Surely you have heard of Dropshipping, especially if you own an ecommerce or are considering having an online store. But what is it exactly? Why should you choose to sell products through Dropshipping in Spain? What are its advantages? How do you get it going?
In this post we explain everything in detail, and we even offer you some solutions that we have developed to implement Dropshipping in your ecommerce correctly. We started!
What is dropshipping and how does it work
it is one of the many anglicisms we use in our daily lives, and its literal meaning would be a bit of “dropping the package.” Which goes very well with the fairly simple concept of: you put the products of a wholesaler up for sale and he is the one who sends the packages (because he is the one who stores them).
That is to say, Dropshipping is the sale of products by catalog without investment and at retail , in which the retailer is in charge of making the sale, without him being the one who owns the product (that is, he makes sale without stock . , the retailer reaches an agreement with the wholesale supplier of the products for sale (which is called Dropshipper (since it is the one that “drops the package”), so that it is he who is in charge of shipping the orders to the end customer .
That is why we say that the retailer does not need to store the products for sale, and here we have the first advantage of dropshipping: the saving of the storage infrastructure . In addition, the retailer buys the products from the manufacturer at a lower price than he later sells them, which has another advantage: making a profit >.
That is, if as a retailer you decide to create a Dropshipping store for your online business, you are going to be an intermediary for the Dropshipper (wholesale supplier) and your fundamental task is to achieve the sale.
Dropshipping in Spain has become an interesting alternative for those who want to create an online store and do not have enough financial backing, since it is a business with little investment Dropshipping is a risk-free sales service
Difference between Dropshipping and Affiliate Programs
This is a question that can arise often, since in both the sales that are made are as an intermediary. But they are not the same at all.
The dropshipping is selling products by catalog without investment and without having them in stock. You do it from your own online store or from a platform. And you set the price of the product, based on the margins you want to achieve. You can also start from scratch, like any other business.
Affiliate programs consist of promoting a third-party product or service, through a link that you put on your website or blog and from which they access the other website or business. Every time a sale is made, you take the commission agreed with that person or company. If you already have a well-known website and / or one that has many visits, the better, as you have more chances of getting more sales.
Advantages of Dropshipping
Collecting a little what was said in the previous point, we can affirm that the advantages of Dropshipping stores are:
- There is no risk of economic losses , since as we said, the investment is minimal. You will always have a profit margin (how big or small it is is another matter, of course)
- It is not necessary to hire personnel to store or manage the products . All these tasks are the responsibility of the supplier. This will take away a lot of headaches, and above all, it will save you on personnel costs. That is why we say that Dropshipping is a good technique for those who cannot make a large investment.
- Since you don’t have to worry about stock or order management, you can use all your time to come up with effective sales tactics and focus more on the business itself.
- Like any online business, it is easily scalable , but the case of Dropshipping especially is even more so, since it is very easy to expand the catalog. Also, since you don’t take risks, you can try different products and see which ones work and which ones don’t.
Disadvantages of Dropshipping
Obviously, there is nothing perfect in this world, so we also have to put on the table the disadvantages that you must take into account when setting up a Dropshipping store.
- Lower profit margin on sales. As we have said before, of course, you have profits. Some may be in the form of a commission, so the margin will be less than if you buy and then sell directly. But be careful, because if it is a very competitive market and you decide the price, you will see that in order to get a sale you will have to lower it, and therefore, reduce your margin.
- You do not have full control of the products and their shipments. If they are delayed or there are incidents, facing the dissatisfied or angry customer, you are responsible. To this, we can add that if you work with more than one wholesaler, your client can order (without knowing it) products from different suppliers, which means that their order can arrive in parts. This is quite annoying, especially if you do not have a delivery time margin, because this means spending more than one day pending the arrival of the courier. Not to mention that you will have to pay two shipping costs.
- Even if you save on warehouse and logistics costs, just as you are selling that wholesaler’s products, there may be 548785 other people who do too. You will have to work very well – that is, invest – in the design of your website, usability, and above all, the SEO of your online store. Because you want to get ahead of your competitors, right? Actually, working on SEO and the usability of your website you will always have to do, whatever your business. But obviously, if it is a more differential and unique product (or service), it will be easier for you.
- If the dropshipper provides you with the online sales platform, you will almost certainly not be able to edit files to help the positioning (SEO) of your company, since you do NOT have access to these files or their server. That is, it does not let you do anything that helps you sell more. Therefore, before saying yes, ask them to explain well how SEO works.
And of course, keep in mind that as in any other business, you will have to register as a self-employed person or create a company and all this entails some set-up expenses and other unavoidable monthly expenses.
Who uses Dropshipping
Basically, Dropshipping is chosen by two types of users and for two different things.
- Less risky entrepreneurs . Those who contract a service through which the provider provides them with the tools for sale: online store, advertising banners, etc.
- Daring entrepreneurs . They risk a little more by hiring the necessary services themselves and depending solely on the supplier when it comes to products. In this case, the investment is greater, but so is the control. They are usually people who already have an ecommerce and want to increase their product offer without risking buying stock.
How to do dropshipping?
We give you 8 tips to create a Dropshipping online store. Do not give a hoot, and as always when starting a business, see with a thousand eyes in everything. So let’s get to work: Dropshipping, how to get started?
