Dropshipping Business Model – Reverse to the old marketing ways drop shipping bought a revolutionary change in the marketing methods. Now retailer does not need to build huge inventories and warehouses to store the goods for sale.
Now retailers can direct sell its material to the respective customers and then ask the supplier or manufacture or wholesaler to deliver the goods to its clients.
Dropshipping Business Model Explained via Info-graphic Below:
How Dropshipping Business is Different from Affiliate Marketing?
First, Dropshipping and Affiliate marketing are the two different make money online business models.
- In an affiliate marketing, most of the time you earn a fix commission or margin on a particular product sale, where else, in Dropshipping you sell a product at your desired price and keep the margin between the original price and selling price with yourself as your profit
- Rather, I would say that dropshipping business is more like a Arbitraging thing. In Arbitraging you find product at a lower price and sell it at a higher price at another location or on another eCommerce website. Like: Find a cheaper product on eBay than you place the product to sell on Amazon
- Also, most of the time Affiliate Marketing products are virtual products such as eBooks, Software, etc. Which do not require shipment. Where else in dropshipping, we deal in physical goods which need to be delivered to the client. After sale you handover the supplier’s cost and client address to the supplier and then the supplier shipout the product on your behalf.
So, How Does Dropshipping Model Works?
As mentioned above:
1st. Retailer finds the product at a cheaper rate on different platforms
2nd. Retailer Display The Products On Website or On Other e-Commerce Platform
3rd. Customer Order and Pay for it
4th. Retailer pay the supplier
5th. Supplier ship the product to the Customer.
In very simple language, you are selling someone else product after adding your profit in the original price of the product.
Is Dropshipping Business still Profitable in 2019?
Currently (in 2019) almost 35% – 47 % retailers are practicing the drop-shipping model. It simply means that it is WORKING till date.
Future of DropShipping Business in 2020?
Definitely, it’s going to be hard, actually very hard. with the time passes, the competition in this niche will grow. The online retail industry is growing with almost $500 Billion every year.
Pros and Cons of Dropshipping Business:
Advantages of Drop shipping:
- You can start your online drop shipping with very LOW Investment: You just need a domain name and web hosting to build a website or your online store to display product.
- You have to select from Million’s of products and 1000’s of suppliers: Another great thing about this niche is that you don’t have to stick yourself with one supplier or on a particular product. Websites like: Aliexpress have millions of products to choose from and with over 100K supplier. It is also a crucial part as your 90% success depends on this only. Remaining 10% is your website marketing strategy.
- No limits: Here with “NO LIMITS” I simply means that’s now you have an open sky to trade, Now you can sell products in any country at any point of time. You can have your clients from Canada, Australia, Europe, Asia, etc. As shipment can be done anywhere. ALSO, here “NO LIMITs” refer to the growth of the business. You can extend your business anytime. IF, you are getting success, then adding a few products in your inventory is not at all a bad idea.
Dis-Advantages of Drop Shipping:
- Limit Access: This niche is exploited so much their a very little margin left to enter and work on this model successfully
- Dependency on other: The one thing I hate the most about this business is that you actually depend on others (suppliers). Your success is actually in his hand. If a supplier delivers the goods on time and of good quality as committed, then it’s fine or you can land up into a BIG trouble
- Inventory Changes: Product price and product availability changes on every hour basis. Now if the product is available in lesser quantity than the supplier would like to or will sell it on the higher price, where else you might still charge the old price he quoted to you from your customers. This can actually land you in BIG Debt.
DROPSHIPPING BUSINESS SCAMS
With new users online who are willing to do Drop shipping Business land in the hands of online scammer who take money from them on the name of a product delivering and later on, they simply don’t do it. This way not only the Retailer or Website owner loses his/her money, but also the credentials of his/her online store.
Can a normal person with NO technical background do this business?
Trust me or not. BUT, the top industry players of this niche, are the one’s who were NO where exist before online. It is not hard to get started and anyone with the access of computer and internet, and with the basic knowledge about Dropship Business (Which you will gain from this article) can do it. BUT, your success depends on the research you do about your product and your supplier.
Steps to Build a Profitable Dropshipping Business Model for yourself:
- Specific Niche: Sell products related to a specific niche. If you want to deal in KIDS Items than only deal in products related to kids. Such as Toys, Clothes, etc.
- Good Margin: If you are not saving a minimum of $25 on a sale. Then, do not deal in that particular item. Find other with higher margin.
Most Profitable Sites for finding the Products and Wholesalers for your Dropshipping Business are:
Ali express is a child company of Alibaba. Aliexpress is an online retailer china marketplace. It was found in 2010. Aliexpress was launched to serve internationally or to the international clients.
Is Aliexpress an e-Commerce platform like Amazon?
No. Definitely they both are eCommerce platforms, but there is a slight difference in them. Aliexpress only provides you the details of the products and contact details of their respective dealers or sellers and do not make any direct sales. Where else Amazon directly sells the products online to customers.
How to Create ALIEXPRESS account?
How to Select Product for Aliexpress Dropshipping?
Shopify Drop shipping Business Quote: “If you are not on Shopify, you can’t succeed in Dropshipping Business“. So what exactly is this “Shopify“?
Let’s find out:
Shopify (Shopify.com) is an eCommerce platform. Where users like us can make a beautiful eCommerce store and display all our products.
It is basically a Canadian e-Commerce firm. Shopify has near about 10,00,000 business in about 182 countries worldwide. It was established in 2004 by Scott Lake and Daniel Weinad and Tobais Lutke. They offer multiple tools to market products, engage users, receive payment, track shipping etc. within the platform.
In 2009 they launched:
Shopify Dropshipping App
– It helps the shopify users to manager there order from mobile phones.
In January 2017 it clubbed its services with AMAZON and now Shopify users can directly post the products on the Amazon platform using Shopify platform.
To read more about Shopify.com, please visit the link given below:
Shopify e-Commerce – Step by Step Tutorial:
TOO Many Products and Wholesalers. How to choose among them?
For this you can refer to a Guide called “SALEHOO“. It has a list of over 8000 Wholesale Verified Dealers and their Products details.
To Read More About: SaleHoo.com, visit the below given link:
MY PERSONAL OPINION:
Aliexpress Dropshipping & Shopify Dropshipping is DYING … WHY?
These 2 platforms (Aliexpress and Shopify) are so exploited by the online seller or websites that the margin on products has reduced drastically. To overcome the competition, ONLINE website has reduced their margin from 100% ROI to only 1% to 5% ROI. They are actually fighting for pennies.
Then, How Can You Make Money Online with Drop Shipping Business?
It is a SECRET. If I reveal it here, then it will NO LONGER remain PROFITABLE…
To Find Out More Join Our:
FREE DropShipping Webinar on “How to Build a Profitable Drop Shipping Business WITHOUT any hassle”:
Form Coming Soon…
Please fill your eMail Address in the form given above
and Press the “Subscribe” Button now.
Drop-Shipping Business on Automation
There are groups / companies like: The Breed Business that offers 100% support. Plus, wide range of UNIQUE Products. The only thing you need to do is to: “Create an Amazon Seller Account” and after that just RELAX.
All the operation like: finding products and wholesalers, listing the products on Amazon, shipping and tracking the shipment will be managed by The Breed Business InHouse-Support..
Visit the official business page at => The Breed Business
Click on the below given THE BREED BUSINESS Logo
You can also read more about DROPSHIPPING BUSINESS MODEL on: