How e-commerce dropshipping can change your business
Dropshipping allows you to sell products online without having to worry about stock management or shipping logistics. It is a decisive factor that can take your company from zero to one hundred in the shortest possible time.
In this article, we look at the pros and cons of e-commerce dropshipping and show how it can transform your business. We look at the benefits, challenges and strategies for success in this highly competitive industry.
Whether you’re an experienced entrepreneur or just starting out, this guide will give you valuable insights to help you succeed in the world of e-commerce dropshipping. Get ready to revolutionize your business and soar to new heights!
What is dropshipping?
Dropshipping is a business model in e-commerce in which the retailer sells products via a supplier who ships the products directly to the end customer.
The retailer acts as an intermediary between the supplier and the customer and is responsible for sales and customer service aspects.
In contrast to traditional retail, dropshipping eliminates the need to keep products in stock or take care of shipping. This enables entrepreneurs to build up an e-commerce business with less investment and risk.
Dropshipping has revolutionized the way companies sell online and opened up numerous new opportunities for entrepreneurs.
Dropshipping provider
The dropship providers are the suppliers of the products. They produce the goods, store them and dispatch them to the end customer.
All formalities such as the correct packaging with labeling, shipping labels, declaration of the parcels and customs duties are taken care of by the providers.
In general, any company that offers its own products can offer dropshipping. It is worth going to relevant trade fairs and making direct contact with wholesalers.
To get a small impression, here are 14 well-known dropshippers:
Alidropship
Products: Import articles from AliExpress via WordPress plugin.
Printful
Products: Textile printing via print-on-demand.
Bigbuy
Products: Car, baby, electronics, lighting, garden, office and health.
DHgate
Products: Toys, wedding clothes and beauty articles.
Banggood
Products: Toys, hobbies, tools, clothing, home, garden and much more.
Brand distribution
Products: Fashion
CJDropshipping
Products: Watches, clothing, office, bags, sports, electronics and much more.
Cocoon design
Products. Designer furniture
DefShop
Products: Fashion – Streetwear.
Griffati
Products: Fashion
Nordstrom
Products: Shoes, clothing, jewelry.
Printify
Products: Textile printing via print-on-demand.
Shirtigo
Products: Shirt printing via print-on-demand.
Sunrise Wholesale
Products: Jewelry, furniture, sporting goods and garden tools.
Order processing in dropshipping
The suppliers are mainly wholesalers. They automatically retrieve the orders from the store, pick the goods, pack and ship them on behalf of the online retailer.
These wholesalers either operate their own logistics with employees and a fulfillment service, or use external providers.
Process of the business model:
- The wholesaler sends its goods to various warehouses in different cities and countries.
- Several retailers set up their own online store with the products.
- The dealers market and sell the products.
- The online stores are connected to the fulfillment center.
- Incoming orders are automatically transferred from the stores to the fulfillment center and warehouse.
- The retailers receive the money from the customer and pay for the wholesaler’s goods.
- The ordered goods are assembled, packaged and sent to the end customer by a shipping service provider.
- Returns can be sent back directly to the fulfillment center.
- In the case of returns, retailers must reimburse customers immediately and apply to the wholesaler for a refund.
Offer dropshipping as a wholesaler
The dropshipping marketing model offers great advantages not only for newcomers to online business, but also for wholesalers.
Almost every wholesaler can offer the distribution concept without having to take on all the tasks themselves.
What you need to do to offer dropshipping as a wholesaler.
They must draw up a partner contract with rights and obligations as well as a remuneration model for the online retailers.
Above all, define what online retailers are explicitly not allowed to do. This may be, for example, that advertising in the name of the manufacturing company is not permitted or that certain minimum prices must be observed.
Define the products that may be sold. Perhaps they want to offer a separate range for this segment without branding.
Look for a fulfillment service provider who can take over the entire warehousing, connection to the store with automatic order retrieval, packaging, shipping and returns processing with refurbishment.
You should not simply leave returns processing to the online retailers, but manage it yourself.
Look for a software provider for an online store, such as Shopify or JTL. Arrange for the store to be installed automatically and for your products to be imported via CSV.
Start with marketing. Good target groups are trade fairs, video marketing, start-up and dropshipping portals.
Here are 5 well-known dropshipping portals for wholesalers to market their products:
World Wide Brands
Listing of various providers.
WholeSale Central
Supplier directory
Spocket
Marketplace for dropshipping.
Salehoo
Supplier directory
Modalyst
Marketplace for dropshipping.
Dropshipping advantages for e-commerce companies
Dropshipping offers a number of advantages for e-commerce companies. One of the biggest advantages is the ability to build a business without investing heavily in stock.
As the retailer does not need to have the products physically in stock, there is no need to invest capital in the purchase of inventory. This enables entrepreneurs to start with lower financial risks and scale their business more quickly.
Another advantage of dropshipping is its flexibility. As the retailer is not tied to physical stock, they can offer a wide range of products without having to worry about storing or managing inventory.
This allows entrepreneurs to quickly adapt their product range to market demand and take advantage of new trends.
In addition, some dropshipping providers enable global expansion. This allows retailers to sell products worldwide without having to worry about international shipping themselves. This opens up completely new markets and sales potential for e-commerce companies.
Success stories of companies that have used dropshipping.
There are many success stories of companies that have used dropshipping to transform their business.
One well-known example is the company “
Oberlo
“, which has developed a dropshipping app for Shopify. Oberlo enables Shopify users to import and sell products from AliExpress directly in their online stores.
