dropshipping
Business,  IDEA

What is Dropshipping? Learn how to create a cheap online store

Creating a cheap online store is not difficult. Even so, as there are many variables to consider. In this post, we’ll tell you each one of the points that you will have to value for if you start in this of the dropshipping, do not have problems and you can earn money from the beginning.

What is dropshipping?

What is dropshipping

 

The dropshipping is what you are looking for if you need to create a cheap online store. This business model is based on a logistics management system by which you offer products in your store without having them in stock. In colloquial terms, it is the so-called commission agent. You sell the products of your suppliers in your online store, which will have no stock and you only worry about getting sales. Therefore, it can be said that the figure of the retailer and owner of the e-commerce plays a role of mere intermediary.

Some benefits are:

These cheap online stores require much less investment compared to a physical one.

You will not have to think about any logistics or distribution aspect when creating your online store.

Your provider (drop shipper) will directly send orders to your customers.

Many less fixed expenses and less work than in a physical store or other models of online stores.
And many more advantages that I will tell you next.

Logistics is usually one of the parts where you think least when creating an online store. It is one of the most important parts to take into account due to its difficulty and expenses derived from it. Therefore, if you are considering undertaking a digital environment and setting up a cheap online store, the dropshipping model is a good option to get rid of the headaches of the logistics system. Instead, you must have firm agreements achieved through negotiations with the wholesale drop shipper that meet the conditions established for that logistics. The supplier must scrupulously comply with the agreement so as not to damage the reputation and good work of the online store. So, is it interesting that we can delegate it?

Let’s see more about why drop shipping is a very good option and how not to make mistakes when choosing and managing your suppliers correctly.

purchase process

How does the purchase process work in an online drop shipping store?

The process of buying or selling begins when a customer purchases the e-commerce portal of the dropshipping company. The retailer that owns the store manages the collection and passes the order to the drop shipping provider. This is the one that performs the preparation of the products with the distinctive signs of the retailer and deals with the shipment of the package directly to the customer. It’s that simple for the owner of the cheap online store to operate in the digital market.

Why choose the dropshipping to create your cheap online store?

why dropshipping

The 3 biggest reasons why drop shipping is such an interesting business model are:

Low investment:

It requires little investment and less risk than any physical store. You do not have to face certain types of expenses such as storage or distribution.

Scalability of the business:

You can sell anywhere in the world. Nowadays the digital environment has no limits, so there are no borders or horizons that limit your range of action in the market. The character of this cheap online store allows you to increase profits without having to reinvest part of them in the business.

Work centralization:

In this case, your job is only to sell the products, delegating the rest to other professionals. The tasks and time consumed are very small, so the dedication demanded by the cheap online store is not excessive, but we must bear in mind that, for the client, we are solely responsible for the entire process.

If you are still interested, below you will find all the advantages and disadvantages of dropshipping.create store drop shipping

Why do many online stores fail with dropshipping?

Reason of Failure

The reasons are many, but in my experience, failures usually come for 2 reasons:

The absence of previous market analysis: That usually is not done, because as it is a “cheap” investment, you allow yourself the luxury of taking risks. It is a fatal mistake since the choice of the niche to which to go is essentially what will mark the success of the drop shipping shop. You have to look for one that does not have a satisfied demand at all, with little competition not to drown. The price of the products in the niche will also be handy to get the entrepreneur idea of whether it is appropriate or not. In the dropshipping model, you work with a margin on the price of the supplier, so it may not compensate us for the chosen product.

Lack of strategy and action plan: Failure to carry out the previous analysis has led to a lack of strategy since the beginning. You must have a roadmap to follow for the proper functioning of the dropshipping model. If you do not know how you are going to manage everything, how are you going to get traffic? What are your goals? Are they reasonable? Where is your target audience? How are you going to act in the face of an online reputation crisis? ? , etc. What happens next is that you have the store and you do not know what to do with it.

In this post what I wanted to talk about is how to create a cheap online store. Not cheap in itself as a design (because there are already companies that offer pages of 100 dollars that only serve to throw money. An inexpensive store in the sense of saving at all possible costs and being able to go to market with a few conditions acceptable

This is nothing new as you will see. This business model called dropshipping is very suitable if what you do not want is to set up an online store and have to think about manufacturing, management, distribution or storage of products. How? Very easy.

