dropshipping Archives - Knowband Blog

With the evolution of modern technologies, eCommerce industry has taken a boon and continuously growing towards success. The endless advantages provided by online trading make it popular among sellers and buyers both. Being a seller, it’s important to understand the increasing demand for handheld technologies and should come up with the latest strategies to serve their customers with an amazing shopping experience. Sellers need to think of selling either by Dropshipping or via an eCommerce Marketplace.

If you have any kind of connection with the retail sector or online businesses then you must be familiar with the terms eCommerce Marketplace and Dropshipping. Many of you might have seen the industry publications, social media ads talking about the benefits of selling on Marketplace or benefits of dropshipping. But how will someone know the exact meaning and difference between these two buzzwords? Well, this article will let you know the answer to the question mentioned above.

Dropshipping:

The practice of Dropshipping is a kind of an eCommerce model which helps an eCommerce store owner to sell products without owning or managing any inventory that means sellers don’t need to invest in acquiring inventory, warehouse or in shipping methods. Dropship model is super beneficial for the startups where they can not invest a huge amount in the initial phase of their business. It let many small business owners earn a good amount of profit in fewer investment.

It is a hassle-free process providing a bundle of advantages due to which it gained popularity in the eCommerce community. Dropshipping lets you free from managing warehouses and inventories. This allows eCommerce store owners to offer a large number of Stock Keeping Units and can even give a try to new vendors for more variety of products. Meanwhile, the retailer can also experiment with new product categories according to the latest trend going in the market. This option is less risky and difficult than a traditional wholesale store.

However, this smart technique needs an eCommerce store owner to remain aware and be smart as it has to be executed with proper technology and diligence. However, the reckless behaviour of retailers can cost them high as they can lose control on the processes like shipping process, data of inventory, product information, etc. This could lead them to severe losses, otherwise dropshipping could be a boon for online businesses.

eCommerce Marketplace:

Selling on an eCommerce Marketplace is always in trend as it helps sellers to gain a huge number of profits. Some of the renowned Marketplaces like Amazon, Etsy, eBay, Walmart, Google Shopping, Newegg etc. provides a recognisable, value traffic platform to many retailers where they can set up their brand shop and sell between millions of customers. Retailers can leverage the well-structured facilities of Marketplace without investing a single penny on the same.

The idea of selling on a Marketplace could be a great deal of profit. Marketplaces like Amazon, Etsy, eBay, Walmart, Google Shopping etc. are doing wonders in terms of business growth. The access to a huge number of audience let sellers earn a huge chunk of profits. Marketplace also helped sellers to provide brand exposure and recognition which makes them trustworthy brand between customers and they can buy products without any inconvenience.

However, there are many marketplaces that deliver goods on the behalf of retailers that means, whenever a buyer buys a product, the store admin and vendors get notified automatically. After this, the Marketplace shipping agent will collect the product directly from the vendor if the retailer has no stock and delivers it to the buyer. This clearly shows that even Marketplace works on the process of dropship when needed.

Dropship Program:

Setting up a Marketplace is definitely not a cup of tea for every retailer. Many retailers who want to increase their trading power online, they go for some dropship programs to expand their product inventories and offerings to generate more sales and revenues.

An excellent example of a dropship program is launched by Crate and Barrel. Their dropship program is all about to market and sells products from different vendors that lie in their product verticals. This strategy helped them to sell a wider range of items with unlimited shelf space.

Over To You

At this point, we have a full-fledged idea about the difference between dropshipping and an eCommerce Marketplace. So, which one is better? Well, there is no single answer as it totally depends on the type of business you wish to pursue from an eCommerce standpoint.

There are many brands which are aiming to access huge no. of audience via a single platform with minimum barriers involved. In this case, they should look forward to shaking hands with some renowned Marketplaces like Etsy, eBay, Amazon, Walmart etc. On the other hand, there are many small business owners who can not afford to invest a huge amount of money on inventory. It’s a good choice for startups to go for dropship model as they can skip the risk of loss in inventory at the initial stage of their business.

There is no full-fledged solution when it comes anything related to online business. So, it’s up to you to choose the best model for your business type as it totally depends on what kind of goods you sell. It’s important to choose wisely as it will help sellers in the overall growth of their business. Regardless of whether you choose the dropship model or an eCommerce Marketplace, it’s important to increase the relevant sales and traffic on your website. So, what are you waiting for, start focusing on your online eCommerce business as soon as possible?

Gaining huge profits was not that easy before. Integrate your eCommerce store with the Marketplaces like Etsy, eBay, Walmart and others in just a few simple steps. KnowBand offers Marketplace Integrators for various CMS platforms like PrestaShop, OpenCart, Magento and Shopify which allows you to present your products among larger audience and encourage the brand awareness as well.

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eCommerce is one of the biggest industries in the world today. Due to its hassle-free usage, many retailers preferred to go online for any business purposes. However, if you are a start-up business owner, it’s difficult for you to invest a huge amount of revenue in the initial phase. As the latest trends of customers keep changing, keeping a huge stock of products could lead to loss of revenues at a high scale.

