Dropshipping is a logistical strategy in which the seller “outsources” part of the stock and sends an order to a national or international company, while he is only concerned with advertising product advertisements.
With Dropshipping, the seller receives the order for the product in his virtual store and forwards that order to a supplier, who should have the responsibility of sending that product to the customer.
In general, selling with Dropshipping seems like any seller’s dream: You can start selling your products with very little initial investment, without having to worry about all the work of logistics, storage and shipping. However, before starting with this sales model, it is important to know a few things:
How does Dropshipping work ?
In practice, working with Dropshipping is to outsource inventory and sales logistics, making the seller an intermediary between the supplier and the customer. This occurs as follows:
- The seller needs to choose a supplier and sales platform that works with Dropshipping.
- Once the platform is set up, the salesperson starts selling products online and attracting customers through marketing strategies, offering a good shopping experience.
- When the customer buys a product , the seller’s platform sends that order directly to the supplier.
- With the order in hand, the supplier is responsible for the entire shipment of the product , from separation and packaging to arrival at the consumer’s door.
- The post-sale counts with the participation of both the seller and the supplier , since contact with the customer must come from the store and the receipt in case of return from the supplier.
It is worth remembering that Dropshipping happens practically invisible to the consumer, who only discovers the process if he realizes that the company described in the invoice is different from the company that sold the product.
How does international Dropshipping work?
International Dropshipping is by far the most popular format among sellers. This is because it is common to use suppliers in China through websites like Gearbest and Ali Express, which feature a wide variety of products at lower prices, which allows for higher profit margins.
However, there are some disadvantages implicit in this type of strategy. The first and most important risk is that there is a CDC legislation on this type of practice with a series of requirements such as:
- Every online store is required to provide CNPJ.
- It is mandatory to provide all additional cost data, including possible taxation.
- It is mandatory to inform deadlines and quantity of product stock.
- The possibility of delays due to the origin of the product should be included on the website.
- The websites need to be registered as a product intermediation company.
In other words, those who work with international Dropshipping and do not follow these requirements have legal uncertainty .
In addition, the seller takes some risks:
- Possibility of taxing the product,
- New international postage fee of R $ 15.00,
- Delay in delivery time,
- Risk of selling low quality products.
How does national Dropshipping work ?
The national Dropshipping market has several interesting opportunities, since there are some companies specialized in this type of operation. These companies work with the supply and the system specifically for salespeople interested in working with this format.
This generates a series of benefits such as: a legal operation, greater agility in the delivery of its products, greater ease of contacting suppliers. However, as there is already a national Dropshipping market, other sellers will have access to the same products and the same conditions as you, which may end up resulting in lower profit margins, depending on the product’s offer.
What are the advantages of selling with Dropshipping?
– It is easy to maintain , Working with Dropshipping is like separating an online sales operation into two companies, where one is responsible for the sale and the other for delivery.
The biggest benefit is that the seller is able to focus on offering the best shopping experience, while the supplier is only concerned with logistics, without having to be in contact with the buyer.
– The low associated cost is one of the biggest benefits of Dropshipping, since it is not necessary to make a large initial investment neither to acquire a stock nor to maintain it
– It is not necessary to make any large investments . Thus, this strategy ends up representing a low risk of loss. This does not mean that it is a 100% secure process, as there is still an investment of money and time, but compared to traditional e-commerce, the risks are less.
– As one of the only functions of the store is to establish contact with the customer, there is a much greater facility to manage your sales from anywhere in the world, allowing greater mobility for the seller. In addition, the need for a team is greatly reduced, as there are fewer tasks to be done.
– One of the most important factors to have stability in e-commerce, is to have products that present good sales throughout the year. When working with third party stocks, it is easy to diversify your products in the way you understand best , and you can even follow instant market trends.
– As the stock of products is outsourced, you have several logistical benefits , since delivery freight can be cheaper in the warehouse region (in the case of national Dropshipping) and you do not have all the difficulties of shipping such as: storage , packaging, shipping and issuing invoice.
– With all these sales possibilities and the time that the seller saves in not having to take care of the logistics of the operation, escalating sales is much easier! Just invest a part of your day to search for new products and new suppliers!
What are the disadvantages of selling with Dropshipping?
– When using Dropshipping, the seller is in practice reselling products one by one. This is positive because it reduces the risk of losses, but on the other hand, it ends up decreasing your profit margin , since the supplier charges more for each product.
– When giving up part of the sale, the seller and supplier end up losing quality control of the full service, so it is difficult to guarantee quality in the purchase journey.
– When working with third-party products, the seller may end up losing the possibility of working with a brand value, since, in addition to the shopping experience not being complete, after-sales factors such as: special packaging, inserts and coupons cannot be used. This can be a problem in the long run, as it becomes more difficult to retain your customer.
– Because it is such a practical sales option and with little initial investment required, several people already use this strategy. That is, when entering this market, the seller must be aware of the great competition so that he can work in a more competitive way or to seek niches not yet explored.
– The separation of sales and logistics can be a problem if there is no communication line between seller and supplier, as this can generate complaints on social networks and websites such as ReclameAqui, affecting the store’s reputation.
What is the difference between Dropshipping, Crossdocking and Fulfillment ?
It is common to confuse these three strategies, since they all involve outsourcing your inventory at some point in the sales journey. However, each one presents a particularity in relation to the others:
As we explained throughout the text, in Dropshipping the customer buys the product on a website, the seller passes this order on to a third party supplier, who issues the invoice and sends the product to the customer.
