What is dropshipping? Understand how to set up a virtual store in the dropshipping model and the advantages and disadvantages of this business model.
Dropshipping is a modality of the virtual store, which, unlike the traditional model, does not need to manage and store merchandise stock.
Dropshipping, in literal translation, means “drop the shipment.”
You register and advertise the products in your store. Your customers buy, and all the logistics of delivery is your supplier who will carry out.
In other words, it is a business model that uses third-party stock to operate.
After your customer makes the purchase, you will only have the job of requesting your supplier, according to the purchase order’s data.
Large companies like E-bay, Amazon, Mercado Livre, for example, use dropshipping.
Certainly, it is a highly profitable business segment that has attracted many entrepreneurs’ attention due to the simplicity of the operating model and the low initial investment cost.
Who Can Work With Dropshipping
Dropshipping has attracted many young entrepreneurs because it is a relatively economical business modality that operates only online.
Initially, it takes a good knowledge of computers and digital marketing to start the business.
But anyone who thinks that they need to open their e-commerce and that’s it, that customers are going to rain in the store, is wrong.
We must be cautious, be careful to work with quality products, know where to find, and negotiate with the best suppliers.
With that, you realized that it is necessary:
- good planning and sales strategy
- choose the products to be sold well
- study the profile of the target audience
- find the best suppliers
Although it is the business model highly sought after by young entrepreneurs, people of any age (as long as qualified under the law) can undertake.
Differences between E-commerce and Dropshipping
Having e-commerce means bearing the full cost of logistics and operationalization with its inventory management, among others. In addition to managing your products’ quality, customer satisfaction, and brand in the market, you need to strive to reach more consumer markets.
Dropshipping, on the other hand, does not have all of these concerns.
The entrepreneur’s great responsibility will be to find good products, reach more markets, and mediate the delivery between supplier and customer.
- Low investment
The entrepreneur only needs a computer, a domain, a hosting to start working.
- Remote work
Enables more excellent and better management in sales strategies, having the chance to attract thousands of people, and facilitating communication with its suppliers—a wide variety of products.
As it is online, it does not need stock management and storage. It is possible to work with many products in its showcase, as long as there is a supplier for delivery.
- Work control
Entrepreneurs have greater freedom of time, as they do not have to comply with strict schedules, such as working with a formal contract. I am working from home.
- A lot of competition
As it is a low investment and easy to start a business, it is also very competitive.
- Lower profitability
Most of the suppliers are foreigners; this causes their profit margin to fluctuate according to exchange rate changes.
- Deadlines and deliveries
If, on the one hand, you do not have to worry about logistics, on the other hand, there is no control over delivery times, which is at the supplier’s discretion and clearance at the IRS.
- Difficulty in keeping the registration updated
As all stock is the responsibility of the supplier, there is a risk of outdated items. There is no way to synchronize the products available in the store’s catalog with the supplier’s stock.
- High shipping costs
Suppose the customer buys goods from different suppliers. In that case, the shipping cost will be according to the number of suppliers, which makes the operation burdensome and may lead to the purchase withdrawal.
- Low attractiveness
As a large part of the tenants operate with suppliers from abroad, mainly from China, there is a delay in reaching the products to the recipient customer. This ends up leading many people not to opt for dropshipping.
Returns and Exchanges
As the shopkeeper is not responsible for packaging and shipping, he has no way of knowing whether what is being sent to the recipient is in accordance with the order.
As the possibility of receiving wrong orders by your customers is excellent, you must be aware of the warranty and returns period.
Is it worthwhile to open a Dropshipping?
It depends on your goal.
This modality has many risks, so it is necessary to be aware of all the responsibilities assumed.
Before you start, assess all risks, choose suppliers well, and only begin with minimum security.
It is worth emphasizing the importance of legalizing your company and making a business plan before starting the operation.
Dropshipping: What it is, how it works and what are the best courses on the market in 2020
The market offers many options for having e-commerce, and dropshipping is an exciting way to start. The reason is simple: the investment is small, and there are not so many responsibilities, such as inventory or delivery, with only selling.
Certainly, the big secret is understanding how it works, and the good news is that you don’t need to have stock.
The central idea of the text, in short, is to make it possible for anyone to understand what dropshipping is. You can soon find out how it works and the best courses on the market in 2020.
What is dropshipping?
First of all, dropshipping is a combination of two words: drop and shipping. Therefore, it is easier to discover the technical usefulness of e-commerce, and it is just a matter of selling.
The delivery process and inventory control stay with the other company and not with your e-commerce. The sale is made, and the order is sent to the partner supplier, who sends the item to the customer.
Above all, it is worth noting that the sale is made exclusively through your online store, so profitability is easily obtained. This is the difference between the price charged to the customer and the price your partner charges you, example:
- Customer price: R $ 150.00
- Partner store price: R $ 100.00
At first, the profit would be R $ 50.00, and here is another important point: there is no limit to the amounts. That way, it is possible to enter the amount you want, and that is why dropshipping is so profitable.
If you have not yet heard about this market, it is common to think that it is new. However, it is much older than you think and became popular in Brazil in the 90s, with Shoptime.
