What is dropshipping? Complete guide

One of these innovative modalities is dropshipping, which facilitates wholesaler-seller and seller-consumer relationships. Surprisingly, its pillars are the digital media and the transport sector; one helps to close deals and the other of shipments. Therefore, let’s learn from this new method of e-commerce that promises promising development in a short time.

Let’s talk about business

All right, here’s the case of Paul, he wants to sell accessories but doesn’t have an inventory of merchandise to offer. However, he knows wholesalers who we will call “Dropshippers”, they own the merchandise.

Paul, in turn, has created an online store where he has offered such merchandise and Sara has placed an order. Immediately, the payment method is provided, the transaction is completed, and all that remains is to provide Paul with the delivery address.

Finally, Kate is informed how soon she will receive her order. Paul has already performed his intermediary role with Sara, now he must assume the role with his Dropshipper. He then contacts his wholesaler and gives him the delivery address along with the payment percentage corresponding to the order. In fact, the Dropshipper is not at all interested in acquiring popularity, only in selling.

The dropshipper may even ask Pablo if he has any brand names he wants to attach to the package to be delivered. Finally, the dropshipper sends the order to Sara’s address in the time frame previously agreed upon by his intermediary (Pablo). This is how Sara receives her order satisfied and in the comfort of her home, Pablo has won a regular customer.

What did we do?

In short, this is the quintessential dropshipping dynamic.  First, someone offers the product (Paul), someone buys it (Sara) and makes the payment. Then, we pay the dropshipper (wholesaler, distributor) and he sends the product to the buyer; absolute practicality.Wonderfully, you don’t need investment capital to start your own store and offer dropshipping services.

This term comes from the words drop shipment  and in Spanish they mean: shipment triangulation. That is, the seller is purely an intermediary, so its role is the most important. It is also the most risky position if not executed responsibly.

Good news and bad news

In the business world, everything has both sides and no one wants to lose out. That’s why, we’re going to take a detailed look at the tipping points and breaking points surrounding the growing drop-shipping sales world.

Point for the good guys

One of the most common problems in starting a business properly is the need for an exact location.

Normally, you would need to ask for a credit or seek investors to give you a boost to start your business and cover certain expenses.

Think about it, you would have to build up a fixed inventory of what you have available to sell. But, by employing the dropshipping method you have the vast inventory of your dropshippers to post in your store. In turn, customers are more attracted where there are more offers.

As a mere human, you would require a lot of time and energy to manage every process of your business.

Not everything is rosy

As we caution, there are certain things you need to watch out for and be aware of in the dropshipping world. First, select the type of products you want to sell, their competitive range.

Make sure that you know your dropshippers, that they are accurate in how they deliver the product and that they deliver on time.

As you level up, you increase your customers and therefore your wholesalers. In this case, try not to overwhelm the customer when offering a quote. Also, set delivery parameters with the wholesalers. 

It is likely, that you sell several products to the same customer, coming from different dropshippers. Careful, make sure to customize this type of transactions and thus not to lose the customer and the trust of your dropshippers.

Take note

As a dropshipping seller, it is important that you always delimit your position, without you there is no buying and selling. Even, establish with customers your limits as such, because the product will never pass through your hands. Also, do not forget your dropshippers, agree, before disposing of their merchandise, delivery times and availability of products.

Document yourself and experiment with email marketing by creating a newsletter with your dropshippers, get all the information from the wholesale company and how they would be willing to deal with you.

If possible, do a test with yourself or with family and friends in the dropshipping circle. Lastly, don’t just be a transaction machine, remember that your buyers are human beings, a detail can mean more customers.

In countries such as Spain, Great Britain, the United States and China, dropshipping is a trend on the rise. Suppliers are waiting for people willing to dabble in this challenging path. Keep in mind, not everyone has the same experience, so you will hear criticism towards those who practice dropshipping.

It’s normal, it’s business, the important thing is how much you are willing to give of your part to make it work. Are you ready to join this trend? Do you have what it takes? What would you like to sell? Leave us your comments.

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