Dropshipping - what is it and where to start

[Mila Eryomina]

The term "dropshipping" is on the lips of many who want to start their own business on the Internet. Dropshipping is the sale of other people's goods, and in this it differs from the usual trade. A dropshipper does not need to purchase goods, rent a warehouse and control delivery. His tasks are to promote products and look for customers. The supplier does  the rest .

The dropshipping scheme for online stores is quite simple.

1. The seller selects goods from the supplier's catalog and uploads them to the trading platform - an online store, landing page, marketplace or group in social networks.  

2. Adds a markup to the price of the supplier, the size of which determines his earnings.

3. Promotes products and finds a client.

4. When a customer places an order, the seller sends information about this to the supplier.

5. The supplier packs the goods and sends them to the customer.

If the client pays for the goods online, the seller takes the margin from the transferred money and sends the rest to the supplier. If the client pays for the goods at the post office, the supplier throws off the margin to the seller.

Dropshipping Benefits

Advantages of dropshipping, which made this way of trading popular.

Minimum starting capital

There is no need to purchase goods and rent a warehouse, and these are the two main cost items of ordinary online stores. But trading without investments will not work at all, because you need to launch a trading platform and pay for advertising campaigns.

Low risks

A dropshipper can stop trading at any time and do something else. He does not have a lease agreement, unsold goods in the warehouse, an agreement with  the delivery service  and warranty obligations to buyers.

More possibilities

Dropshipping allows you to run multiple stores with different types of products at the same time. You can  create a store  with a huge assortment by simply collecting prices from all suppliers in a niche. Also in dropshipping there is a long tail effect - the ability to earn on many small sales, thanks to a wide range.

Disadvantages of dropshipping

Before you start dropshipping, you need to understand that the separation of concerns with the supplier hides some disadvantages.

There is no way to control the quality of goods, delivery time and stock balances

The dropshipper cannot check the product for defects and ensure that the package is sent on time. These points depend only on the level of responsibility of the supplier. Therefore, it is important to cooperate with reliable companies.

To check the work of the supplier, order from him some trifle for yourself. So you can evaluate the quality of the goods, the accuracy of packaging and the speed of delivery.

The supplier can use your customer base

The supplier from your partner can turn into the main competitor. He retains your customer contacts, so he can add them to his  mailing list to suggest products directly. The supplier has the advantage of lower prices, because he can sell goods at a lower markup.

Dropshipper Tasks

Dropshippers have fewer tasks than traditional sellers, some of them are taken over by the supplier. But some issues need to be addressed by the dropshipper.

How to create a dropshipping website

Without an online store, landing page, social network group or other platform where you can place goods, trading is impossible. Therefore, you need to start creating them.

Filling out product cards

The information content of the cards determines how easy dropshipping will be. Suppliers most often provide dropshippers with a catalog of products that already have photos and descriptions. If you have an online store, you can take a file with goods from the supplier and download them automatically. If not, you will have to fill in the cards manually.

If the supplier did not give a description of the goods, you have to write them yourself. It is difficult to describe in detail the characteristics and features of a thing that you have never seen, so most often they turn out to be uninformative. Customers start calling the salesperson to get verbal advice. And the seller cannot give it, because he knows no more about the product than the buyer. It turns out a vicious circle.  

In order not to get into such situations, it is worth asking for descriptions of goods from the supplier. And if they are not there, contact the supplier at the time of writing and clarify the details.

Product promotion

The main task of a dropshipper is to find customers. He needs to promote the site in search results, set up contextual ads, run ads on social networks, etc. If knowledge is not enough, you will have to contact Internet marketers.

Customer consulting and support

The client considers that the seller is responsible for the quality and delivery of the goods. If problems start, they will call him.

It is difficult for the seller to quickly solve the problem, because he does not control the process. To help the client, he needs to contact the supplier, and this takes time. If you need a guarantee or replacement of goods from foreign suppliers, the solution to the problem can take months.