The company has managed to attract millions of users in just a few years and has made a significant contribution to the success of e-commerce dropshipping.
Another example is the company “Fashion Nova“, which specializes in dropshipping and has become one of the best-known e-commerce fashion companies.
Fashion Nova uses dropshipping to offer a wide range of trendy and affordable fashion items and has managed to build a loyal customer community.
These success stories show that dropshipping can be a powerful tool to build a successful e-commerce business.
How can I start a dropshipping business?
Starting a dropshipping business requires thorough planning and preparation. The first step is to find reliable dropshipping suppliers.
It is important to select suppliers with good ratings and a wide range of products. Once you have selected your suppliers, it is important to set up an e-commerce website for your dropshipping business.
You can use platforms such as Shopify, WooCommerce or JTL Shop to create your website and sell products.
The design of your website should be user-friendly and provide a seamless user experience. A clear and appealing product description is also important to attract potential customers.
After your website is set up, you should develop marketing and advertising strategies to promote your dropshipping business. With the right omnichannel strategy, you can sell across multiple multichannel channels and implement targeted remarketing with Google Ads âžš.
This can include the use of social media, influencer marketing, search engine optimization and paid advertising.
After all, it is important to offer efficient customer service and smooth order processing to ensure customer satisfaction.
Overcoming challenges in dropshipping
Although dropshipping offers many advantages, there are also challenges that companies have to overcome.
One of the biggest challenges is the selection of reliable suppliers. It is important to carefully vet suppliers and ensure that they deliver high quality products and meet reliable shipping times.
Another challenge is the competitive landscape in e-commerce. As dropshipping has a low barrier to entry, there are many competitors offering similar products.
To overcome this challenge, it is important to have a unique positioning and a differentiated offering. Good branding and the use of niche markets can help you stand out from the competition.
Finally, customer service is another challenge in dropshipping. It is important to ensure fast response times, clear communication and efficient resolution of customer issues in order to maintain customer satisfaction.
As a retailer, you must pay attention to the legal points in your online store, especially in Germany. There is a lot to consider here, such as the TTDSG Cookie Banner Act. You should consult a lawyer to avoid warnings as far as possible.
How can a dropshipper sell successfully?
Selling on price will not work in most cases. The competition is too high for that.
Today’s classic methods in online business are influencer marketing on LinkedIn, TikTok, YouTube, Pinterest, Instagram and Facebook. This is where products can be presented, tested, explained and help offered to users.
However, the best sellers still have the biggest e-mail lists. In order to build up a large newsletter database, a functioning sales funnel must be established.
If you have a large e-mail list, you can always address your target group directly and will be remembered.
But remember to only send an e-mail if the interested party has expressly agreed to this. Only write if you have relevant information with real added value.
Dropshipping disadvantages for e-commerce companies
Online retailers are dependent on the wholesaler’s products.
There may be quality defects or delivery problems to which the retailer is initially exposed.
The same products are also offered on the market by many other retailers.
If fulfillment does not work properly, it can lead to numerous problems. This can result in orders not being processed, items not being put together correctly or incorrect delivery addresses being selected.
What wholesalers should look out for when dropshipping
Dropshipping is also a good distribution channel for wholesalers. However, a few things should be borne in mind.
Good advance planning is very important. Think about how many products you can produce and deliver to the warehouse in what time frame?
Which countries would you like to sell to? Who can become your partner as a retailer?
Create quality criteria that retailers must fulfill in order to build a high-quality sales organization. It is better to use fewer dealers who sell a lot. This keeps competition between retailers within limits.
Choose a fulfillment service provider that can handle the volume of orders. Discuss the exact processes of the procedure and test it beforehand.
Carry out occasional checks and spot checks with the fulfillment service provider. Agree on a maximum error rate that is linked to the remuneration. Make sure that you have several contact persons in the warehouse with telephone extensions.
Provide documentation that the products are correctly packaged and labeled according to your requirements. That shipping documents such as invoice and delivery bill are enclosed with the parcel.
Only use reliable shipping service providers. They may cost a little more, but the error rate for delivery, damage or theft is often lower.
Automate billing with retailers. Have returns checked to see if they can be resold.
The quality of the products and the smooth running of day-to-day business are important building blocks for establishing sustainable sales as a wholesaler in dropshipping.
Once all the processes are in place, the sales concept can also be set up as affiliate marketing. There are numerous platforms on which manufacturers offer their products and marketers who sell them.
Dropshipping with Subke Fulfillment
We can be the link between the wholesaler, the seller and the shipping department.
For the online retailer, we connect the individual online store, automatically retrieve the orders, compile the goods, pack them and send the parcel to the end customer within Germany, the EU and internationally.
We also accept returns, refurbish them and put them back into storage.
Conclusion: Is dropshipping right for your company?
Overall, dropshipping offers a number of advantages for e-commerce companies.
These include low investment, scalability and global expansion opportunities. It has the potential to take your business from zero to one hundred and enable you to build a successful e-commerce business.
However, there are also challenges that companies have to overcome. These include the selection of reliable suppliers, web-based knowledge for the store, legal hurdles, competition in the market and customer service.
Before you decide on dropshipping, it is important to carry out a thorough market analysis and careful planning.
If you are ready to take on the challenges and implement the right strategies, dropshipping can transform your business and bring you a high level of success.
Take the first step and let your company benefit from the world of e-commerce dropshipping!
