Electronic commerce has facilitated the implementation of business models that allow the investor to reduce costs and sell products of excellent quality.
It is common for merchants to think that to set up an online store they have to make large investments. But, really, with dropshipping you can start an online business with a minimum investment.
Read our article to learn what dropshipping is and why it is beneficial for your online store.
What is dropshipping business?
This business model is highly popular today. The person who is dedicated to dropshipping carries out secure electronic commerce, but does not need to store the merchandise to sell it, nor to have an inventory of products, because the entire logistics process is carried out by the wholesaler. In summary, in this model, the seller, the customer, and the wholesaler all participate in the business.
It is worth mentioning that traditional e-commerce works as follows: The customer searches for their favorite products in an online store, adds them to their shopping cart, then pays for them with their favorite payment method, and waits for their goods to arrive at their home. In this business model, the company or online store has an inventory of products and stores the goods in physical spaces. It is responsible for reviewing the customer’s orders and makes direct delivery, without the need for intermediaries.
Sellers or merchants who are dedicated to dropshipping do not have an inventory of products, but they have the stock or inventory of merchandise from the dropshipper or wholesaler. This means that the retailer will contact the wholesaler to send the goods to their customer when receiving an order from a customer.
Now we present you the advantages of dropshipping
1. Requires few investments
Keep in mind that, with this dropshipping business model, you do not need to hire logistics personnel, or have an infrastructure to store the goods, which is really beneficial to save costs. It is recommended that you hire a graphic designer to design your online store on a low-cost platform.
Also, you may need to make a small investment to register as an individual trader. Remember that by carrying out this type of electronic commerce you will receive profits and, according to the law, you must pay the percentage of the income tax established in your country.
When you already have your business running, you must add the advertising expenses. We recommend that you focus on digital marketing to access more customers. In case you do not have the necessary time, you should hire a person to serve customers, either through a chat, email, social networks, among others.
2. The merchant does not need to have a commercial establishment to store the goods
The dropshipping wholesaler is in charge of the entire logistics process, that is, it has the physical space to store the goods and hires the staff to pack and ship the products. This represents an excellent time and money saver for the dropshipping merchant.
Imagine how much money you can save because you will not need to build or rent a store, and you will not have to pay staff to package the products.
Many people are dedicated to dropshipping business because they do not risk a lot of capital to start a business. In the short, medium and long term, dropshipping is very profitable.
3. With this business model you have a wide selection of products
This is an excellent competitive advantage so that you always generate profit from sales. Many traders make limited profits because their inventories are out of stock. That is, they invest money in creating a website and renting a place to store the items. But, when a customer searches for a certain item, he/she can’t find it in your store. Therefore, it is of vital importance to keep the inventory stocked to supply the needs of customers.
With dropshipping, you do not worry about managing your inventories, because you will sell products from the stock or inventory of the supplier or wholesaler. We recommend you always work with wholesalers who have commercial experience and offer various categories of products. Remember that even if you do not maintain an inventory of physical merchandise, you must give an excellent image to your customers with a wide catalog of products.
Did you know that fashion accessories are in excellent demand online? Marketing experts recommend people invest in profitable and stable businesses. Over time, the sale of fashion items has grown exponentially, therefore, it is recommended that you invest in a fashion dropshipping store. Always bear in mind that you decide what types of products you will sell, according to your personal tastes and market experience.
4. The product list is kept updated
Customers always choose to trend products, therefore, you must keep a catalog of items that is always up-to-date for you to make a successful sale. We must mention that dropshipping providers invest capital in the creation of modern and efficient online stores, and in the use of programs that allow them to maintain excellent inventory control. The dropshipping wholesalers will offer you updated catalogs of products, so that your website is always updated, and can be more attractive to customers.
5. The wholesaler communicates with the logistic company
Many parcel service companies do not ship goods to different countries. If you have an online store, it can be a bit complicated to choose the most suitable package delivery agency for your niche. If you do dropshipping, the wholesaler will send the goods using the most appropriate shipping method, and will be on the lookout until that the products arrive at the customer’s residence. That is, with this business model you will save time and money.
Here are some related articles that you may be interested in:
How Can I Start a Dropshipping Business for Free?
Are there Dropshipping Tools to Help Business Become Better?
If you want to find a free dropshipping supplier, we recommend Nihaojewelry for you. Why? First, Nihaojewelry has been in the jewelry wholesale business for years. They have enough experience to control products quality, pack and export products to your countries. Second, there are more than 20,000+ products for you to select from in their online shop, which provides a wide selection for dropshippers. Last and most important, Nihaojewelry provides a free dropshipping website builder for people to start their own businesses.
It is true that dropshipping represents an excellent opportunity to generate income. But, it is recommended that you choose a suitable niche for your business. That is, the ideal would be that you start with a dropshipping store to sell the best-selling products. we recommend fashion accessories, electronic products, beauty and health items, and others. Also, you must correctly analyze your market, choose a trusted provider, build a striking online store, and you should not forget to implement SEO, social media marketing, etc. All these marketing and promotion skills will be an important factor to increase your profit.