Dropshipping eliminates the risk associated with investing in large financial contribution, that’s why it is recommended for people who want to start their e-commerce adventure. The low threshold for entering the market sounds encouraging and for many people raises doubts about profit. See if dropshipping pays off and find out what to do to sell more than the competition!
Dropshipping model in the online store
Running online stores are becoming more and more popular not only by consumers but, also future entrepreneurs who see online business as a viable way of investment. Dropshipping has definitely had significantly influenced the development of new e-stores and is currently the most-chosen logistics model for the online stores. But what is it about?
Dropshipping brings to mind:
- Running an online store without a warehouse and having large stock of goods.
- A chance to open an online store without a large financial contribution.
- Minimizing the time and personnel needed to complete orders.
It may seem that such sales are impossible. Meanwhile, dropshipping removes a significant part of the seller’s responsibilities and allows you to focus on marketing. How does it look like? When running an online store in a dropshipping model, you order commodity from the warehouse (and you pay for it) only when the customer orders items in your store. The wholesaler packs the parcel and sends it to the customer on your behalf. As a result, the package reaches the recipient directly from the warehouse, and you can save on renting warehouse space and payroll for employees.
Is dropshipping profitable?
It’s obvious that all entrepreneurs want to earn on their businesses as much as possible, so the question about the profitability of dropshipping and income should not come as a surprise. A few important factors:
- Easy start of dropshipping relates to a large number of new online businesses
- At the beginning of cooperation with the wholesaler, you can not count on low prices of goods, and hence high profit on each of the products.
- Other entrepreneurs who use the same warehouse will have the same commodity.
- Dropshipping in the sales season can pose difficulties related to the availability of individual items.
Dropshipping is a very convenient model to use but it does require work. The disadvantage is the difficulty to break through the competition, but recognizing this fact will help you to prepare a solid plan. The profitability of dropshipping will depend mainly on the marketing campaign you will implement. Check below what steps to take to make money from dropshipping!
How to gain profit in dropshipping model?
Assuming that many sellers (especially beginners) will have very similar prices, remember that you can encourage customers in other ways. If you want your business to be profitable in the dropshipping model, pay attention to:
- Create unique products descriptions and good pictures quality, this will help you to gain a higher position in Google, and the clients browsing the offers will not have the impression that they see the same products again.
- Wide advertising of products, e.g. in blog entries, by product comparison.
- Use price comparison engines and marketplaces, that are additional sales channels.
- Differentiated yourself from other sellers, for example, professional customer service and fast reply to e-mails, faster shipment established with a wholesaler, a wide assortment obtained from several warehouses, presence on industry forums, transfer of part of the profit to a charity organization, etc.
Set your mind on the fact that at the beginning working in the dropshipping model you won’t earn big money. Most experienced people say that the right way is to sell a large number of goods with a small profit because it will provide the warehouse with a large number of orders, and thus – lowering the price of products in the future. The rebates you gain from the wholesaler will allow you to earn more.
How to start dropshipping?
As dropshipping is a logistic model for an online store, it’s good to choose dropshipping software (e.g. offerer.com) that will allow to work with wholesalers. The key aspects in the selection will be the amount of integration with dropshipping wholesale companies, the number of inventory updates during the day and the ability to efficiently change descriptions and photos of products. In addition, adaptation to mobile devices (RWD), the speed of page loading and having friendly links is also a huge advantage.
After choosing the right e-commerce software, you should choose a warehouse in the industry in which you want to operate, accept its terms and conditions, and then download the products to your store.
It’s impossible to distinguish industries in which dropshipping is profitable. Almost every product available on the market can be sold by this system. However, special attention should be paid to seasonal and fashionable products. Observing the market situation is, therefore, one of the best ways to have products that consumers crave.