Choose your product and your niche well
That is, study the competition. Research on the Internet and find out how many stores are already selling that product that you have found so interesting. Because if everyone already sells it, the competition will be brutal and the profit rather low.
Tip: You better choose a less demanded product and start exploiting that niche.
Beware of the Dropshipping Provider
Before starting to work with the supplier, make sure it is reliable, provides you with all the information you need about the products, that there is open communication for possible future incidents … and in terms of logistics, we will tell you what you have to have mainly consider:
- Dropshipper location. If it is from the same country, the better, this way you avoid customs problems.
- How to make the packaging. Do not include your own logos or brand.
- The management of shipments. If you include an invoice in them and if the returns are at your expense or not.
Tip: Don’t believe everything the dropshipper tells you, find out for yourself.
Negotiate with the dropshipper
It is not only a matter of trying to improve the prices of the products and thus increase the sales margins that you can get from them, but also of negotiating if possible the delivery times of the products to customers. With all the information they give you, make sure it is worth the investment.
Tip: Keep your accounts clear. This is essential.
Attention to the clauses you sign
Above all, be careful with the responsibility of the returns that we said before. With most of the providers, you are the one who assumes them, so it is an expense that you have to see if it compensates you or not.
Tip: It’s pretty obvious, isn’t it? Always ask if there are actions or expenses that you will run on your own!
Study the facilities well
Some dropshippers offer facilities in the payment method of the products that you have bought to sell, or they even finance the platform (the non-editable online store) or offer you advantages of some kind to start your dropshipping store. Obviously, their interest is that you sell and make it profitable, so keep in mind that the facilities will only last as long as you sell. Which is not always so easy.
Tip: Study the profitability of the product you want to sell before anything else.
The SEO of your Dropshipping store
In general, it is very difficult to position a Dropshipping store well, because all other stores will have the same descriptions on their products, which leads to duplicate content. If you know something about SEO, even if it is little, surely you are already tired of hearing that duplicate content, for Google, is disastrous. But it is not only because of that, it is that if you differ from others, it will be easier to stand out and therefore sell.
Tip: Even though it may be laborious, spend time and resources modifying product descriptions and titles to make them different from your competition. Start at least with the ones that interest you the most.
Do not get into this if you are not going to be able to invest in online marketing. He who does not invest does not win. This is so and no matter how much you will, just by making an online store you will not increase conversions. You have to work it.
Tip: Create your own community, move on social networks, work on your email marketing, invest in advertising… come on, as with any other online business.
Make sure your customer is satisfied
Since almost certainly the whole post-sale process will not depend on you, but on the supplier or dropshipper, make sure to contact the customer once they have received their shipment and ask if everything went well. In this way, in addition, you will be loyalty.
Tip: The best thing is that you send him an email or even a message, where the client can easily assess the entire process, as well as leave comments.
Dropshipping providers in Spain
There are many dropshipping providers, and many of them are specialized in a specific market: hospitality, agriculture, toys, clothing … But the vast majority are located outside of Spain. If we talk about a dropshipping supplier in Spain, we would say that right now the most prominent is Big Buy.
Although Big Buy is a dropshipping wholesaler based in Spain, it is also available in 24 European languages. This can be very convenient for the entry into force of the law by which European online stores must not have borders and can sell in any country. Of course, find out about the tax obligations you have when selling abroad.
For the rest, the range of products and suppliers that you can find on the Internet is very wide; You just need to get in touch with some of the many product providers that support this business formula and sell the product that interests you. Remembering to take into account the guidelines and advice that we have given you in the previous section when you contact any dropshipping provider.
Choose the right platform for Dropshipping
If you opt for your own online store , of course, Prestashop is one of the platforms on which you can set up your Dropshipping store. You can also opt for Magento or Shopify .
As Prestashop experts, at Innovadeluxe, we can help you integrate your store with the product catalog of the provider you have chosen. We have experience in integrating with a large number of different providers, so you have nothing to worry about:
- We import one or more catalogs to your store
- We integrate your Prestashop with more than one Provider
- Automated (daily) catalog import
- You can mark by sections the prices of imported products
- Super fast imports, you won’t even know
If you opt for an external platform , you can choose from the top 3:
- Dropshipping on Amazon: You just have to register and choose your seller plan, the Standard, or the Pro. The next thing is to upload your inventory and publish your products. The good news is that Amazon is one of the most used search engines, along with Google. We gave you a few keys on how to sell on Amazon in this post (drop shipping or not)
<li ”> Dropshipping on eBay : You register on the platform as a Professional Seller, giving your company data (CIF included). You upload and describe your products and choose the payment method.
- Dropshipping in> AliExpress : You register your store by selecting the category in which it is located (fashion, electronics, etc). Add the products that interest you to your store, and that’s it!
After everything we have told you, we think the conclusion is clear. Dropshipping can be ideal as a complement to an existing business, or as a “test bed”: testing the sale of a product without risking capital by not investing in it. And if it works, you buy stock and sell it directly.
But we don’t think it is a good idea to base an entire business on this sales model. Margins can be very small, and the wholesaler can’t (and doesn’t want to) take over thousands of retailers who make a few dozen sales out of them per month. Which is logical. So you may find yourself dropping that part of the catalog.
However, as always, everything is relative and it will depend a lot on your sales force, how you work your store, how you face the competition … If you have ever had a Dorpshipping store and want to tell us, you can do so in comments . Or if you are considering it and want to ask a question, too.