Back to Basics: What is Dropshipping

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Dropshipping is an order fulfillment method where you do not have to keep inventory in your store, but instead a supplier automatically fulfills orders for you and ships items directly for you. Basically, you are the middle man in between a dropshipping supplier and a customer. So where to start?

Most commonly, people will use e-commerce platforms like Shopify to host their store and sell products that can be found from third party dropshipping suppliers, places like AliExpress. With AliExpress, you are connected to thousands of suppliers that you can choose from to fulfill your orders. 

Over the years, stories of entrepreneurs finding success dropshipping on Shopify have flooded the internet, but just like starting any business, knowing how to run an ecommerce business is key to finding success in dropshipping.

dropshipping process
image source dodropshipping.com
Benefits of Dropshipping
1. Low Cost

Since you aren’t holding any inventory, you do not have the cost of buying all your products upfront. You do not have to invest thousands of dollars into your new dropshipping business, all you need to do is set up a website and start testing different marketing strategies to sell your product. Because you do not have to keep inventory, you never have to worry about having a warehouse or even leftover inventory. 

2. Easy to Start

With the growth of the dropshipping industry, there are numerous dropshipping management softwares and dropshipping fulfillment services that can help you. Dropshipping management services manages all aspects of your  dropshipping business.

RondeVu manages order fulfillment, assists you in product research, and competitor research. It also integrates fulfillment services, so you can streamline fulfilling orders from your Shopify store with your chosen AliExpress supplier. 

2. Work From Anywhere
work anywhere

Since everything is automated and your business is online, you can work from anywhere. This takes work from home to a whole other level.

3. Abundance of Products
product search

You don’t have to choose a product and stick with it as you do not have to hold inventory. This means, you can use product research tools to discover what is a hot item to currently sell, easily add it to your store with one click, and begin selling any product. 

4. Easier to Scale

Since there are an abundance of products available, you can easily remove and add products to your store. Not only that, but you can grow sales much faster as adding products to sell or being unable to fulfill an order is never an issue. The process will still go through your dropshipping management software, and you do not have to individually pack your products to ship. 

Cons of Dropshipping
1. High Competition

Since you are finding products that are hot selling items, there could be numerous stores that are selling the same product and even more well established stores that are selling the same product.

In order to avoid this and set yourself up for success, make sure that your website is well thought through and has strong customer service.

At RondeVu , you can even use the Shopify Product Scraper to scrape 4 million Shopify stores, so you can search a product and see other Shopify stores that are selling the same thing.

2. Shipping and Inventory

Shipping times can vary for your Shopify store, especially when you are using suppliers from different countries. You have no control over the supply chain and shipping costs can vary, as can product shipping times. To streamline these efforts, RondeVu shows you average shipping times for each AliExpress supplier. 

Sometimes, inventory can get low from one AliExpress supplier or their store will just completely get rid of a product. To easily pivot from this, there are multiple suppliers that are most likely selling the same product, so you would just need to switch your supplier.

Read here how to prevent it – How to set shipping options and How to change supplier

3. Trusting Suppliers

Poor quality suppliers can cause issues with customers and for your store, like if the supplier never actually sends your order even though they took your money and sent you a fake tracking number.

At RondeVu, you have the option to use suppliers that are verified by AliExpress, meaning AliExpress have checked out the business to make sure they can handle large orders and are a valid business.

4. Limited Branding Opportunities

Since you never physically touch the products that you are selling, you do not get to include a customized box with your logo on it or even have the product be branded.

But, down the line when you find a product that you are selling consistently well, you can begin ordering more quantities and begin holding inventory to expand your business.

Let’s See The Money

To get started, a quick cost breakdown includes an online store ($29/month), Domain ($20/year), and advertising ($500/month to start). This means you only need less than $600 a month to start your business!

Take these costs into account when you are pricing out your products, we recommend looking at the Shopify store scraper to see how the product you selected is being marked up on other stores to determine the perfect price for you.

Are you ready to start your dropshipping store? Start your free trial now on RondeVu! 

 

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