With a market value of $162.44 BILLION dollars in 2019, it’s a concept that has flooded the ecommerce space within the last few years and if you haven’t heard about it yet, you’re going to today. Let’s go!
If you’re in the digital space in any capacity, you’ve likely heard of drop shipping.
With a market value of $162.44 BILLION dollars in 2019, it’s a concept that has flooded the ecommerce space within the last few years and if you haven’t heard about it yet, you’re going to today. Let’s go!
Jump to:
Drop shipping is a controversial business model that has intrigued many people enough to become entrepreneurs and start their online business.
Why? Because it’s easy!
Dropshipping is the fulfillment model of nearly 33% of online stores!
The main difference between a traditional ecommerce store and drop shipping is that you don’t need to worry about manufacturing or stocking the items you are displayed on your website. When the customer buys a product from a drop shipping shop, the item is actually being shipped from a third party (the supplier).
When it comes to building an online store for your drop shipping business, one of the most known and used e-commerce platforms is Shopify. You can also start drop shipping on Amazon.
Choosing your suppliers is an essential step of your drop shipping business, as they are the ones that will be sending the orders to your customers. In this way you don’t always have direct control of what the customer gets, so you want to make sure you’re choosing a reputable supplier (skip to the supplier section here).
Drop shipping saves a huge amount of time and money for entrepreneurs. This guide will help you understand crucial pieces of the drop shipping puzzle along with how drop shipping works.
As mentioned before, this business model allows the seller to not stock or handle the products to be sold.
Drop shipping will also cut the risk of ordering too much stock without the guarantee that they will be sold. The inventory cost matters at any point, especially if you are a small business just getting started.
Before getting into business, many people fear the implications of it. However, if you are thinking of creating a retail business, drop shipping can be a great method to start with. Here are the main 5 reasons why drop shipping is advantageous:
Other things to consider would be:
Drop shipping allows you to be creative with your business. You can test your ideas, without the need of buying a large amount of stock. This can be a very useful thing, especially at the beginning.
Feel free to test the market, and see what suits your customers best!
You can run this kind of business from anywhere in the world. Just make sure your internet connection is good so you can keep communication with your suppliers and customers! 🙂
While to some extent drop shipping can be an incredible model for new businesses, there is definitely an other side of the coin making an impact. Here is what you need to consider before starting a drop shipping business:
This is one of the most asked questions when it comes to drop shipping. And the answer is yes, it is legal! Most of the countries do not require a Business License for this.
However, it is always recommended to consult a lawyer that can make sure you are in perfect legitimacy with your business and your suppliers.
You should pay a lot of attention at the agreement you make with your suppliers, so that you would not find yourself in the position where you may be legally responsible for their actions.
Simply start with choosing a plan and setting up an account. If you visit shopify.com you can also get a 14 days to try it for free.
You will need to fill in details about your business, along with choosing a name for your shopify store and you are ready to go.
After that, go ahead and research the available suppliers and simply add products into your store.
This depends on the type of business you run and the products you are looking for. However, some of the most popular (and reputable) drop shipping suppliers would be:
Make sure you do your due diligence when looking for a supplier, as 84% of ecommerce retailers cite the initial stages of finding and securing a good supplier to be the biggest obstacle to getting their business going.
As in any other industry, there are ups and downs, but overall, drop shipping can still be a profitable business model in 2021. Just do it the right way and consider these main aspects:
Building a correct, valuable business for the customers will always bring profit! Drop shipping remains a viable way of creating a successful online business. The key is always in how much attention, time and effort you invest in your business!