What is a drop shipping order
What is dropshipping and how do you get started?
Dropshipping continues to be a major issue in e-commerce circles. But what exactly does the term actually mean, how can you get started and which dropshipping providers are there?
In this article we clarify these questions so that you can decide whether you should use this distribution opportunity for your online shop (and how best to start with it).
Tip: Not much time right now? Then download the article now as a PDF so that you always have it at hand.
What is dropshipping?
Let's start with the definition ...
is a type of online trading in which online retailers offer products in their shop without even having them in stock.
And how does it work then?
If a customer orders such a product in the shop, the shop operator does not send the product himself, but orders the product (usually automatically) directly from the manufacturer or wholesaler, who then sends it directly to the customer.
The dropshipper therefore (mostly) has no physical contact with the product.
Therefore, this e-commerce strategy is in direct contrast to classic retail, where the goods are ordered in large numbers, stored and then sent to the customers.
Sounds like a perfect product strategy at first, but ...
Should you use dropshipping in your online shop?
After you know what this sales method is all about and how it differs from traditional retail, you may be asking yourself whether you should use it for your online shop.
As with any other business model, there are advantages and disadvantages.
Good to know!
How to create product descriptions that increase sales. Download our free whitepaper now and get 7 tips on product descriptions.
The benefits of dropshipping
Dropshipping has a number of advantages, especially for entrepreneurs who are just starting out with e-commerce. One of the biggest pluses is clearly the factor of the low starting capital that is needed to get started.
As already mentioned, with this business model there is no need to buy and store products in advance.
In total there are three parties involved in this sales model:
End customers buy a product in an online or offline shop and do not know whether the delivery will be made dropshipped will or not.
At no time do they know who the wholesaler is, as they only have contact with middlemen.
The selleror the saleswoman manages the shop and tries to attract as many potential customers as possible.
When an order arrives, the dropshipping wholesaler will be contacted and the details of the order and those of the customer will be sent.
The profit on this transaction is the difference between the amount charged by the wholesaler for the product and the amount charged to customers.
The dropshipping providerwho takes the order, packs it and sends it directly to the end customer.
There is (mostly) no reference to the wholesale trade on the packaging, only the branding of the shop - if at all.
The wholesaler takes care of all formalities related to shipping, customs and distribution costs.
Short: As soon as the end customer has ordered and paid for the product in the online shop, they buy So dropshippersthe product at the manufacturer or wholesaler and specifies the end customer as the recipient.
The great advantage here is that the product does not first go through the hands of the shop owner, as does the goods not bought and stored in bulk must become.
Likewise must beDropshipperno worries about excess products that simply cannot be sold and then collect dust in the warehouse.
Because of the (apparently) low initial cost the dropship model is a practical way to test new products or to test the e-commerce water first before jumping in completely.
Another advantage offered by the dropshipping solution is that a much larger range of products can be offered, as goods do not first have to be stored at great expense.
Likewise, dispensing with a warehouse allows you to manage the dropship shop from anywhere in the world - all you need is an internet connection.
But even if this business model offers some excellent advantages, there are of course disadvantages that must be considered ...
The disadvantages of dropshipping
This is by far one of the biggest drawbacks to this ecommerce model:
You can have little influence on customer satisfaction!
It is irrelevant how good and user-friendly the online shop is, if the wholesaler does not send the package on time, the shipping takes too long, the product is damaged or, in the worst case, the shipment does not even arrive, you can spoon up the soup. Alone.
Problem solving is also much more difficult if you do not know where the delivery is stuck and the wholesaler cannot be reached.
Often the easiest option is to get the money back and accept that setback.
Free e-book: reduce returns and sell more. That's how it's done!
The thing about e-commerce: there are always problems, one way or another.
Therefore, you shouldn't be put off by any problems with your clientele if you are in
Wanting to be successful in e-commerce.
Because you cannot avoid complications with shipping or with your customers, even with the classic e-commerce model, where the goods are kept in the warehouse.
So the shipping factor is - to a large extent- not in your hand, unfortunately there is another disadvantage associated with it.
If you offer goods from different manufacturers and wholesalers, the shipping costs can quickly add up if a customer orders several products.
