Have you heard of dropshipping? It’s one of the major e-commerce trends of the last few years. Read on to learn more and find out how you can start up your own business…
What is dropshipping?
Drop shipping is when an e-commerce site sells products directly from a wholesaler who then ships straight to the customer. This means that the online store is simply a distributor and sells products but doesn’t manufacture them and doesn’t own any physical stock.
In reality, this is how dropshipping works:
1) The customer buys a product from an online store.
2) The website orders the product from the supplier.
3) The supplier sends the product directly to the customer but only the name of the brand appears on the packaging and receipt.
As you will have understood, the e-commerce is never in possession of the product being sold. On the other hand, the customer does not know that his purchase actually comes from a supplier and not from the site he ordered from.
Drop shipping is, of course, legal.
What are the benefits?
There are many benefits when it comes to dropshipping. The first significant advantage is that allows anyone wishing to start an e-commerce business to do so with few resources and no stock. This means you can start your business without taking out a bank loan.
Dropshipping sites usually buy products at low prices which can quickly lead to high margins!
What are the drawbacks?
Dropshipping also has its share of inconveniences such as customs fees and VAT. Many wholesalers are located in Asia so make sure you find out about possible costs before you start.
Another major disadvantage is that if there is a problem with the order, from a legal point of view, it’s the seller who is held responsible and not the wholesaler. So make sure that your supplier’s trustworthy and check the following points:
- the product on sale matches the photographs,
- the product is actually sent to the customer,
How to start a dropshipping business
So, you want to become a dropshipper? Once you’ve found the perfect product to sell, you can start searching for a supplier. Make sure they are reliable by ordering the product yourself and checking the quality and delivery delays. Once your supplier is secured, you must then open your online shop. You can also sell your products on marketplaces without creating a website. Remember to include delivery times so that your customers don’t get impatient! To do so, you can use Boxia’s tracking tool!