Ever since shark tank made its entry in India, don’t we all just want to become entrepreneurs and are practicing pitching ideas in front of the mirror when no one’s watching? :p
As enticing as the idea may sound, the thought only ever exists for laughs and jokes because ‘business and all’ sounds like such a far-off reality, no? especially when you’re still a teen. But what if we tell you that you, yes, YOU can start a business and become a business owner as early as right now and as easy as in – steps? No, we ain’t kidding at all, though still if you find it hard to believe and well, a hard pass, read through!
Introducing to you, Dropshipping Business.
- What is Dropshipping?
- Why get into Dropshipping?
- The Good & The Eh (Pros & Cons of dropshipping)
- How does Dropshipping work?
- The Mechanism & Execution of operation
- Where to get started at?
- The Best Platforms to start Dropshipping
What is Dropshipping?
Imagine running a business without actually having your offerings a.k.a. the products in your hands, like ever. Sounds strange right? That’s dropshipping, and actually quite amazing.
So, a unique kind of business model, Dropshipping is what makes e-commerce retail possible without acquiring, holding, stocking, or shipping of the product offerings. It revolves around the concept of ‘Outsourcing’, where all the processes involved in making the product reach the customer are performed or outsourced by a third individual —the supplier.
While that’s pretty much the core of it, let’s walk you through the logistics or the fundamental process of it—
- So, the seller offers whatever wide range of products it does at its online store, where the consumer basically makes the purchase.
- Since the seller does not hold an inventory of products, they reach out to the third party – their supplier or better called ‘dropshipper’ and simply forwards the order request.
- The dropshipper then directly ships the goods to the consumer. They perform the middle functions such as packing, shipping, delivering, etc. which otherwise are upon the shoulders of the seller.
Here, hence, the seller merchant never really gets a physical hold on its own products that they’re selling.
Dropshipping vs Standard Retail Business
The difference as understood remains this same lil primary thing –seller having/holding the inventory. In one, one does, in another, they don’t.
Why get into Dropshipping?
Pros of dropshipping:
There’s a pool of benefits that a successful dropshipping business has to offer to you. It makes for a relatively convenient way into the business world, here’s why—
- Establishing a profitable business this way comes convenient in terms of the startup costs. Wannabe entrepreneur can get their feet into the game while going easy on the investment and costs of actually setting up a vast physical space for making the products, handling the stock, shipping, etc.
- While we’re touching costs, dropshipping also requires low ongoing costs. What are these? You may identify them as operating costs or expenses, these are simply the secondary costs incurred in business that don’t come from producing the product offering. Instead rent or office supplies, or cost of maintenance of the machinery, storage facility, shipping costs, etc.
- Another key advantage that comes is the variety in the product category that you as a retailer get to offer to and attract your potential customers. Again, owing to the no requirement of worrying about the stock, you enjoy displaying an array of offerings, all up-to-the-date and in tune with the trends.
- Since your inventory is completely out of your picture, the responsibilities and risks of actually storing, holding, and managing it safely don’t fall on you. Additionally, since you function according to the demand, as in — only pass the order request after the customer has made a purchase, you are also able to dodge the consequences of over-stocking.
- A business model such as dropshipping enables a greater degree of freedom, versatility, and flexibility when it comes to the channels of selling to reach your customer base. A personal e-commerce website/domain, social media platforms, or online store? Bring it on!
- As a true-blue modern-day biz model, dropshipping is work-from-anywhere friendly and doesn’t capture you in any walls or boundaries.
Cons of Dropshipping
Everything has its share of cons and dropshipping is no exception. Though the biz model is a fantastic pick for all, especially if you’re starting young as a teen, here is some stuff you must be aware of and/or could try to overcome—
- While not having to worry about the inventory is a great plus, it’s only a part. What if you do want to meddle in between, say when it comes to shipping or making it more cost-effective? Um can’t, in business models as such where there exists huge dependency on the third party, there is little to no control over the supplier, the inventory stock, or the functions surrounding it—basically the entire supply chain. So, no authority there.
- “No risk, no gain” ever heard of that? It’s a pretty common dialogue in the biz world. In the case of dropshipping, considering there is minimal investment and risks, as a result, the gains and margins are low too. The implied impact of this is that there remain bleak possibilities of funding marketing tactics such as marketing strategies: affiliate marketing, digital/online marketing, search engine marketing, Google Ads, and more.
- Next, competition, oh boy. Given that stepping into the dropshipping model is cheaper, the crowd going for it is huge, which simply means heightened competition and a hard short to differentiate oneself.
- For any business, the customers are god-like, which makes customer service and customer experience –two extremely essential elements, ‘hearts’ if you please, of the business. Although these two, in this matter, are compromised to an extent. The quality of over-retail experience and post-sales services face confinement as the connection with the customer is interrupted by the intermediator –the supplier. For the consumers, this very presence of an anonymous (to them) third party could also be a point of trust-breaking. The product quality also stands to be a matter of doubt.
- Branding takes a hit with this. With a supplier in the middle, that also may be a supplier for others, makes it significantly tougher to gain a competitive edge over the other.
- The heavy reliance could prove to be a big bummer and invite big losses in case of their own mistakes or hampering of the stock, production quality not up-to-the-mark.
The Mechanism & Execution of Dropshipping Business
So this is THE step-by-step guide you need to crack the code to a successful Dropshipping business plan. Tag along!
- Decide on the niche, the market, the audience segment, and the categories you wish to offer. This can be arrived at by market and trends research and analysis.
- Find a good, and reliable supplier who can be trusted to deliver honestly. Give great and due attention to the contract.
- Set up your own online store or get listed at e-commerce marketplaces such as Shopify, Etsy, etc. Followed by a website communicating the vision, mission, purpose and story, and a lot more.
- List your products on the said online store, followed by getting the store registered.
- Once the set-up is in place, head to getting the word out about your business. You could leverage low-cost options bunch of social media channels, email marketing, mouth marketing, etc.
The Best Platforms to start Dropshipping
POV: you’re all through with dropshipping, and down to get into it, here is the list you are looking for –here’s where you can get started:
One of the most opportune ideas for teens to get into the ground of online business, and not just that a successful business, Dropshipping is THE one. It could help you understand the business concept and business plan big time as well as give you a window to explore the prospects of being an entrepreneur in the future.