Now you could of course charge your customers for the increased shipping costs (and thus lose them with a high probability) or bite the bullet and take on the increased shipping costs.
This brings us to the next disadvantage, perhaps the greatest: The problem with the low profit margin.
In Kylie Jenner's cosmetics shop For example, you can find a make-up set for $ 360.00 the purchase price at Alibaba is around $ 15.
Of course you can also try to sell products with a gigantic price premium and thus make a high profit.
However, this only works in very rare cases, as the least Dropshipper Have over 1 million followers on Instagram.
There will often be enough competition that sells the same product at a significantly lower price and thus wins over potential customers.
In order not to get into a price war, you have no choice but to claim a little competitive market for yourself or invest time and money in marketing and branding in order to build a brand with loyal customers.
So, you need to stand out from the competition if you have one.
One way of doing this is storytelling or improving the ranking of your website.
In which areas can dropshipping be used?
This sales method is possible for almost all types of businesses. Here are some ideas:
In an online shopThis sales method is used the most, as it is a very good option for e-commerce companies, where the necessary processes are greatly simplified.
In addition, by synchronizing the online shop with the dropshipping provider, manual work is reduced to a minimum.
In an online shopThis sales method is used the most, as it is a very good option for e-commerce companies, where the necessary processes are greatly simplified.
In addition, the automatic synchronization of the online shop with the dropshipping provider reduces manual work to a minimum.
At e-marketplaces (like Amazon or Ebay) this strategy is also used by a large number of online retailers.
The online marketplaces have the advantage of an enormous customer frequency, which ensures that the products can be seen by a large number of buyers.
But it also has the disadvantage of being on strange terrain plays. In your own
You can set your own rules for e-commerce, but in an e-marketplace you have to stick to what is given.
For example, if you sell on Amazon, you are likely to be prohibited from selling certain products depending on the product category or country in which you intend to sell them.
Tip: Of course, it should be borne in mind that theMarketplaces cannot be used free of charge. For the sale you have to pay a commission or even an additional monthly fee.
Offline in stationary retail: There are more and more traditional stores selling their products dropshipping.
Instead of having all products in stock, there are exhibition or catalog items that are then ordered and sent by the dropship provider.
A furniture store can display a lamp or a sofa, but does not need to have them in stock. This saves high storage costs and avoids the dispatch of bulky goods like these.
How to start dropshipping
Now that you know the main advantages and disadvantages, have you decided to start with dropshipping? Congratulation!
Good to know:
Make sure that you do not violate existing copyright law with the product you want to sell!
Even if it seems easy and profitable to sell products that have their finger on the pulse (e.g. Game of Thrones mugs, Star Wars clothing, Super Bowl merch), you risk a warning and other unpleasant consequences.
This should always be the first step:Find a product and the right supplier. What sounds simple at first can be a big challenge.
Once you have done your research and decided on a product, you should contact the manufacturer or supplier.
Even in the event that the manufacturer only sells the product in large quantities, in most cases you will be provided with a list of wholesalers who offer or sell the product sample send.
Contact the wholesalers on this list and find out who is the most suitable for your project.
In case you are looking for inspiration what products to usedropshippingthere are various providers and marketplaces for this.
A few are free, but most are only accessible for a fee
Wholesale Central is a free example.
SaleHoo ($ 67 per year) or Worldwide Brands ($ 299 for a lifetime membership) are examples of marketplaces that charge a fee.
Another alternative is BigBuy, which is also active on the German market.
Likewise, trade fairs at which manufacturers are exhibiting are another opportunity to collect product ideas and to enter into important dropshipping partnerships.
It is definitely worth exchanging ideas with other online retailers, whether dropshippers or not - no matter whether at a trade fair, networking event, in Internet forums or relevant Facebook groups.
Dropshipping tip: Before you sell the product in your online shop, you should be sure that it does what it says on the tin!
Order one for yourself and give it a try. This is how you avoid angry customers. Likewise, better product images and videos can be produced in this way.
Nevertheless, you should continue to research, find out about new product trends and try out new marketing strategies (e.g. influencer marketing).
Just as important as the topics mentioned above is the cooperation and exchange with the wholesaler or manufacturer of your dropship products.