How to make a cheap online store with Dropshipping

online store with Dropshipping

The next section is probably the most important because if you do not see yourself qualified to perform the following tasks or are mostly unaware of them, it is best to make sure you can carry them out before starting the project to ensure success.

If you need a budget to increase your web traffic or optimize the purchase process, do not hesitate to contact us without obligation.

Functions

This business model is very fashionable because it makes companies focus on fewer things, being more competitive in general. If you are determined to start with this business model your main tasks will be:

Attract quality traffic to your store (natural and paid positioning, advertising, email marketing, etc.). This is paramount, as the basis of any business, if there are no customers, there are no sales, so the actions to get web traffic They are essential to the success of the drop shipping portal.

online store with Dropshipping

Optimize design and purchase process. The design of the website must be very careful and focused on benefiting the user experience. Access to the catalog or shopping cart must be achieved through clear and simple actions. The aim is to facilitate navigation throughout the web so that the purchase process is as simple as possible and the users are not hindered in doing what they want.

Create purchase motivations on your website. This is achieved by offering discounts, promotional actions for a limited time that impel them to buy at that particular moment or offer a wider range of services such as guarantees or facilities for the return.

Loyalty to the customer

Give a good after-sales service. The attention of the client at the moment after the realization of the purchase in the e-commerce dropshipping is fundamental and contributes to the loyalty of the same. It is a matter of showing interest in how the purchase process has gone, how much the experience values. It is highly recommended in this model of the cheap online store since the only contact with the customer that you have is by the drop shipper provider, and it is convenient to know how you have made the delivery regarding terms, mode, and conditions. Simply with an email or a brief call to collect the customer feedback, you will get valuable information for the business and the customer will love knowing that you are taken into account, that is considered key in e-commerce.

The functions of drop shipper would be the following:

Collection of the order form.

Comply with the LOPD, respecting customer data and not “bridging” by contacting directly with the final consumer.

Respect the confidentiality and commercial collaboration clause.

Shipment of merchandise in the name of the retailer or anonymously to the final consumer.

Respect agreed on conditions such as delivery times, return policy, the scope of distribution, shipping costs or other possible expenses.

Prepare the invoice for the product instead of the retailer if it is agreed in this way (which I do not recommend).
Take care of possible product returns.

It is very important to establish each point of the contract with your suppliers so as not to give rise to confusion or misunderstanding.

How to get drop shipping suppliers?

drop shipping suppliers

The choice of drop shippers providers is essential for the proper functioning of this business model. The figure of the supplier must generate the maximum confidence since in his hands will be the image and reputation of the cheap online store.

The choice of the supplier should not be made lightly; you have to negotiate with him different aspects that will make up the dropshipping e-commerce service. Such as the delivery times, the type of packaging, the possible invoice issuance, the commitment not to use the data of the client for his benefit. The management of the reverse logistics in case of returns and ensure the degree of seriousness of the drop shipper since it is largely the one that projects the image of the drop shipping online store.

It would be ideal to have several drop shippers providers not to play all the same letter; this makes it possible to avoid problems in case the only provider that has had problems of documentation at the customs or shortage problems, for example.

drop shipping suppliers

Well, this is not simple but let’s say that there are 6 possibilities when we consider getting suppliers or wholesalers for our dropshipping store :

Current drop shippers:

Search suppliers among wholesale companies on the internet that offer this service. I leave you a list and a specialized website in which you will find many suppliers.

Contact manufacturers:

Get in touch with manufacturers and wholesalers and ask them if they are interested in you selling their products.

Copy to your competition:

If you do not decide or you do not find any supplier that convinces you, make an order to the competition and try to find out the supplier looking for the return address in the order box.

Assistance to fairs and events in the sector:

This will allow you to get in touch with the main manufacturers and wholesalers of the niche in question. If you have time and money you should attend because it will open doors to meet interesting people and give you ideas.

Business directories:

You can pay some directory for a database organized by niches. It is convenient when you need to search quickly and get ideas for products to sell or niches. This has its drawback is that some are not very reliable because there will be sponsored companies, and perhaps these are not your best drop shipper.

Through multinationals:

Make dropshipping through recognized retail multinationals such as eBay or Amazon although your profit margins will be much lower, this type of product provider is always reliable and meets quality standards and delivery time that will not leave you bad with your customers.