How to start dropshipping

To become a dropshipper, you need to decide on the type of product, find suppliers and  create your own online store  or page on social networks.

Niche selection

It is worth choosing  a sought-after product  of a low or medium price category - users prefer to buy expensive goods offline. You can make a big markup on cheap goods.

Experienced marketers can trade popular products, but beginners should start with products of average popularity. Without quality promotion, it is easy to get lost in the offers of other sellers.

Supplier search

Use the search to find a suitable supplier. For example, enter "dropshipping suppliers Ukraine" in the search box. And if you're looking for a supplier of specific products, narrow your search to "dropshipping shoes" or "dropshipping cosmetics." Tip: scroll through a few pages of the issuance. Most often, providers do not promote their site. On the first pages it is easy to stumble upon intermediaries, and the more intermediaries, the higher the price of the goods.

Search results for "dropshipping clothes"

Do not be afraid to call suppliers, they are usually interested in cooperation. You can also call manufacturers to ask for a list of official distributors or arrange direct cooperation.  

Suppliers are also searched on bulletin boards and social networks.

An example of a search for suppliers and sellers on the bulletin board

Facebook group for vendor information

Do you need a dropshipping website?

The choice of a dropshipping site depends on the initial capital and ambitions of the seller. If you plan to bid on one or more products, create a free landing page - a one-page site that can be done on one of the specialized platforms.

Landing page example with one product

If it’s easier for you to promote a product on social networks, create a separate page and post photos and product descriptions on it. This method is not suitable for active trading, because orders will come in a personal account and they will have to be sorted manually.  

An example of selling goods on the social network Facebook

There is an option to upload products to marketplaces that promote products themselves. This method makes life easier for the dropshipper, but reduces earnings, because marketplaces charge a commission for services. Trading on these sites will bring a large profit only if a high margin can be made on goods.

Dropshipping Website: Benefits

Creating a full-fledged online store makes it possible to use several sales channels: social networks, price aggregators, marketplaces. And integration with 1C will automatically synchronize balances and prices. An online store will greatly simplify the work of managers. 

A site that is suitable for dropshipping must meet many requirements. It should have a modern design, an understandable catalog and convenient product cards. Each card should have large, high-quality illustrations, a detailed description, and a prominent Buy button. You should also take care of the convenience of placing an order: too many steps to go through and fields to fill in can cause a potential client to leave for competitors. 

You also need to take care of the availability of all the necessary integrations that will automate the work. For example, with marketplaces, price aggregators, payment services and delivery services. All this will help simplify routine work and focus on scaling your business.

Which CMS to choose for dropshipping

A dropshipping site should be immediately opened on the right engine. There are three options: choose a  CMS for an online store , make a self-written website or host it on a SaaS platform. All options have both pros and cons. Although the best option is a cloud SaaS solution. Unlike popular CMS systems like Bitrix and Opencart, cloud solutions do not require searching and installing additional modules and finalizing SEO tools. There is also no open source code that will constantly try to crack. Self-written solutions require the search for specialists, the development of technical specifications and full control of the work process. All this is very distracting from sales and can take a lot of time. Creating a fully operational online store on a cloud solution like Horosop takes several days. 

Summing up

Dropshipping is easier than traditional online trading, but comes with its own risks and challenges. To reduce them, choose reliable suppliers, make a convenient trading platform and understand the intricacies of promotion. And also choose the right platform for building dropshipping websites. The best option is a cloud-based SaaS solution. The launch of the online store will take several days. The client needs to choose a design, upload products and set up the desired functionality. After that, the site is completely ready for work. Cloud solutions do not require the search and installation of additional modules, the refinement of tools, the search for specialists, the development of technical specifications and the control of the work process. 

[Anna Roccova]

Halla Systems Company is a company with which it is very pleasant and profitable to cooperate. Service at the highest level. The best dropshipping company. I would like to note: the availability of price lists with the current availability, a manager who will always help, advise, quick shipments.