e-Commerce vs Dropshipping: The Differences

Summary

What is e-commerce and the difference with dropshipping?

E-commerce is the activity of selling products on the Internet through a merchant site. There are many variations and strategies of e-commerce with or without stock as dropshipping. Big brands like Decathlon or Louis Vuitton are doing e-commerce by pushing the development of an online store! Here is everything that makes the strength of e-commerce today and why it is an interesting business opportunity to earn a living on the Internet through visitors that you will convert into customers.

What is e-commerce and what are its variations?

If you create a website to sell products online, even if it’s only one or two, you are then an e-commerchant! The principle of e-commerce is very simple.

  1. You may or may not have products that you want to sell.
  2. These are placed on your website.
  3. Visitors arrive on your website through advertising or natural referencing.
  4. They order the product from you and you receive the payment, allowing you to finance and grow your business.

For this, you can use CMS (content manager system). It is an online service or program that allows you to create websites very easily without even having any computer knowledge. Quite practical, isn’t it? You can then use Shopify, Woocommerce or prestashop which are the market leaders. A perfect opportunity to start selling online without having to code your own merchant website! We are talking about e-commerce and creating a store that will be visible to everyone, whether on mobile smartphone, tablet or computer.

There are then different variants of e-commerce:

  1. The pure and hard e-commerce: you have stocks at home or in a local and you send directly to your customer as soon as the product is ordered.
  2. Dropshipping: you have no stock. As soon as a customer orders on your website, you contact the supplier to ask him to send the product directly to the customer.
  3. E-commerce on a merchant website: you sell your products on your website and/or with a merchant website/platform like Amazon, le bon coin or Cdiscount. We speak then about making trade on a marketplace.
  4. The sale with the automated delivery by Amazon FBA: when a customer orders on your site, it is Amazon which will directly deliver the customer in your place with the stock that you will have sent beforehand to them.

Merchants offer products obtained from suppliers and are paid for generating sales. It is therefore an essential intermediary in Internet commerce. Everything has almost always worked like this.

In fact, as soon as you start selling on the internet, you become a kind of e-merchant. For example if you regularly sell products on facebook groups or on leboncoin, you have the soul of an e-merchant! Many people call e-commerce by the words “ecom”. If you’re wondering what the word “ecom” means, it’s simply short for “e-commerce”.

Why e-commerce and dropshipping are a good opportunity?

With the ease of designing websites thanks to CMS, anyone can go ahead and start creating their own online store. It’s child’s play, you just have to drag and drop the elements one after the other to create your site, manage to automate the sending of emails or manage your invoices. This is an excellent opportunity because :

  • You can manage yourself the creation of the site and its different elements.
  • You can launch yourself in dropshipping and online sales.
  • The e-commerce is a field in very strong growth.
  • It’s a job that really only requires a computer, motivation and an internet connection if you are dropshipping!

The rise of internet shopping simply comes from the fact that consumers are more and more used to buying on the internet. It’s so much more convenient to compare prices, find reviews and comfortable because it’s instantaneous as you don’t have to leave your house! This field will continue to grow in the years to come and there is definitely a lot of money to be made, provided you work efficiently.

Dropshipping, it’s not that easy!

Now let’s get to the not so sexy part. As you know, I don’t really like those videos where they say that everything is very simple and that you can buy your villa with a pool from day one. So I’m going to tell you what is now complicated in selling on the internet. It is true that it is not a difficult task, but you will have to take into account these elements before launching you in the e-commerce:

  • Your spelling must be impeccable. For this, you can use online spell checkers to write your product description and the content of your site.
  • You must be comfortable with the internet. Even if a CMS allows you to create an e-commerce site very quickly, you must know all the vocabulary and be comfortable with it.
  • You have to know how to sell, how to write nice descriptions that will increase your conversion rate, how to write enchanting emails and so on.
  • Managing customer service or after sales service is time consuming and will test your nerves.
  • You have to learn how to advertise with facebook, youtube, google adwords, work on your SEO.
  • You need to know how to do some graphic design, some video editing, how to create your company and how to protect yourself legally.
  • There are many extensions to master to create a successful e-commerce site. Shopify is the site editor, but you’ll need plugins to have a customizable drag and drop design. Many templates exist to facilitate its launch.
  • Although making a site seems intuitive, we tend to do it for ourselves. We must not forget that it pleases future customers and work on the ergonomics. Also, it must be responsive on mobile, tablet and computer.