How to know if they are the trustworthy suppliers?

trustworthy suppliers

To know if they are the trustworthy providers we will have to pay attention to the following characteristics. If you meet them, it is a potential supplier for your drop shipping online store :

Experienced staff and expertise: The best drop shippers always have well-trained and knowledgeable sales representatives from both the industry and their product lines. Being able to talk to a salesperson and answering all your questions is priceless, especially if the sector is not particularly familiar to you. They will show their professionalism with this type of drop shipping business through the advice that will allow you to get started when you start in this field.

Technological: A good drop shipper must be technological, both at the website level and internally. This will ensure faster order processing, data loading, and agility of operations in general. It is about being able to establish a fluid communication that does not suppose problems in the development of the business.

Good geographical situation: A good drop shipper should be relatively close to your sales area to ensure deliveries in a shorter time. With the economic crisis, many businesses have reinvented themselves expanding business lines; you may find drop shipping providers closer than you think.

Good customer service: The drop shippers must assign a salesperson with whom you will have a direct deal, and you will normally solve your problems.

Organization and efficiency: A good organization is noticed when the supplier does not fail in their orders, nor are there delays or deficiencies in these. The trouble is that it is difficult to know without having tried it before.

Possibilities to make your online store

Possibilities of dropshipping

Once you have clear the above points and know what you want to sell, what your suppliers are, what conditions you have and what your margins are, then it is time to consider the creation of the online store itself. There are 3 possibilities when creating your online store. These alternatives are:

Web design company: Contact a web design company to create your online store. The most advisable option to avoid headaches. The web will comply with the necessary characteristics for the correct development of the business and will be optimized regarding user experience.

What do your drop shippers believe: Contact drop shippers who create the online store for you to sell their products. This option is not recommended, since you usually have to pay a monthly price, regardless of the sales made. The catalog that is offered in the e-commerce portal is determined by the drop shipper, without which you can choose according to your criteria. Also, the pages they make for these cheap online drop shipping model stores are not optimized under SEO criteria, so it will cost a lot to get web traffic that generates sales.

Benefits of dropshipping in an e-commerce

Benefits

There are also drawbacks, but there are many more advantages when creating a “cheap” store. Here I leave it to you so you can evaluate yourself and values the option to assemble your dropshipping e-commerce:

Reduction of economic risk

Of course, this is one of the most important points. If you decide to create an online store and you are going to do drop shipping, you will save a lot of money in structure, purchase of stock, distribution, and management. For something, we call it in this post “The cheap online store. “

Few fixed costs

An inexpensive investment with initial and fixed expenses ridiculous. Having only to pay domain, hosting and maintenance of the website (in addition to what you pay to be autonomous or company) your fixed costs are reduced to less than € 50 per month. As almost all variable expenses, as you grow, these will increase. Yes, I would estimate a spending item to get quality traffic because if no one comes in for very little fixed costs, you will not get any benefit.

A greater product catalog

Another advantage is to have a greater catalog of products to be able not only to sell the products of a supplier but also to combine in your offer products of two or more suppliers being able to add and remove them to your liking. This will make you have a dropshipping service catalog according to your target audience

Without investment in the stock

When we talk about a physical store, one of its biggest expenses is the supply. When we talk about dropshipping, do not create a cheap online store, you create a hyper low-cost online store. No need to borrow or advance any money to suppliers to buy the stock that will be retained in a warehouse until its sale. When you place the order in my store, I ask in turn to my provider. Selling merchandise from a third party as an intermediary is easy and hassle-free.

Without shipment management

The preparation of the orders and the fulfillment of the deadlines was always a headache. With this type of business, you no longer have to manage the shipping of each order, let alone negotiate with the transport companies. Being your provider who does it, not only takes away work but having more bargaining power, you will get much better prices than if you did it on your own.

You do not need a warehouse

You do not need a warehouse because your supplier will be in charge of storing and managing all the merchandise. Having no stock, you save this type of facility.

No storage costs

Not only do you not need a warehouse, but you also save all the storage and logistics expenses that would be incurred. It prevents you from planning inputs and outputs, personnel management, purchase of machinery, organization, etc.

Seasonality of the product/service

You will not have to take into account the seasonality of your products because simply by removing them from the online store and adding others you will have the problem solved without the need to sell or sell off-season offers.

