Beginner’s Guide to Dropshipping

Have you ever dipped your toe in the shallow of online business? Do you feel it daunting because you are just a start-up and online business can cost you high bucks? Is it tiresome for you to carry out inventory risk and fulfillment hassles?

On the top of these huge questions, are you also worried about the smaller issues like how to find a good niche market? If at all you start your business, how would you get suppliers?

But, what if someone offers to pay all the inventory cost for thousands of your item and also helps you in managing your fulfillment operations!!!! Wouldn’t it be easy for you to start by sitting somewhere on the beach and coordinate your whole business with little efforts? Sounds good… right?

This is possible if you think of doing dropshipping business.

What is Dropshipping?

Drop shipping is the supply chain management method, where you do not have to hold the inventory stock but you can transfer the details of your customer to either manufacturer, wholesaler or just another retailer who then ships the order directly to the customer.

To simplify the process, let’s take a look at how traditional business model works as well as how dropshipping works.

Traditional Way

• You keep the track of your inventory and order products from the supplier
• You keep those product until you receive customer’s order
• To ship the order, you need to pay for packaging and shipping

Dropshipping Way

• You wait for the customer’s order without holding the stock of product
• When you receive the order, you forward it to your wholesaler, manufacturer or other retailer
• They then prepares the products and ships it to the customer

The biggest benefit of this business is that, you don’t need to store your inventory and not a huge capital to invest … Sounds well? Then continue to know more…..

Other Advantages of Dropshipping

• You can offer item instantly: When you start online product selling, you will have to wait until all the existing product is shipped because there is no point in offering an item when you actually can’t sell it. Using dropshipping you can get chance to decide what you want on your website as per the market trends.
• You can have huge product collection: You might have always aspired to have a wide range of products!! This is possible only with this business, you don’t have to worry about colors, sizes etc.; just list them on your site and your supplier can deal with rest.
• Flexible location: You can run your business from anywhere with just an internet connection. As long as you can communicate with your supplier and customer easily, you can run and manage your business from any remote location.
• The start-up cost is less: To set up your online business, high capital is needed to buy inventory of products and you can’t predict how fast your inventory will move. This business avoids such problems, eliminating the risk of unsold inventory.
• Time savvy: Organizing your stock and preparing for delivery is always time-consuming. But, using a third party to handle entire fulfillment helps you to focus on your core business.

How to Find Dropshipping Wholesalers

Searching for the best dropshipping supplier is like finding a needle in a haystack. It can easily lead to frustration and failed attempts can ultimately result in giving up. So, we have put together some ways that can ease your pain in searching for the best one.

• Contact your manufacturer directly: Check out the product that you wish to sell and contact the person who manufactures it. Make a list of different products & manufacturers and ask if they dropships. In this way, you will spend less time in finding supplier and product you are looking for. This is an easy approach to develop list for the products you want to offer.
• Subscribe to the directory: Not all the distributors will be willing to dropship; in such case, you can opt to subscribe the directory but you need to be cautious as the market is flooded with scams and low-quality information. World Wide Brands is one of the popular directories of the dropshipping wholesalers where buyers and sellers have an easy way of finding each other.
• Use Google: Many suppliers have an awful online presence, so you need to dive deep into your search result- may be the 10th page and onwards. When you search for the product, use relevant keywords like wholesale, drop ship, supplier, fulfillment, wholesale only etc. In-case if you find a supplier, don’t get surprised with their look and feel of the website as suppliers do not bother creating top-of-the-line online experience. Instead, focus on the contact page and make sure information is accurate.

Challenges of Dropshipping and Its Solution

#1 item is out of stock

Solution: Although how much you try to keep your e-commerce partners aware about product availability but it may happen that product goes out of stock. To avoid such problem, you can work with multiple suppliers which will increase the chance of product availability. You can also suggest any alternatives that you might have for your customer; they may feel good to change their order to another product. You can choose an automated inventory management system which can manage the available stocks from different suppliers.

#2 Wrong order/damaged order delivered

Solution: Sometimes your dropshipper may deliver wrong product or damaged product and in such case, customer can damage your brand on social media without a mistake of yours. The best solution to solve this is to have a clearly documented service level agreement with clear terms on returns, refunds, accuracy, delivery time, damaged goods and communication protocol for both you and your manufacturer.

#3 Less Profits and high competition

Solution: It’s true that, the competitive market all over the globe will lead to cutthroat pricing and diminishing profit margins making it hard to build successful business. You won’t be able to compete with price but you can offer value in different way like providing product education, service or selection. You can sell product at higher price than your competition or compromise on margins to stay competitive. Other than that, you can use dropshipping software which will track the current price in the market and help you to stay abreast with the right price.

Who is Dropshipping for?

• People who want varied products without carrying the risk of inventory
• First-time sellers
• People wanting to test the market for new product
• People who want to add products without investing huge capital

Conclusion

Dropshipping is the fantastic business- model – it reduces risk of large inventory and helps to sell broad range of products. Whether you wish to build brand new store or expand the existing one, this business can be tremendous help. It is always the best to opt for dropshipping optimized solution which powers RESTful APIs, managed integrations and SaaS order management platform. We are the one to offer you customized solution that you need for dropshipping business. Let’s talk today!