Dropshipping is a method by which you, as a retailer, sell products to the public, without actually holding on to any stock or product. When you sell a product in your dropshipping india business, you send the order directly to your chosen supplier. They ship the product and process the payment. Then the dropshipping supplier sends you the difference between the money they make for the product and the price you charge.
Dropshipping has a number of pros and cons to it. You need to understand these before you attempt to get involved in the business. Understanding the following pros and cons will help you to ensure you are making the best choice for you and your business and will also make sure you aren’t surprised by any of the things you encounter as you set up and begin running your business.
Pros – Less Capital
This is, without a doubt, the single biggest advantage to dropshipping. Anyone can launch their own e-commerce store, without the need to have vast amounts of capital to invest thousands of dollars upfront in stock. Traditional retailing requires a person to have money tied up in inventory. Dropshipping eliminates that hurdle.
You can start with amazon dropshipping india, shopify dropshipping india, or apparel dropshippers in india, quite easily. The most popular channel is dropshipping from India to USA.
Pros – Easy to Get Going
Running your own e-commerce business has never been easier, especially as you no longer need to handle physical products. When you choose dropshipping, you no longer need to consider: Renting or managing warehouse space, packing orders and shipping them, Tracking your inventory for accounting.
Cons – Lower Margins
This is the biggest disadvantage to dropshipping, especially when you are working in a niche that is very competitive. Because it is so easy to get going with dropshipping and because the costs are low, more and more people are setting up shop and selling at the lowest possible prices to try to bring in the money. These people invest little in starting up their business so they can afford to work on the tiniest of margins.
Cons – Issues with Inventory
When you run a business where you keep your own stock, it is fairly easy to track which items are in stock, low, or out of stock. Yet, when you choose to drop ship you are relying on other suppliers and these suppliers are not just supplying your customers – they work for other merchants as well. Thus, their inventory levels change daily.
Cons – Issues with Shipping
Most of the drop-shippers work with several different suppliers. This means that the products you sell are sourced through several drop-shippers. This model can cause issues with your shipping costs.
For example, if a customer has ordered three different products from you. All of these come from different suppliers which means you incur three sets of shipping charges, one for each item. You cannot pass those costs on to your customers, as they will assume that you are overcharging for shipping.
The best way to do it is average out the shipping cost across suppliers – some you will make a bit of money on, others you will have to pay on.
Setting up your business
The process of setting up your online store doesn’t need to be a complicated one. In fact, if you know the steps to follow, and are aware of some do’s and don’ts, you can do it in a relatively short period of time without becoming overwhelmed or confused.
1. Selecting Your Product. Before you can even begin setting up your store, you need to know what product you are going to sell in your store.
2. Look for Product Ideas. Without a product to sell, there is no reason to open a business. Before you begin searching for new ideas on what you should sell, start with what you already have, or how can you solve your own problems or the problems of the people you know.
3. Understanding Your Market. Perhaps the most important thing to consider is your target audience, to whom you will sell your product. You aren’t going to be able to run a successful business if you are selling wedding supplies and dog toys together on the same site. The same is true if you are selling cheap t-shirts next to designer clothes.
4. Choose Specific Demographics.
Age – This can be the age of the purchaser, and the age of the user, if both are different.
Gender – This can be the gender of the purchaser and user.
5. Consider the Psychographics:
Choose the right dropshipping suppliers in india.
The supplier you work with is one of the biggest decisions you are going to have to make when you start up your online store. The supplier you partner with has a large impact on the success of your business, and you want to make sure you choose the right one.
Know Your Industry. Different industries have different supply chains. If you are running a small boutique with a specific, specialized item, you are going to be more successful if you partner with a manufacturer or a small local supplier. If you are going to run a larger store with many products, you are going to be looking for a supplier with a larger selection of products they are selling.
Try Manufacturers First. If you can figure out who manufactures the items you want to sell, you will be able to contact them directly to find out if they can drop ship their items. While you can email them, calling yields faster results and allows you to get information quicker as well as to create a contact within the company.
As you contact different vendors, they are going to fall into three categories:
1. They Dropship – this is the best partnership for you. Ask about what they require from their partners, as well as if they have any minimum order requirements.
2. They Don’t Dropship – Ask about what distributors they supply their products to, this will point you in the right direction to be able to get those products.
3. They Don’t Offer Their Products for Resale – Not a good partnership for you. At least you know where you stand. You are going to be able to try someone else.
Dropshipping business can be easy to start. But it is not a “Get Rich Quick” scheme. To be successful you have to approach it like you would any business opportunity – with professionalism.
Often, if you have one main goal, it can be helpful to split it into a series of smaller ones, goals that you can achieve on a weekly or monthly basis.
You can learn a lot from your competitor by looking at the sites they are active on, where they get the most result from, and what tactics they use in terms of marketing. Study your competition hard, whether it is amazon dropshipping india or shopify dropshipping india. Learn what they do right and what they do wrong – this will tell you how you can offer more or something different to what they do, something that gives your customers value.
If a person believes that they are getting more value from you, they will make their purchase from you, and in this way, you can actually poach customers quite easily.
Sridhar V is a passionate digital marketer and Freelancer. He helps business owners to get more sales through his online marketing strategies. He is also one of the alumnus of AADME.