A traditional online store requires product inventory management and shipping logistics. A new, alternative idea for e-business is the so-called dropshipping. Unlike traditional e-commerce, dropshipping allows you to set up an online store without managing inventory and shipping. Find out if this is for you.
How does dropshipping work?
The fact that seems to be the most popular when it comes to dropshipping store is the lack of necessity to have products sold. This in turn entails savings related to warehouse space and logistics. The main area of activity of the entrepreneur who decides on the aforementioned distribution method will be promoting the store. They also take care of convincing clients to their brand and gaining new orders.
The order that was placed in the online store then goes to the Seller’s panel. From there you should send them to the warehouse with which you are cooperating. The warehouse, on the other hand, deals with the further part of the process, packaging and shipping of goods to the final customer. As a seller, on the other hand, you earn on the margin you have imposed. The margin has no upper limit. Most often, the market Verifies at what price customers are ready to buy a given product.
Who is dropshipping for?
Dropshipping is a good solution for small stores or beginners in the online business, which usually sell products in smaller quantities and do not want to Freeze funds in large quantities of goods in the warehouse or want to outsource the order processing process. A wholesaler or producer, as a supplier of products to a dropsipping store, sends the goods directly to the customer. Dropshipping is also very often practiced for large-size goods such as furniture.
As the owner of a dropshipping store, you set your margin and sell products from wholesalers. You can set your Own prices for products in the store, and you can change the product margin at any time. You can change prices by any percentage or amount.
How do you start selling in a dropshipping model?
Of course, start from opening a business and run a fully functional, customer-friendly online store. Setting up an e-store can be very simple, especially when using ready-made solutions developed by the RedCart platform. The next step is to create a business plan and, obviously, find the right dropshipping wholesaler.
Modern internet wholesalers, including not only dropshipping ones – provide online stores with a product database in a regularly updated file, usually in XML or CSV format. Using a special file prepared by the warehouse, data such as listed below are shared:
- product name;
- product photos;
- wholesale price;
- tax rate;
- product description;
- brand / manufacturer.
Thus, one of the most important conditions to be met when undertaking cooperation in the dropshipping model is to provide an IT infrastructure that allows you to connect your online store with the supplier’s product base, enabling you to import products into the store and systematically update the inventory.