Online commerce is a world with its own galaxy and planets, vast and very attractive, especially for those of us who want to make a profit without having a traditional job.
But as usual, when there is too much information on a topic, it is very easy to get lost and not find a clear path with the answers to our questions. Turning the idea of creating that business that we love so much into a mere desire, or to remain stuck in the work system that we already know. Even assuming that something out of the traditional is dedicated to a single “type of person” or “type of work”, let’s see, we don’t all have to be youtubers or influencers to earn money from the internet.
In this article I will tell you about one of the many ways to create an online business with a high profitability, rather, I will explain what an online sales methodology that brings many benefits with low risk margins is and how it works: dropshipping.
For this I am going to give you an example of what could be going through the heads of several people, imagine that you want to create a web page with which you can sell products, in this case we think that they will be dedicated to the pet sector, specifically for lovers of cats. It is important to note that you do not have much capital to invest, you have limited resources and you do not have much time to start.
These would be the basic steps to follow:
- Identify what specific merchandise you want to sell, the most attractive, what has been a trend on social networks or what could solve day-to-day problems for cat owners. From toys, hair cleaners, specialized snacks, etc.
- Evaluate who could buy your products, who is your buyer person.
- Do a cost investigation of the products that interest you, taking into account how much each item costs, if you have to buy a certain minimum amount and add to that the price of shipping to your home.
- You realize that you have to have a place to store everything you buy for your store.
- Add to your list of costs what it means to have a basic website working, such as domain and hosting.
- You decide that you are going to ask for a loan, because the capital that you thought to allocate to this project is not enough to cover all of the above, and that you have to rent a storage room to store everything because you cannot fill your floor with products.
- Now to the logistics of your business, if you already have the products now you have to look for the shipping costs for when your customers buy and, surprise, the material to package each purchase, label printing and the constant trips to the shipping company that better suit you.
- Finally, you have to promote what you are selling, because otherwise no one will find out. Add a budget for ads within Google or Facebook to drive traffic to your website that generates sales.
If you have a quick mind, and you know a little about what this can cost, you already have an idea of what the total of that first investment can be.
The idea of an online business is no longer looking so attractive, but do not despair, this is where dropshipping comes into your life and makes it easier for you.
Let’s start with the basics, what is dropshipping?
As I mentioned at the beginning, dropshipping is a digital business methodology focused on retailers and small companies, who want to start in the digital world without having a stock of products and generating profits on products from suppliers around the world.
It works in the following way:
An ecommerce (store dedicated to pets) makes a sale of a product that it has published, the seller (you) buys it from a third party for a lower price than the one who sold it, and the latter is in charge of packaging it and sending it to the client (buyer) without the latter knowing that there was an intermediary.
In this way, ecommerce takes a profit on the price of the product and removes the costs of purchasing merchandise, storage to store them, parcels, shipping, employees and above all, time.
As you can see, those 8 steps are now reduced to 4:
- Know what you want to sell and to whom.
- Do the cost research of suppliers that sell them.
- Assume the basic costs of the website.
- Promote your website with Google or Facebook ads.
This reduction in steps not only brings benefits in the amount of work you will have, but also a significant decrease in expenses, which will give you a greater opportunity for growth in your business because you will not have to invest all your capital in one fell swoop.
It’s that simple, and it’s proven to be profitable.
We are not talking about this being an experiment, something new that has just appeared in the digital world as a trend. Selling online with dropshipping had its beginnings in 2008. Companies throughout Spain have applied this to their web pages, first as tests to see what sold better and then as a way to lower costs due to what it means to have a large warehouse full of merchandise filling up with dust.
Even ordinary people have put it to the test on platforms such as eBay and Amazon, listing products from suppliers in China that have a very high cost-benefit range.
But, I know what you’re thinking, what are the risks?
This is a business, and like any other it comes with its own set of basic risks that all those who have dabbled in online commerce have to be prepared to assume and solve:
- That the products you choose do not have a great outlet in the market, so you can have little profit.
- That buyers get your products on other websites with a lower price, something that usually happens when your provider is easily accessible to the public as is the case with Aliexpress.
- That the investment you make in ads are not effective or do not generate results and you lose money.
Any of these situations has easy solutions to implement, before you see it as a losing war, check out these ways to change the course of those three risks:
- Checking the popularity and profitability of each of the products that you will publish on your website.
- Establish a system of star products and other accompanying products. An example of this practice is the typical Amazon phrase under what you want to buy, “several people have bought this other along with what you are seeing”, they are generally products associated with the same niche and complement the use of the first, without be absolutely necessary.
- Verification of costs between competitors, profit margins and if it is so easy to purchase products directly from suppliers. Here you will have to think about the value that your brand gives, perhaps in shipping times, much lower price, additional benefits, etc.
- Make a promotion strategy with paid ads that suits your budget. There are many tutorials on how to do this on the internet, and you even have a friend who can help you manage this part, to achieve better results. Remember that campaigns can be changed and edited, they are extremely flexible.
However, there is a risk that does not have simple solutions and can affect your entire business. It’s what literally determines whether you win or lose in the digital market:
Having a provider that doesn’t support you.
Think of it this way, if you don’t have the products because they are elsewhere, you depend entirely on the work and efficiency of this supplier.
Your entire business is in their hands.
From the quality of the product, the veracity of the shipping times, the responsibility for lost packages or objects damaged during handling. Returns or any additional information on manufacturing, use, warnings, everything related to the product has the supplier.
If it is not a solid company, with the ability to assist you directly when there is a problem, there is a very high percentage of you losing money to cover additional costs because your reputation is at stake.
There are hundreds of stories of vendors who went from selling one product to a completely different one overnight. Or disappear completely from the face of the earth, as if they never existed. Other horror stories are those that include products that arrive defective, broken, or completely different from what they should be.
If your business depended on the pet toys that this company was offering you, and overnight it starts selling watches, what are you going to do? Send watches to all cat owners?
Or if, on the other hand, the product is of poor quality and the supplier does not take care of this, you have to rush to buy the product out of your pocket and send it back to the customer, because in the end you are the face of your ecommerce. The customer bought from you and he knows nothing, nor does he have to know, about this third party.
This happens when companies do not have any type of track record, reviews, or support from other brands, and if none of the other ecommerce that work with them has support, it is most likely that this will negatively affect you.
Choosing a company that can assure you of quality in products and stock, payment schemes that give you value, attention to problems and solutions for customers is essential when it comes to dropshipping.
Oh, and of course they can communicate with you. Often times these low-end providers do not offer customer service in the buyer’s language. How can you negotiate or ask them to send a package again because the product arrived destroyed if you can’t even talk to them? And believe me, the translator is not always going to be enough to explain everything that can happen with a purchase.
The good news is that getting high quality china suppliers and global recognition from companies is not impossible, in fact it is very easy.
Within our company, Wefulfill, we take care of doing this work, with multilingual staff prepared to meet the needs of all entrepreneurs, whatever their budget and product category.
Managing both the inventory of products and constant quality control, growing your company by verifying step by step the logistics that we agree on, so that the merchandise reaches the end customer leaving your brand at the top. Resulting in better reviews, more traffic to your website from other potential clients and increasing your profits just by doing the first steps correctly.
All without the stress of chasing after a third party who doesn’t answer emails or decided that he no longer has the products you agreed to buy from him.
Do you want to know more about dropshipping?
Or about china suppliers to count on to start with?
You can click here to see all the articles we have on the subject, loaded with information, tips to make your ecommerce grow with dropshipping, the advantages and disadvantages compared to other ways of marketing online and much more.
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