Ask questions and try to find out as much as possible about the product in order to be one step ahead of your competition and, if necessary, to receive preferential treatment if there are bottlenecks.
In some cases, it is also worth visiting the production site to get a feel for the manufacturer and the people behind the product.
What do you need to look out for with a dropshipping provider?
The first decision that you have to make after deciding on this business model is to choose a good provider.
Ultimately, the supplier decides whether the project will be successful or not, as it is largely up to the wholesaler whether the products arrive on time and in good condition.
Below we have put together some aspects that are essential to consider when choosing a good dropshipping provider:
1. Comprehensive catalog with constant innovations
There are dropshipping providers who specialize in certain industries and others who offer a more comprehensive catalog.
Depending on what you want to sell, you can go for one or the other.
Choosing to do a wholesale business with a catalog that includes all types of products will make your business much more scalable:
As soon as you want to sell a new product category, you no longer need to turn to new suppliers.
In addition to the variety of products, it is important to choose a company that recognizes the latest trends and constantly updates its catalog.
Internet sales are very much based on viral products and currents that can pop up as quickly as they go away. Just think of the fidget spinner hype!
So it can be important to have a dropshipping provider willing to face these passing trends.
2. Various synchronization options
One of the main factors when working with a dropshipping provider is the synchronization options that are offered.
Because there are many aspects that need to be synchronized (orders, catalog, inventory, carriers, etc.).
The most rudimentary method is CSV files, but they involve more effort and manual work that many salespeople want to save.
For this reason, some dropship providers offer further options: from options that require a certain technical knowledge (e.g. an API to automate the synchronization) to already existing and synchronized dropshipping shops.
3. Accessible customer service
Make sure that your supplier offers good terms and conditions and is transparent when it comes to responding to incidents, shipping defective products or handling returns and canceled orders.
It is also interesting if the customer service is multilingual and can offer you individual service.
4. Multiple shipping options
Dropshipping makes it much easier to internationalize a business than a traditional sales method.
When you have a dropshipping company that covers shipments to different countries, all you have to worry about is selling it without geographic factors being an issue.
Therefore, we advise you to look for a dropshipping provider who has agreements with different transport companies that allow you to sell to many different countries.
However, remember that selling in a new country also requires work on your part:
You need to translate your website and define a sales strategy geared towards a different culture!
5. Provide good customer support
Returns are an essential part of e-commerce and it is important to plan ahead for them.
In the event that there is any problem with a customer's order, it is important that your supplier provide you with a solution in a timely manneroffers.
Look for a provider who covers this aspect satisfactorily so that your customers don't get the wrong impression and you don't have to worry about it as much as possible.
Dropshipping has advantages and disadvantages, but at the same time it also has enormous potential to attract a large number of customers, generate solid sales and let your own shop grow.
Especially for newcomers to the e-commerce world, it is a great way to gain initial experience.
The current, tried and tested method of gaining new customers and growing your own shop (whether via dropship or the classic e-commerce model) are Facebook Ads. You can find out how to use them in our free whitepaper.
Do you want to know how you can easily increase sales in your online shop? By avoiding certain mistakes in the first place. You can find out what kind of mistakes these are in this article: 14 common mistakes in online shops: Improve & increase sales
- What if you lie
- Is SiteGround the best web hosting available
- How do you create an R package
- When will my penis get bigger?
- Can you marry two women in America
- What are the mysterious facts of space?
- How is energy different from matter?
- Are we smart enough
- How was the scissors invented
- Is it possible to think well?
- What are the most widely accepted cryptocurrencies
- Why do people act hard
- What games can I play on the PC
- Why are people afraid of unions
- What is a public good
- Is chewing gum bad for your teeth?
- What is 5 5 3 3 1
- Is chocolate palaeo
- Is eBay dropshipping profitable
- Will overtake Python R ind data mining
- Is it illegal to block cars in parking lots?
- California has a high crime rate
- Can DNA be duplicated
- What makes you want to answer someone's questions
- How to make homemade cookies
- What is the value of the 1914 coin
- What is information
- Is that a healthy lunch
- Does my grandma qualify for British citizenship
- Is someone really happy?
- What is your secret ambition in life
- What is an electric bell
- How did money become so important
- What are some sad indie games