” to know more about this subject.
Below are some of the reasons that make dropshipping the real deal.
Wayfair.com is considered as one of the massive dropshipping online retailers today. You see, that brings over 8 million products from ten thousand suppliers. That substantial scalability is made possible through this business model.
The retail only needs to concentrate on customer services and marketing sides. Therefore, they don’t need to think about the plummeting warehouse rental as well as overhead expenses.
Packaging & Shipping
Running e-commerce sounds fancy, but in real life, it’s a difficult process.
Dealing with orders, packaging and shipping are hectic. Although you can outsource services, it needs a substantial amount of investment.
However, in dropshipping, one does not need to handle shipping and packaging. When you get an order on your store, you only pass it to the wholesaler or manufacturer.
Cutting Down Catalogue and Photography Cost
Let’s be honest, when shopping online, a lot of people check the images or the catalogs of the items. If you’re running a conventional e-Commerce business, you need to employ photographers for taking high-quality images of the product.
Nonetheless, dropshipping fixes that concern as well.
If you employ a platform such as Oberlo, you can import images of items from places such as AliExpress to your store. That will not just cut down your cost, but it will also save a lot of time.
This is the major reason that makes dropshipping a famous and well-known e-commerce business model.
Starting up an e-commerce business isn’t a simple task. You need to purchase all the items that you would sell and purchase them in big amounts.
For you to keep them, you need to have an inventory, which needs its massive investments.
Nevertheless, the case is totally different in dropshipping.
Along with a platform such as Shopify, you can have a storefront. It’s simple to import items from suppliers into Shopify, at the same time store and ship them straight to the customers.
What’s more, you can utilize AliExpress to get in touch with your manufacturer or retailer. Compared to a conventional e-Commerce business model, dropshipping is much better.
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The majority of e-commerce founders do not expect to spend their time choosing, packing and shipping orders. Yes, they can outsource their order fulfillment to a boutique e-commerce fulfillment or to Amazon FBA.
But, the dropshipping model enables a hands-free fulfillment as the entire process of shipping and packing lies in the hands of the manufacturer or wholesaler.
To sum up, e-commerce is undoubtedly transforming. It will surely continue to get much better in the next years, and dropshipping will be a massive part of it.
Conventional e-commerce business has now marked their territories in various verticals, and some countries are massively successful. But, you will find companies which failed too.
We can’t deny the reality that there are some risks in establishing an e-commerce business.
When we talk about the role of dropshipping, it removes a massive amount of risks and challenges to a high level. For those newborn startups and companies, it could be a wonderful option to kickstart.