In this logistical format , the product is taken from one warehouse to another, which functions as a redistribution center . Very popular in large cities where the entry of large vehicles is limited, the system also works for salespeople who do not have stock availability but still wish to dispatch to their customers and issue their invoice.
This strategy also involves the outsourcing of inventory, however, the seller must first acquire a stock and then send it to the responsible company that will store it and take care of the entire shipping process .
This format is advantageous mainly in marketplaces such as Mercado Livre and B2W, because in addition to having the ease of logistical control, the seller also gains more prominence within the marketplaces, which ends up increasing their sales and improving the customer’s purchase journey.
Is dropshipping worth it?
Working with Dropshipping can be a very effective way to make money with a low risk of loss, as long as the seller is willing to give up some things like: control of the entire buying journey, a lower profit margin, and a certain insecurity in the case of international Dropshipping.
With that in mind, we can say that Dropshipping is very suitable mainly for sellers who are starting to sell, or who wish to study the adhesion of certain products or niches in their store.
In the medium term, however, it is recommended to explore other strategies, perhaps starting a stock with your best selling products, since it is always dangerous to depend on just one online sales channel.
8 Dropshipping tools recommended by 8 experts in the market
Dropshipping is a business model that has been attracting the attention of people who want to work remotely and earn money from the internet. In addition, the benefits that this work brings are numerous.
Cost benefit, lack of stock, sales scalability, low initial investment, product variety and work flexibility are the main advantages of Dropshipping.
This business model basically works like this, the professional promotes and sells a product through his virtual store, and sends the order for this transaction to the partner supplier. Thus, the supplier is responsible for sending the product to the customer.
In addition, the order is sent in the name of the store that made the sale, and the professional earns a profit on the difference between the price charged to the user and that charged by the partner
So, if you already work with this business model or intend to start, continue reading this article and discover 8 tools recommended by 8 Dropshipping professionals.
To help with the task of creating an e-commerce and making it easier when selling products, there are some essential tools for Dropshipping. For this reason, we spoke with 8 professionals in the field to get to know the best and recommended by them.
Adspy – João Alisson
The John Alisson is another expert in the world of Dropshipping. If you are looking to learn how to create a digital business, or want to invest in the market, João is a great reference for you.
João recommends a tool called Adspy. It is the largest searchable database of Facebook and Instagram ads in the world.
With a fast and smart interface, you can find large amounts of data until you have exactly what your campaign needs and discover the products that really sell.
AppMax – Thiago Carota
The next professional with whom we spoke was Thiago Carota, he is also a reference in the world of Drop, has the experience and performs consultancy for those who are starting or are interested in this market.
The tool that he recommends and indicates for those who are starting and for those who work with this business model, is AppMax. This is a complete payment solution that will help you increase the sales of your business.
AppMax helps you recover leads that abandoned a purchase and also increases your average ticket by offering special offers to buyers.
Digital Rockets – Caio Carvalho
Caio is also known as Café com Drop (due to his Instagram user), and is also an expert in e-commerce. With all his knowledge and experience in the area, Caio has helped over 1450 students to earn money from the internet.
The tool that Caio recommends is Digital Rockets, which helps in the construction of Landing Pages, in a simple and totally dynamic way. Thus, it is not necessary to have any technical knowledge to achieve a high conversion page.
In addition, the tool provides more than 200 templates for editing and allows total freedom in the creation of pages.
Dser – Drop Victor
If you want to start working from home and make money from Dropshipping, you need to know Drop Victor. He is a well recognized professional in the market and also works with mentoring, where he helps people to leave a minimum wage and earn 1 million reais, in 4 months.
The tool that Victor recommends is User. This plugin will be responsible for integrating your online store with AliExpress. That way, you can manage hundreds of orders in minutes.
The tool is free, and in addition to helping you save money, you also save time and gain efficiency with AliExpress partner suppliers.
HubSale – Fabio Marques
Another expert in the Dropshipping market is Fábio Marques. Together with his friend, Patrick Moraes, they have already earned more than R $ 5 million with the business model.
With all their knowledge, the two also have a very accessible course that teaches from scratch the path they took to profit from Dropshipping.
For Fábio, a fundamental tool is HubSale, a platform that allows the configuration of a 100% transparent checkout.
Judge.me – Andrews Vourodimos
The Andrews works with Dropshipping and also conducts consultancies that have resulted in hundreds of happy customers. You can follow some testimonials within his Instagram profile. And when it comes to high card conversion, he is an expert.
The tool that Andrews recommends is Judge.me . It helps in the growth of your online store by showing positive comments from your customers within your website. After all, nothing better than seeing positive feedback from another customer to influence the buyer’s final decision.
Notazz – Cadu Ads
The Cadu Ads works in the digital marketing market since 2015 and is a reference in Dropshipping. So we couldn’t help but ask which tool he uses to help with his sales.
One of the most demanding processes of a Dropshipping professional’s time is to have to fill in the invoices manually. So, a solution that solves this problem and makes everything easier and faster is Notazz.
This software allows the issuing of invoices and sending them to the customer, all automatically. In addition, you also have access to detailed reports of all issued notes.
Workana – The King of Drop
The King of Drop is another reference in the Brazilian digital market. With online courses and a youtube channel, the King of Drop has already helped and changed the lives of many people who dreamed of working with the internet.
The tool that this professional recommends is Workana. This is a platform that helps when hiring other professionals, as a designer, for landing page creation projects, email marketing specialists, and even programmers and service people.
The platform is extremely organized and has excellent professionals. In addition to saving you a lot of time, you are able to have better control in your business and consequently achieve better results.
If you want to leverage your online sales or are thinking about starting to work with Dropshipping, following tips and advice from those who are already experts in the subject is essential.