If your age is over 25, you are likely to remember the era of radio advertising. Likewise, the logistics management system was differentiated and was in charge of the partner store.
In the 90s, the dropshipping had sales by telephone, and another store made deliveries. It is clear that the model has changed, but the dynamics are the same, which is why this is the main advantage.
Dropshipping is a fashion among the main stores.
In short, many online stores have remained active, and the reason is very simple: dropshipping . The best-known example is Wayfair, an American company that has been open since 2002 and is very successful.
Other examples can also be cited, and I bet you already bought items, don’t you believe me? Are you going to tell me you never picked up products from AliExpress, eBay, and Wish? Yeah, you bought it, and it’s about dropshipping.
How does this e-commerce model work?
The first step is straightforward and objective: choosing the best suppliers for some products. Thus, it is essential to pay attention to the price charged, the quality of delivery, stock monitoring, and even shipping.
One of the important moments has arrived: choosing the number of products sold in your e-commerce. Thus, it is valid to understand that the operation is in real-time and is as follows:
- Your online store processes the order;
- It is then sent to the supplier;
- The invoice is generated;
- The product left for delivery (the tracking code is the responsibility of the partner store);
- The product arrives at the end customer’s house.
In some cases, the exchange is necessary, and the process is divided between the two parties: supplier and seller. In short, contact with the customer is the e-commerce owner’s responsibility, but the exchange is the responsibility of the supplier.
Remember a fact: the customer does not see the stock and shipping. That is, for all purposes, it is your store that made the sale. Likewise, it is essential to understand that the buying and selling process “is not visible” to the customer.
The dropshipping allows sell more and invest less, to begin with; however, it is essential to pay attention to a factor. It refers to the fact that the consumer does not “see” the supplier; therefore, he believes that everything is the responsibility of e-commerce.
For the customer, the entire process is in charge of the store, and the tip is to look for a supplier who commits. Equally, you must look after the name of e-commerce and help e-commerce to have a good reputation in the market.
After all, does dropshipping work or not?
First, the answer is positive and dropshipping works because the advantages are many. Later, it is essential to know what these benefits are and then check out how the process is simplified:
- The initial investment is lower – The cost of inventories is not necessary. That is, it makes it possible to spend less. Likewise, the company can focus only on sales and not on other points.
- Starting the business is easier – The sales process is easier because there is no need to worry about delivery or after-sales. Along with that, you can understand the process and sell even more.
- Regional flexibility – Costs for renting inventory, stores, and personnel are complicated initially and need to be overcome. However, with dropshipping, it is different, and the cost is only with digital commerce.
- The product range is more comprehensive – As mentioned above, it is unnecessary to have many products on hand to offer, and it is simple to sell. Also, you can test new products and have a higher number of sales.
- It’s easy to scale your business – In traditional companies, the more businesses grow, the greater the company’s investment. However, with dropshipping, the account, in general, closes more easily.
At first glance, it is clear that this business model works and is very suitable for those just starting. Likewise, the cost is lower, and the reach is greater, leaving only attention to the entire sales process.
What are the best courses on the market in 2020?
There are certainly several options for learning how to use dropshipping, but some stand out more. On the other hand, others do not stand out, and it is essential to show alternatives that make a difference.
First of all, the course demonstrates the theoretical part in greater quantity and has its importance, but it is not all. The secret is to have an efficient, practical part, and the courses give a notion, but it is the experience that brings the differentials.
To facilitate understanding and allow you to access the best dropshipping courses on the market, it is time to have all the information and below, check out three good options to get started.
Drop Shipping (Free Online Courses)
For those who do not wish to spend on the course, this option is free and offers a diploma to complete learning. Simultaneously, the fact that it is free does not indicate that it is of poor quality and offers a good introductory basis.
The handout is available to the student, and it is possible to download, study from home and even print, if necessary. Classes are available on the platform and can be accessed at any time, offering much more flexibility for the student.
The only point of attention is that it enables basic and theoretical knowledge, neither deepening nor offering practice. It is worth mentioning that the course is indicated for those who are starting and do not want to pay for another more complete course.
Dropshipping Ultimate: João Pedro
Another beautiful and complete alternative, being created by João Pedro and training thousands of students in recent years. Therefore. This is one of the most exciting courses and appears at the beginning of several videos on YouTube.
The notions of this business model are theoretical and practical, focusing on what worked for João Pedro. Therefore, the content is available 24 hours a day and can be accessed from any location, allowing more flexibility.
The creator’s focus is simple: to make the dissemination possible but in a massive and very assertive way. Anyway, this course is very suitable for those who want to invest in a complete approach and access all this data.
Dropshipping Course: With School
To close the list, it is essential to show a balanced option that provides a not-so-deep understanding; however, not too shallow. The course is held from 7 pm to 10:30 pm, that is, the information provided is very objective.
The focus is to show the importance of the customer/supplier relationship and the relevance that customs issues have. Thus, the virtual store’s creation and the way to advertise are points worked throughout the learning process.
So the most important thing is to have access to several dropshipping courses and, from there, it is simple: choose the one that meets your need. At the same time, seek to study and update yourself on the subject through books or videos on YouTube, as they complement any course.