Business relocation

You can sell where your suppliers sell. By not having a physical store your customers are where your traffic is. Simply knowing that your provider serves a certain geographical area, you can start looking for customers in that area.

Scalability and easy growth

You can grow as much as you want since there is no limit to your online store. The more people you sell, the more, without increasing your fixed expenses by one dollar.

Disadvantages of dropshipping

Disadvantages

And of course, some disadvantage has to have. These are the disadvantages that dropshipping presents.

Market unawareness

The ease of entering markets you do not know because of the large margins they offer can lead to the closing of the store if you do not manage well how to sell the products, customer service, and after-sales service. It requires a previous analysis of the sector and the determination of certain strategies to follow to get the success of the cheap online store.

Loss of control of actions

You lose control over certain processes leaving everything in the hands of your drop shipper, so it is vitally important to choose this for the success of your online store. This means having to collect feedback from the customers of the dropshipping store to evaluate compliance with the stipulations of the drop shipping provider.

Final responsibility

The loss of control does not exempt you from responsibility. Therefore you are the one who will demand responsibility in case of any incident. The fact of knowing that each package you send is going to have to face without knowing what you have sent or trusting how it has arrived sometimes puts you in a delicate position.

Ignorance of the competition

Another drawback is not having assessed the existing race, because when you have thought about doing this, it is possible that many more have done it and also have the same provider. Without differentiation in the products, you will have to offer a very good service and take great care of the design to be able to sell and enter a market in which they have more time than you.

Profit margins

Many times when there is a lot of competition in the sector, and we do not know how to attract traffic to our website, we lower our margins to be more competitive, which reduces profitability significantly.

This can be solved by choosing our market niche correctly and knowing what our customer acquisition strategy will be or doing a good marketing job when creating your brand.

Complexities in the shipments

When working with several drop shippers if you are not well organized you can end up assuming shipping costs that you did not think about or even send similar products without being what the customer requested. With this, you can incur, in addition to higher costs, in non-compliance with delivery times. In addition to that, the client will not understand the reason for receiving two packages from the same drop shipping online store.

Web traffic for e-commerce

traffic for web

Not having thought about how you are going to generate traffic. As we have said before, it is one of the most important issues to obtain benefits. How are we going to bring potential clients to the web?

Natural search engine positioning (SEO): Increasing traffic to your website gradually.

Content Marketing: Generating interesting content to return to your website and subscribe.

Advertising on social networks: You can make the catalog known through influencers, direct messages, promotions publications, payment campaigns …

Offers on social networks: Create offers for our followers on social networks to try our products and start shopping in our store. Twitter can be effective in the growth of the business.

Advertising in Google Adwords: Through videos, banners or text ads in the top positions of searches.

Email marketing: Mailing campaigns from the list of subscribers that we compile with the blog. You can provide related news and personalized promotions based on the purchases made or interests displayed on the web.
generate web traffic

These are some of the methods of attracting traffic that we can use, ideally combining and focusing them according to the product/services we sell, the competition of the sector and our selling price mainly. Even so, each strategy is for each company, and we can not always apply them even if they are in direct competition.

“Never start a project without thinking about how you will capture your clients and if you have the means to do so.”

Recommendations before you start

Choose your drop shipping provider

Analyze their conditions: Delivery terms, return policy, the scope of distribution, shipping costs or other possible expenses.

Analyze your direct competition before starting.

Choose a customer acquisition strategy: The quality and quantity of traffic will determine the success of your e-commerce.

Review the total cost that the project will cost you.

Do not skimp on the design of your online store. This will be the point of contact with your customers and if it is not perfect no one will buy as much as you want.

Make sure you do not leave any loose ends before you start. Take the project as if it were a physical store.

Conclusion about the business model

From the entrepreneur who wants to create your online store, this business model is very valid and quite easy to manage even if you are inexperienced in the online world.

It requires an exhaustive prior analysis to guide the future of the future of the dropshipping business towards success, but the subsequent care is minimal.

If your idea is to build a cheap online store, the dropshipping model is a very good option to start this journey. Once you know how the digital market works and the management of an online store, you can look for other more profitable business models, but in which you take charge of the entire sales process.

In any case, it is always a key point to find a good company to create my online store to advise you in all aspects that may cause a problem, optimizing all costs and helping you on the road especially in your first steps.

Now that you know what Dropshipping is, are you going to create your cheap online store?

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