The latest trend which has taken over the eCommerce industry is dropshipping. This is the most reliable way to overcome the loss of efforts and revenues. Many store owners converted their business to dropshipping business which helped them to improve their overall business growth.

But before we go in detail, let us know the exact meaning of dropshipping:

Drop Shipping is a retail method in which sellers don’t keep products in stock. Instead, sellers come into a partnership with a supplier that stocks its own inventory. Seller transfers customer orders and shipment details to them, and the suppliers ship the order directly to the customer.

This latest trend is a blessing for small business owners who can’t invest much in the initial stage of their startup. Many people wonder how actually dropshipping could be profitable because there are many ways to dropship. Well, there are some ways that work while some don’t.

The Dropship Model:

The Dropshipping Model consists of 4 steps:

Step 1: Seller lists the supplier’s products on your store for customers to buy.

Step 2: The customer purchases something from the seller’s eCommerce store.

Step 3: Seller orders that same exact item that the customer paid for from your supplier.

Step 4: Seller drop shipping supplier ships this item directly to your customer. So, the customer receives the item that they’ve ordered from seller’s website.

Customer’s experience is utmost for a successful eCommerce business and for that it’s really important to choose a right supplier who supplies genuine products to otherwise, customers would not be happy by your product and this would lead to the downfall of your website.

Benefits of Dropshipping in Business:

1. Unlimited Inventory:

The first and utmost benefit of dropshipping is having unlimited virtual stock. Without investing a single penny, you own huge stock of products provided by the supplier. This helps retailers and suppliers to combat inventory distortion and save their revenues from investing in inventory.

2. Increase the lifetime value of customers:

You have the ability to add more and new trending products consistently for your customers. It helps you to keep your existing customers engaged on your website as they would be eager to see some new items acquired by you. It also attracts new visitors who can turn into potential customers. This all can be done without doing any advance investments.

3. No Handling Returns:

Another benefit of dropshipping is not handling any return requests. Sellers don’t even have to deal with the email for return request. If a customer returns an item, it is directly shipped back to the supplier, and according to their policy, they will either ship the replaced product or will give a refund for the product to the customers.

4. Minimize Risk:

In dropshipping, there is no need to invest money for acquiring the whole inventory at a time. This strategy helps to save the revenue of seller if their eCommerce business does not pan out due to any reason. The only money a seller will lose will be the money he paid to get his website started.

The seller’s business will resist to loss of revenue if the taste and trend of a customer change because there is no such thing as excess inventory owned by a seller which clearly minimises the risk of loss of revenues.

5. Lowers cost of products:

Sellers can launch new products at low costs because they are free of any pre-advancements and can be sold at their real cost. This strategy attracts more customers and results in high sales.

The rate of damaged goods during shipment becomes considerably lower when using dropshipping because it reduces the number of times that the product has to change hands.

6. Provides Practicality:

In dropshipping business, there is no need for a storage facility or retail location. You can sell your items just by the website only. Dropshipping helps the seller to offer a wider variety of products which were not possible if he had to buy and store all of the items at his physical store. This practically provides sellers to sell more in less revenue. The seller can also sell products which cannot be stored for a long time like perishable products, food items, medicines, etc.

The Downside of Dropshipping:

While there are millions of buyers and sellers who have had positive experiences with drop shipping strategy, even without even realising it. However, sellers don’t actually have the inventory they’re selling on the premises, this can lead to some major drop shipping problems.

Some of them are:

Sellers are making sales on a virtual inventory as it is not actually available with them.
Delivery times are longer than they would be if the seller had their own inventory and logistics.
Customers get interacted with companies from whom they did not purchase directly at the time of return and exchange processes.
All of these problems can be avoided by drop shipping sellers that work diligently to provide a great customer experience, but there are huge tendencies that can quickly turn shopper experiences bad if sellers don’t energetically work to prevent them.

And last but not the least, there are many conscientious sellers out there, so be ready to get sloppy or cut corners.

Conclusion:

Although the above-mentioned benefits would motivate you to set up a dropshipping business in this competitive industry, the most important factor for an online business is good sales and traffic on the website. Whether you are going for normal business or a dropshipping business, it’s important to convert your website traffic into profitable leads. Customer experience plays a major role in impacting your website sales. Try to keep a check on the genuinity of the products shipped by your supplier to the customers.

It’s important to sell yourself and your online business to the users with your marketing knowledge and strategies and customer service. But it’s also advisable to follow up regularly after the first conversation.

Integrate your eCommerce store with the Marketplaces like Etsy, eBay, Walmart and others in just a few simple steps. KnowBand offers Marketplace Integrators for various CMS platforms like PrestaShop, OpenCart, Magento and Shopify which allows you to present your products among larger audience and encourage the brand awareness as well.

Find out our more articles here:

Tag: dropshipping

Dropship Model vs eCommerce Marketplace