Dropshipping: What Is It and How Do You Get Started?

In e-commerce, put simply, dropshipping is a way to manage inventory acquired with limited resources and then sold quickly within legal boundaries. Four or five years ago, few people would have heard of dropshipping. Today, with the many web tools that make it easier to create an online business, the model has experienced spectacular growth.  

What is dropshipping? 

Dropshipping is an English term that means direct delivery. This business model involves three key parties: the online store, the supplier, and the customer. In practical terms, the store acts as a gateway connecting the customer and the supplier. Customers’ orders placed on the website are forwarded to the supplier, who handles delivery. Dropshipping is not limited to a single type of product. Although it is primarily used in e-commerce, this does not prevent other distribution methods from being involved.

Dropshipping forms a complete economic circuit in its own right. There are risks, profits, consumers, suppliers, and more. It is certainly a versatile model, but it works well if you know how to manage it. Sales can cover everything from electronic equipment to books, clothing, and more. It is worth noting that not every product is suitable for dropshipping if the conditions are not right.

By the end, we will have concrete strategies that we will explain throughout this article. 

Why choose dropshipping?

It is often said that dropshipping is a way to make a lot of money. Indeed, whether from a logistical, financial, or administrative perspective, everything seems to support this idea. 

The advantages of dropshipping

It may sound ironic, but the seller does not physically hold anything. The main advantage is being able to trade without holding inventory.

From a management perspective, costs and time are significantly reduced because there is no warehousing or handling. There is no need for storage facilities—at most, only a room to receive orders and carry out an inventory—and there is no risk of stockouts. Nor is it necessary to tie up working capital in inventory. The risks of products expiring or being damaged are reduced. Transportation costs are virtually nonexistent, and the delivery route is shorter than usual. Insurance-related costs are also significantly reduced.

In terms of optimization, dropshipping efficiently distributes the workload, helping achieve strong performance. The supplier makes a profit without having to invest much in promotion, communication, or advertising. The seller, meanwhile, does not have to worry about manufacturing or logistics. They can focus on their marketing strategies. Finally, the customer benefits from a fast delivery service.

One of the main advantages is being able to start a business with a minimal budget—or even no budget at all. This is a great opportunity for anyone who wants to become an entrepreneur.

 Ultimately, the website can generate more revenue than expected if we know how to identify an attractive offer from the supplier.

The disadvantages of dropshipping

The disadvantage of not operating like a traditional business is that certain aspects are beyond our control. 

We are not in direct, face-to-face contact with suppliers. Therefore, we cannot guarantee that: 

• the products are of good quality
• the orders match what was agreed,
• delivery took place on time.

Failing to meet these three essential criteria can destroy your credibility with customers. That is why you must be careful when choosing your suppliers.

How can you avoid failing at dropshipping?

If you do not intend to build a dropshipping e-commerce business, you can skip this section. It outlines effective strategic advice that will help you avoid the disadvantages mentioned above.

Your e-commerce website should follow these recommendations to sell as many products as possible through dropshipping:

Better safe than sorry

Relying on a single supplier is actually one of the main disadvantages and a major cause of business losses. Avoid depending on just one source. It is easy to become comfortable in your comfort zone.

You should continually look for other suppliers offering dropshipping. Online traffic is extensive enough to make this possible. That way, if one business channel closes, you can find alternatives with new suppliers, and so on.

Building strong relationships with your supplier

Dropshipping can encourage sellers to completely isolate themselves from their suppliers—the “neither seen nor heard” approach. However, once you reach a certain sales volume, it is preferable to try to contact your supplier. Your business relationships will only benefit and grow stronger.

How do you set up your dropshipping business online?

In practical terms, launching a dropshipping business mainly involves three steps:

 1. Finding suppliers

Finding suppliers online requires considerable skill. You need to contact different people and know how to convince them to work with you. Meet their expectations and seize the opportunity to offer products that stand out from the competition.

 Avoid unpleasant surprises by carefully checking every stage of the sales process, especially the products. Closely monitor orders through delivery and maintain regular contact with suppliers, even from a distance.

 Dropshipping suppliers include AliExpress, Alibaba, and Chinabrands, among others. There are also marketplaces that support this type of business, such as Amazon, Ebay, and Rakuten.

 2. Creating the e-commerce website

 First, choose from the many platforms available, such as Shopify, Prestashop, or WordPress. Once your website has been created, develop your product pages in a way that makes customers want to buy. Do not forget to provide secure online payment methods such as PayPal or Payoneer.

 Sell with customer satisfaction in mind. Positive feedback encourages customers to recommend the website through their testimonials.

3. Building brand awareness

 This is a crucial stage. If no one visits the website—and therefore no one buys your products—all your efforts will have been in vain. 

Here are a few tips for attracting online traffic:

• add strong visual elements, such as clear photos and colorful product pages,
• regularly refresh the website’s written content, for example by maintaining a topic-focused blog,
• build your presence on social media,
• make the most of special events, such as promotions or free gifts, to boost sales,
• carefully collect and showcase reviews and testimonials from satisfied customers 

Running an e-commerce business requires a great deal of patience. Take the time to complete each step of the dropshipping process.