In short, you have to spend a lot of time learning. That’s why I created a course on e-commerce and dropshipping to be armed to the teeth with a very progressive pedagogy! It’s not just creating a showcase site, but creating a merchant site that sells, with or without stocks! All this, to be optimized and visible in search engines.

This is an opportunity to make a real career change and start a new activity that will be potentially more fulfilling. My last piece of advice is to test and retest to see if you like selling on the internet. Don’t give up your job if you have one. You should know that it is a very small percentage that manage to make a lot of money. On the other hand, it is quite possible to earn double the minimum wage (net, if you take out your charges as a self-employed person and your advertising costs) with hard work and learning over several months. Those who succeed are the ones who persevere and know how to accept constructive criticism in order to constantly improve themselves!

The purchase of page and site online

If you want to start with an existing online store that has its own stock, its own products, it is quite possible. You can buy an e-commerce store, as well as sell or exchange it. You can buy the structure, the pages of the site, its brand, its strategy and even from time to time its team (more rare). There are many providers of turnkey website creation, avoid them if you are starting out. You will have to redesign your site several times before you like it.

However, I recommend to have several first experiences starting from 0 and not to involve at first a web agency. This will teach you how to manage everything and how to get your visitors to make purchases and become your first customers, it’s very pleasant! An online store is easy to create without needing to be a developer. Shopify is the most famous CMS to create your website while having a way to do content management.

This will allow you to understand the basic and advanced workings. For example to find an available and interesting domain name, to put your products online, to manage the delivery and to start the creation of an online business (or even physical). The management of such an activity is a whole job, as well as the import, the sale but also the management of human resources, the work on marketing… Don’t forget that you need a legal status to start selling online.

My advice for selling your items in E-commerce ?

The acquisition and visibility channels are the same for all online businesses: you have to test them all to find out what works and what doesn’t. The basics remain largely the same.

  1. First of all, you need a nice website with a good commerce platform like prestashop, shopify or wordpress with woocommerce. These three platforms are in my opinion the best and easiest to adapt to the different software and providers you will have. The website editor you should choose is the one where you feel most comfortable to create an e commerce. It is up to you to choose your hosting providers.
  2. Your online store is a business and it is also a showcase of who you are. You will therefore create a beautiful home page. This is the home page that will present what you do and the products you sell, your story… Fascinate your visitors to convert them into customers! There is no point in running on acquisition channels if your site is not worked on. Each page must contain a coherent speech to promote your products.
  3. You can do some referencing. For example, you sell products and articles in Paris. You will therefore work on the referencing “paris + the keyword you are interested in” to try to bring people to your online or physical store. In this way, you improve the natural referencing of your site by working on the local. You can also do it on a larger scale, that’s the advantage of e-commerce, to be able to sell and get visitors all over the world. Referencing your site is a long term work, but it pays off in the long run!
  4. Speak through social networks that are interesting for your target. You should be present on facebook with a facebook page, but maybe also pinterest or even instagram. It’s up to you to define what is interesting for your target.
  5. Your online business also depends on the opinion of your customers and the quality of the service you offer. Ask your customers to leave reviews on your store, ask also other people’s opinion on what can be improved, even on your marketing strategy.
  6. Make choices about the services you will offer and the development of your online business. I say this because eventually you will have to outsource or even hire. This way you can choose to focus on one specialty of your business and look for people who can help you or replace you on the tasks you don’t like such as computer development for example, even if there is little to do with a CMS.
  7. The goal of online business is to make everything for the implementation of a purchase act, in the simplest and most relevant way possible. Simplify your site as much as possible so that it is easy to understand, improve the user experience as much as possible so that it is fluid and you can avoid losing customers simply because they don’t understand how to place an order on the site. Make your product sheets intuitive!
  8. Never forget to measure the data. That’s the key! Look at your conversion rates, test different sales pages, different audiences. Look at which payment platform is better (stripes and paypal in my opinion), here, everything is electronic, the data arrives in real time and can be analyzed, so analyze!

