WHAT IS DROPSHIPPING

 WHAT IS DROPSHIPPING ?

Drop-shipping is a type of business model, which is a part of e-commerce, where the retailer can sell products on his own online store to customers but without keeping product inventory or manufacturing.

Instead, they finds and partner up a supplier of that product which manufactures it, packages it, stores it in their warehouses and whenever the retailer gets orders from customers he contacts with the supplier which he/she partner up with and gives order requirement after the manufacturer directly ships the product to customer because of the customer details provided by retailer In this drop shipper makes profit .

This is a very famous kind of business today because of less investment needed in both starting up and running operations in business. That’s How to start a drop-shipping business.

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HISTORY OF DROP SHIPPING 

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HOW DOES DROP SHIPPING WORKS ? 

Exactly, the drop shipping business model works as it enables you to sell the products to customers without having inventory of product . This is like reselling but it doesn’t requires inventory management, product development and even shipping package on behalf of  you  the supplier/manufacturer with who you are partner up ships the product directly to the customer that means no worry of inventory, packaging, or shipping the product to customer for these we partner up with third parties who take care of it.

This process saves entrepreneur’s time and then he/she can focus on building business or a brand instead of daily business operations like packaging , shipping etc. and you can focus on making more sales by marketing the brand. These are Benefits of drop shipping.

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WHO ARE KEY PLAYERS IN DROP SHIPPING 

In drop shipping business model their are mainly four key players which are involved :- 

1. The Product Manufacturers : The manufacturer is a businessman, who produces products for selling them to the retailer/drop shipper.

2.  The drop shipping supplier : These are generally wholesalers why buy products from manufacturers and then sells to drop shipper(Retailer).

3. The Retailer : Drop shipper/retailer/you makes an online store and gets orders from customers  then retailer pays to suppliers and also send them customer order for shipping. They are responsible for packaging, shipping of that order to customer.

4. The Customer : This is drop shipper’s responsibility that customer receives order on time with no service problem and customer stays satisfied from your service.

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WHAT ARE BENEFITS OF DROP SHIPPING?

This offers many benefits to manufacturers as well as consumers:-

1.  Access to Global Market : By the help of Drop shipping producers can sell their products world-wide. Which increase growth and sales of the business.
2. Lesser Operational cost : In this process a consumer directly meet with the manufacturers By this the extra cost(commissions , more  freight, cuts) reduces because no middlemen interference. 

3. Evergreen Demand : Drop shippers generally generates consistent orders because of global reach & marketing. It helps manufacturers to predict production because of regular orders.
4. Reduces Inventory Risks : In traditional Business they sometimes faces unsold inventory but in drop shipping you don’t have to fear about it because of consistent sales and pre determined production.
5. Requires Lesser Cost : Many drop shipping stores are operating from houses and doesn’t require huge inventory investment , it only costs a laptop.
6. Wide Variety Availability : Generally drop shippers offers a wide range of trending products to consumers at their online stores, and traditional businesses doesn’t provide it neither variety nor trendy at same time.
7. Location Doesn’t Matters : A drop shipping business can be run from home with a laptop, connected with internet connection. It gives full flexibility to drop shipper for physical location setup.
8. No Product Development Needed : There is no need to drop shipper for investing in product development because he instead can procure it from another manufacturer .
9. More time for expanding business : when you are not managing product manufacturing, packaging, shipping so there is more time for you for taking business decisions ,making strategies, marketing etc.
10. Test New Products With Zero Risk : When a drop shipper runs his own drop shipping store he/she can add new products to their site by listing them , this doesn’t involve any expense. For checking New products/arrivals drop shipping is best.

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WHAT ARE CHALLENGES IN DROPSHIPPING BUSINESS ?

