How does Dropshipping Work? Explanation of Dropshipper

Summary

How dropshipping works in the United States (and in the world)

  • You bring a visitor to your website.
  • Out of a hundred visitors, some will order products that you offer on your e-commerce site.
  • Your website offers products with prices, descriptions and pictures.
  • Once the visitor has paid and is now a customer of your store, you receive a notification that someone has ordered from your website.
  • You will then order the product from your supplier and ask him to ship it directly to your customer.

How does Dropshipping Work? Dropshipping is more and more used in the world of e-commerce and it is not by chance. Indeed, Dropshipping has many advantages in your e-business. If you decide to open a Dropshipping store, it is essential to know how this method works for your website. Our team has tried to answer this question in this article.

I. Presentation of Dropshipping

Dropshipping is a method of e-commerce that allows you to launch an e-shop at lower costs. The process is as follows: you sell products in your store, a customer orders one of your products and you your mission and order the product from your supplier. So the big advantage of dropshipping is that no stock is required. In fact, keeping stock at the beginning can be a big risk, especially if it doesn’t work out. But with drop shipping, if a product doesn’t work out, you can remove it from your shop or simply stop the promotion of this product.

The purpose of dropshipping is to test products. At the beginning of your website you have no idea what will work or not. This is where Dropshipping comes in. The goal is to stock up on products that work very well. Why stock up? Because by ordering quantity you will have a lower price per unit. So if you sell a lot in Dropshipping go to stock it can only be advantageous. So take Dropshipping as a solution to start with a lower investment and when you have results worthy of the name go into stock. Stocking up is something to be wished for an online seller as it is a sign of success.

II. The suppliers in dropshipping

there is only China which can be interesting. Moreover, it is possible to find items that cannot be found elsewhere. This can be good if you find an unusual product that sells a lot. As soon as we talk about Chinese suppliers, we talk about Aliexpress. The advantage of Aliexpress is that there are a lot of products. There is something for every taste and for every price. It is one of the biggest suppliers.

Why dropshipping is bad?

The disadvantage of sourcing outside the EU and USA is the delivery time. This is the biggest problem with dropshipping nowadays. Most of the time it takes between two and three weeks and it is true that not all customers want to wait that long. Especially since there is the behemoth Amazon. Another disadvantage of buying in China is that the rules are not the same as in Europe. For example, it is not recommended to buy in China for baby products because it is not the same rules of conformity. Moreover the last problem is the customs fees, your customers will pay fees when they will receive the product (often for products over 20€ or bulky products).

III. The technology deployed in dropshipping

To do Dropshipping you need a CMS. Nowadays CMS are very used because it is easy to use and especially fast. Before you had to code everything by hand and it was not always easy. Now you can set up a shop in a few days and still have modules that can recover abandoned carts for example. We are not going to make a comparison of the different CMS here because we have already done so in this article. We have compared Shopify and Prestashop with a lot of details that’s why we won’t go back over it. It is up to you to choose the CMS you want.

CREATION OF A PRESTASHOP STORE

At Webdrop, we mainly use Prestashop? Why do we use it? Because it is one of the best CMS on the market. That’s why we offer e-commerce solutions in Dropshipping. By taking these solutions you will have everything you need to launch into the world of e-commerce. We guarantee you a 100% functional store with a professional result. We optimize e-commerce for SEO. The natural referencing is very powerful in term of traffic to not hesitate any more! It will be necessary of course to work constantly your referencing with techniques easy to apply but rather recurring.

If you still want to create your own store, you should know that it is possible. Of course it is much longer and more difficult but not impossible. We all started somewhere! Of course you will have to train yourself to create a store. It will also be necessary to invest considerably in its e-business in order to have a very professional result.
You should not neglect the visual and the UX. What is the UX? It is simply the user experience that is very important. The key is to facilitate customer navigation otherwise the customer will quickly leave the site. If the customer doesn’t take any action it creates a high bounce rate and that’s not very good! But that’s not the point. Know that it is quite possible to create its own store but you can also opt for our many e-commerce solutions. In addition to that our Dropshipping solutions are in very interesting niches with a high demand!

Using Shopify for create a ONLINE STORE

If you’ve done any research on dropshipping, you’ll probably have come across the e-commerce giant Shopify. This solution is one of the most popular platforms for merchants.

Why?

Namely, because it’s:

Sender-friendly: It integrates seamlessly with tons of dropshipping services, including Oberlo, Printful, Spocket, Dropified, – to name a few (but, more on that in a bit):

You can register multiple users: If you have a team, fear not. Shopify supports multiple users for one account. So, rest assured, your staff can help you with all your dropshipping adventures!

Packed with easy-to-use tools and features: In addition to its online store builder, Shopify also has tons of features to help you manage your sales, marketing tasks, and customer payments. This is one of the many aspects of Shopify that make it ideal for beginning e-commerce merchants.

Has an intuitive interface: Just read a few Shopify Customer Reviews to get an idea of how user-friendly this solution is. Despite its wide range of features, Shopify is not an intimidating software to use. In fact, it does a great job of explaining how to get the most out of the platform for new users.

How to create a dropshipping business and get started?

Creating a dropshipping business is relatively easy and requires minimal financial investment. You can do it as a self-employed entrepreneur and therefore have no set-up or running costs.