Then continue to find acquisition channels, test and believe in yourself. E-commerce is a multi-billion dollar market and big companies are created around ecommerce only! Believe in yourself, try to get your first sale and everything will be fine!

By definition, a merchant website is an online store that appeals first to visitors and allows easy online shopping. Whether by credit card, paypal or bank transfer. Take example on the excellent site of Decathlon made with Shopify.

In addition, do not forget to work on the human aspect. A purchase is made through emotion and not logic. Thus, you must take care of your customers and prospects and make them loyal. We are talking about working on the back-office and mailing strategy, the after-sales service or gifts and rewards to give… You can do this thanks to the e commerce tools included in your website creation platform. Shopify has hundreds of applications that allow you to do whatever you want without any technical knowledge.

Concretely to set up a store you will need:

  • A marketing plan: to know how you are going to promote yourself in order to sell your products and especially to know who your target is. No need to make a complicated business plan unless you want to make a successful future start up 🙂 But the key is to make a good market research to solve a problem and to have a good webmarketing!
  • A tool to create your ecommerce store: shopify, wordpress, prestashop, drupal or magento are good sites that require no coding knowledge. A sales site should be simple and effective, no need to have the latest design.
  • Know what your image is: what do you want people to think of your site? What will be the color code and the speech you will adopt? Will you be on first-name or last-name terms?
  • Have a responsive and intuitive site. It’s hard not to get this right because everything is done automatically with Shopify. The site adapts to screen sizes and avoids making mistakes in the customer journey.
  • Measure the profitability of your site and your marketing actions: online business solutions cost money, as does doing digital marketing. Supplier products have a cost. You have to measure all this. It is rare to be profitable in the beginning since you have to succeed in turning your prospects into customers.
  • Knowing a little bit about how deliveries work even if everything is automated, optimizing keywords to improve your site’s SEO and measuring data like clicks. All this is automatically put on your store management dashboard.
  • Manage the customer relationship by making refunds, find solutions to increase the average basket, optimize urls and why not generate custom products as the print on demand allows.

A global knowledge of marketing is necessary but is largely affordable. The school of the field is the most important, you don’t need a diploma to start on these subjects. Creating a web page is not complicated, it is even child’s play. Making a coherent and professional website with marketing will be done gradually. It may take you a few weeks at first, but you will be able to manage a site from A to Z in a few days.

Dropshipping or stocking products at home or via amazon FBA?

Which is better, should you go stock or dropshipping? Everything will depend on the flair you have for a market, but also the evidence of sales you have. Indeed, dropshipping that works will have every interest in evolving towards stock with an own brand. This is to reduce costs and delivery times. By selling on Amazon, there is no need to learn how to create a website, nor to do html code.

Thanks to the stock, you will have:

  • Shorter delivery times.
  • Better margins.
  • The possibility to brand the product, create a brand, have a packaging.
  • Full control over the quality of the products you send.
  • The pleasure of seeing your stock grow and shrink.

In return to dropshipping you will have:

  • A much larger financial commitment.
  • Need for storage space.
  • Need to control the quality of each product.
  • You have to ship the products yourself or via a carrier like DHL, UpS or FedEx. Of course, Chronopost, relay points or the post office also work!

These product shipments can be synchronized with any website creation tool. There are joomla, wordpress, shopify, prestashop and many other CMS that make it easy to create a website. The concept of Wysiwyg (what I see is what I get) allows beginners to easily become an e-business. The only thing left to do is to find a good hosting company. If you work with Shopify, host your site with them. Otherwise, prefer ionos which offers powerful solutions.

These tools are designed to create without a line of code, and the integration of stocks, the management of orders is also done easily thanks to plugins.

As you can see, there are many criteria to consider before choosing an online store business model. Each of them has its advantages and disadvantages.

So, if you have a small budget, start with dropshipping. Once you have sold hundreds or thousands of products, you can order stock.

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Peii henry
Peii henry

A former military man in the French Navy, now financially free. Crypto-currency, real estate and dividends investor, Peii Henry practices as an SEO coach & trainer while working on his e-commerce sites.

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