Dropshipping is a business model, where the only part that the intermediary plays is, listing the item on its website. Once you order the item, the seller, that is the person who is physically storing the product that you want to buy, will get it delivered to you. This way, the seller gets his item sold online, through higher visibility, while the online store, gets a commission. The commission is low enough for sellers to consider dropshipping at websites like eBay and AliExpress whereas, once you take into account, the number of products being sold in this manner, the online marketplace is earning quite a bit, by letting sellers take advantage of its platform, to reach out to the larger crowd. However, different marketplaces list down their own set of rules for its sellers. Basically, the seller must get an item, that they list on the intermediary’s website, delivered within a stipulated period of time, once it is ordered. Also, in case that a damaged item is delivered, or the item’s features does not match the online listing, the seller is forced to take the item back. These are some basic rules that most of us know of (such as the eBay guarantee). There are more, but we will not go into the intricate nuances.
The main difference between dropshipping and the usual retail model is that the seller here does not own the inventory. Instead, he buys them from a third party, as and when needed. So for him, the risks are much lower.
Some benefits of Dropshipping
Minimal Start-Up time
There are many humongous problems that plague an e-commerce website. However, with dropshipping, you need not worry about-
- Paying for, and managing a warehouse.
- Keeping a track of inventory
- Packing and shipping.
- Handling returns.
- Managing stock levels.
No need for big starting capital
So you want to open an e-commerce store and get in the game. But you do not have thousands of dollars to back you. All you have is an enthusiastic group and a dream. Buying a warehouse, and getting the entire operations set up, is beyond your limit currently. You cannot stock up inventory. With the dropshipping model, you don’t need all these. All you need is to partner with some local sellers and draw up an agreement to list their products on your beautifully designed website. So you only need to focus on maintaining the business and the website, not the inventory management and so on. And as more products sell, you can slowly decide that which products sell so much, that it would be better if you had a personal inventory of them.
Your overhead expenses can be so low, with this model, that until you see the account-book, you wouldn’t believe it. Many dropshipping websites, actually run their entire business from a home-turned-office, and a bunch of geeks with laptops, at less than a few hundred dollars per month. The expenses will likely increase with time, but will definitely be lesser than the brick-and-mortar stores.
The flexibility of Location
Not located in an industrial capital? Worry not. As long as you have internet and telephone connections and you can communicate with all the people that you are running your business with, you can practically run your business from anywhere in the world.
Wide Array of Products
You need not pay for what you list. In fact, as you grow, you can charge your sellers based on which products they want on your front page. Since there is no need of any pre-purchase, you can display all the products, that your seller-partners have to offer.
Like most businesses, growth is not always a positive scenario. It might be that through word of mouth, your business grows so much, that your number of monthly orders is doubling every month. In this case, a normal business would collapse. Dropshipping websites would not. Since the sellers will be taking care of meeting the excess demands, and you will be benefiting heavily.
How to dropship?
But then, a very similar set of question pop-up. Questions like, where do you get sellers from? Which type of items is selling more these days? Which sellers are trustworthy? For answering these questions, however, you will have to leverage what any other business does- Data. And with this, Promptcloud is your best bet. We will help you scrape web data from different e-commerce platforms that you are interested in so that you can have a list of their seller details. Now with this list in hand, you can contact these sellers one by one, and start your business. To decide, which product types to focus on, Promptcloud can help you get the latest market conditions, and which product groups and items are serving as the crowd pullers. The seller-ratings and feedbacks from different sites will provide you with important information, depending on which you can decide on individual agreements with each seller, based on the risk associated with each. You can decide on margins, commision rates, credit time-period, and more. Sellers, with whom you work for a long time, can decide to pose their own homemade brands at your website and offer you a higher rate of commision on these items, and this way, you could be selling products, that are exclusive.
Gone are the days of yellow-pages. And since you are ‘dropshipping’, I can easily conclude that you are trying to keep costs at the minimum. So a personal data-management and cleaning team is out of the question. With Promptcloud’s expertise, you will not only be getting help with scraping data but also with cleaning data into a structured usable data, as well as advice as to what data to scrape.
Looking to extract data for your dropshipping website?