There are three main steps to starting a dropshipping business:

Find a market and a good product to sell: you can use a market research tool like SellerPulse or you can browse websites like AliExpress and Amazon to find a product you would like to sell. Ideally, the product should be small enough to fit in a shoebox, weigh less than 2kg and have a retail price of $20-$200.

Find a supplier for this product: You can use the supplier directory I offer in my training, with pre-vetted and verified suppliers, search for suppliers on Google or contact them on AliExpress or Alibaba. You need to make sure the supplier offers dropshipping, meaning they hold the inventory and handle the packing and shipping for you.

Choose a marketplace or site to sell your product: You can sell your products on well-established online marketplaces like Amazon, eBay and Etsy, or you can create your own online store using a service like Shopify.

Then, you will have to embellish your website without having any computer skills. This can be done very easily, then do some marketing. This is a job you can learn with this online dropshipping training in less than a month if you are motivated.

How does Dropshipping Work? Advantages

If you’re looking for an easy way to start an online business, dropshipping has some significant advantages.

Low start-up costs are the most obvious benefit. Without the need to maintain an inventory, your costs are limited to website hosting and registration and other setup fees.

You will be able to start and run your dropshipping business anywhere you can carry a laptop, since you won’t need to store your products.

Dropshipping also offers the freedom to explore a wider range of products than buying in bulk. One of your product lines or niches not working? No problem. You don’t have any inventory to sell, you can simply find what you want to sell next and make new listings.

Since your “inventory” is unlimited, you can try new products whenever you want. If your business doesn’t take off like you hoped, you can get by with very little loss.

It is also something very easy to set up compared to the classic e-commerce which is complicated and requires stock. As soon as you have made a sale on your site, you press a button and the order is automatically placed with the supplier who will ship your product!

How does Dropshipping Work? Disadvantages

Drop-shipping has some disadvantages, and unfortunately most of these factors are out of your control.

One of the main drawbacks of dropshipping is that you won’t get the same discounts as if you were buying wholesale. Suppliers are generally not willing to provide you with the wholesale price of items unless you buy in bulk, so you can expect dropshipping surcharges in the price they give you, up to a few dollars more per item than you would pay in bulk. You will then have to raise your own prices if you want to profit from your sales.

Another disadvantage is that you will have very little control over customer service. If your supplier is late in shipping, ships poor quality items or suddenly disappears, your online business will be hurt. Remember, your customers expect their orders from you, not your supplier, and a few negative reviews can be a death sentence for online stores.

Always order products to test the speed of delivery and the seriousness of the suppliers. Without this, you risk showing a very bad image of you and this activity.

Is it legal to do dropshipping?

You may have noticed that some of the content promoting dropshipping, especially some videos on Youtube, seem to be spam. This makes some people suspicious of dropshipping which makes it a frowned upon practice. Also, selling goods online without having to buy stock seems almost too good to be true. Yet it’s a business that has been around for hundreds of years!

But, don’t worry! Dropshipping is 100% legal if, of course, it is done legally. Dropshipping is a legitimate business model, but you still have to follow the same legal requirements as any other business. This means that you must describe your products accurately and make sure that your products are of a reasonable standard. You must also pay taxes and meet all other financial requirements in the countries where you operate.

What is the future of dropshipping?

If you have already heard of AliExpress or Alibaba, you should know that these are the sites where dropshippers come to recharge their batteries. These sites are still unknown by Europeans. They prefer to order on sites like Amazon or etsy which inspire much more confidence with respectable delivery times. Nevertheless, AliExpress is more and more known and people know how to compare the prices of different products on the Internet. So, those who simply do dropshipping will not exist anymore in a few years. That’s why you have to do increased dropshipping, which I propose you the training.

The idea is to use dropshipping as a test and then to offer services as a complement. Then you will be able to stock, customize products or launch them in white label in order to create a real company that does not need to go to AliExpress suppliers anymore. We then work on the image of your brand and considerably increase the value perceived by your customer. This is a key to survive in the future of dropshipping. So I invite you to simply try dropshipping to discover it, see how it works and if you are really interested in this field of e-commerce, you can join my community of dropshipping students.

How does Dropshipping Work? The Warnings

Dropshipping does not only have advantages. If you order a product directly from a supplier in China there is AliExpress, you can imagine that there are very long delivery times. It may take 10 to 40 days for your customer to receive the package. The package may be damaged, not to your liking or even contain advertising from AliExpress that will make your customer worry and complain.

Delivery times are not the only drawbacks of dropshipping. There are for example also problems with customs, VAT to pay in case of customs control, lost packages and of course increased competition since a few months. This is where the interest lies in distinguishing yourself with an additional and complementary service or by improving your two e-commerce stores.

You can be a self-employed entrepreneur to start dropshipping and see how it works. This way, you will reduce your costs and you will be able to start without any risk. The only condition is that you don’t sell dangerous products such as cosmetics, weapons or electronics. In fact, even if you did not create the product, you will be held responsible for any damage caused by your products. As a self-employed entrepreneur, you are responsible and your personal assets are involved, unlike a company.

I hope that you see a little more clearly about the functioning of dropshipping and I wish you a great success in what you undertake.

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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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