Challenges in Drop Shipping Business ➖

1.   Lower Profit Margins ➖  Drop shipping  have lesser margins of profit Because the drop shipper is always rely on the supplier for products which includes the cost and they are Resellers so they have a margin/commission , On that orders as their earnings.
2.  Always Supplier Reliability ➖ If supplier makes any delay in shipping of product , supplying bad grade products this may make your business reliable on resellers. Which further makes problems and affect the online store .
3. Shipping Problems ➖ Delays in product delivery leads higher shipping costs can lead to customer’s dissatisfaction because of delay and more cost. Sometimes it takes serious issues for international customers. Customer can make you responsible for delays in shipping of product because of suppliers delay.

4. Out of stock inventory ➖ You are a drop shipper completely dependent on supplier/wholesaler. Sometimes, they can not provide you products because of stock shortages etc. then you face challenge in order to complete demand.
5. Drop shipping increases product price ➖ Suppliers/wholesalers sell their products in bulk quantities and on them they can give you discounts which now, you can’t because you are ordering not in bulk. 

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IS DROPSHIPPING REALLY WORTH IT ?

Dropshipping having many challenges but yes, it can be profitable business. You know How Dropshipping Works , Its Benefits and Challenges. Now, Dropshipping is a low risk business model compared to traditional manufacturers and even wholesalers . 

Since, Supplier is handling the product inventory, packaging and shipping then you can focus on your business marketing and customer service. This offers Dropshipper many benefits like Easy to setup, Scalability of business . But make sure you selected the right niche of product, and partner up with reliable suppliers/wholesalers for better working.

As it is a part of E-commerce it deals with the world wide customers so converting leads into orders will be good . By following marketing strategies like advertisements , Seo can rank you and built your business a brand.

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HOW TO SCALE YOUR DROPSHIPPING BUSINESS ?

In order to scale your drop shipping business now you know how to start drop shipping , it’s benefits ,it’s challenges, and many more now we have to scale our online store,

There are many key strategies to upscale your drop shipping business :

1. Product selection by optimization : In order to upscale your drop shipping business first identify products which having a consistent demand and trending among youth also ensure high profit margins are their . By using Tools like Google trends, google ads etc. or platforms like amazon to find out what is in trend now. And make your products range by keeping in mind customer taste & preferences and demand for that product, which you have to refresh according to market trends.
2. Focus on Building a Brand : People think drop shipping is only selling of products but the products are also available for your competitors, In this branding can make a difference of out of the box. By building a distinct identity of your brand among audience by using your own logo on products, custom packaging, with a message. This likely make customer more excited to buy from your store but the product is same as competitors offering same product.

more points

1. Invest in Marketing : In order to scale your drop shipping store you have attract more customers but how can we do it ? the answer is by digital advertisements in platforms like Facebook, google ads etc. by this you can get higher customer conversions which lead to ultimate scaling of your business. You can collaborate with a social influencers which are effective according to your product niche which will gather a huge traffic of visitors to your website.
2. Use of Sales Techniques : If you want to scale your Drop shipping store, you have to increase your per order value/average order value by these techniques:

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Techniques you can try ➖

Up-selling : Always recommend a premium version of the products in first, this will make customer likely to focus on high quality, premium Ness of your products and maybe they could by it by forgetting their budget Or increase there budget.

Cross-selling : By offering customer complementary products which can attract their focus on the products which you are showcasing them as complementary or providing checkout pages.

Giving Bulk Discount : By providing big discounts on bundle purchases this can encourage your customer to buy in bulk for getting a huge discount can improve your business sales.

5. Focus On Customer Retention : This means, Acquiring new customers every time is very expensive but retaining the old customers can make you a loyal audience.

Customer Retention Strategies ➖
Email Marketing : You can send personalized emails to your customers for like thankyou note, new offers, upcoming sales etc. this ensures a personal touch with your customer that make customer to feel connected.

Loyalty Programs/Events : You can give some reward or discount to customer who are repeated. This will encourage them for shop again.

Excellent Customer Service : Some of your customers may have feel dissatisfied and may address complaints so you can provide them customer support which solve their problems.

Marketing & Branding : As you know Marketing and branding of your brand will make you distinct from your competitors . By this you can retain customers which see your ads, on platforms like Facebook etc.