Most e-commerce beginners tend to kick-start their online stores with a business model called dropshipping. Statistics show that about two billion people make use of dropshipping services globally. Dropshipping is a business method that tends to favor most e-commerce store startups, which explains why many beginners go for it. Stick with me as I’ll be discussing dropshipping and some pitfalls beginners need to watch out for in this field. So stay tuned.
What is Dropshipping?
Dropshipping is an e-commerce type of order fulfillment whereby a seller delivers goods to a customer directly from the supplier without keeping the product in a physical store. When a customer orders a product from your store, you pass it on to the supplier to fulfill the order.
For example, a customer orders a bag from your e-commerce store and makes a payment. Following the customer’s payment, you also pay your supplier for the bag and the shipping cost. After that, it becomes the supplier’s job to deliver the bag to the customer.
When pricing items you dropship from your store, you have to charge more than what your supplier will ask of you for both the item and shipping. So you can get your profit after sorting out the supplier.
The Pitfalls of Dropshipping
In dropshipping, you do not have to bear the risk of keeping inventory at hand or issues regarding shipping. However, despite all the benefits that dropshipping offers, some problems still affect most beginners.
This is a significant issue with dropshipping as the startup cost for this business is low, enticing many people to venture into it. This makes the competition in the business very high as a lot of people are interested in it. So, if you want to beat the competition and make high sales, you have to stand out from your competitors. You can achieve this by offering cheaper products than your competitors.
However, never forget that there might be some companies that beat your price point. A more advisable mode of action would be to create attractive content and designs to run marketing campaigns to educate customers on why they should buy from you.
Because many newbies use dropshipping to run their online stores, scammers tend to disguise themselves as dropshipping suppliers. This makes beginners in dropshipping fall into their traps and hand over payment information to them. They then go ahead and charge these newbies with irrelevant fees like extra shipping or extra product fees.
As a beginner, you can avoid these scammers by asking as many questions as possible to clear up uncertainties. You can also check the supplier’s website to ensure they provide an official contact line and a physical address where you can reach them. If they fail to provide any of this information, it is probably a scam, and you should walk away.
It is always hard to determine the quality of products customers order, as you do not have the product physically. The product quality depends on the supplier. This is why, to be sure of the product quality, you have to be in constant communication with your supplier.
This helps you ask questions about the products, like the material, color, size, etc. It is important to take this aspect seriously as it directly impacts your store’s reputation.
It sometimes seems impossible to keep track of shipping durations as you are not in charge of the shipping process. A lot of unforeseen circumstances can result in shipping delays. But you can stay on top of these situations by requesting tracking proofs from your supplier. These tracking proofs help you ensure the information you provide to customers about their shipping. Alternatively, you can solve issues like this by hiring a dropshipping agent to monitor and oversee the entire process.
Starting an e-commerce store with dropshipping might seem simple. However, if you fail to acknowledge and avoid the risks that come with it, you might have serious problems. It is not all easy, but with every problem, there is a solution. Shoplazza will guide you through the process of using dropshipping as a beginner to start your e-commerce store.
(Contributed by Oluwafemi Adedeji & Hermes Fang)