Recently, dropshipping has been quite popular as a type of business that needs fewer investments. Dropshipping is a sales system that delivers for the direct transfer of goods from a supplier to a primary buyer. But does dropshipping actually work in 2020?
Many entrepreneurs willingly to do something as intermediaries for dropshipping can find success. These entrepreneurs find a customer, place an order, and pass that on to the seller, who is already involved in sending items.
Consider the system by example.
After an agreement with the manufacturer of, say, children’s clothing, you create an internet site or a page on social support systems, upload an image of the item, its description and price. In the function of an order, you obtain payment from the buyer; send the agreed amount to the supplier, who in turn, sends items according to the data you specified (on your behalf).
To get going, find the manufacturer, supplier, drop shipper, and create an internet site (group in social networks) with an offer to purchase something.
Dropshipping is a relatively new business scheme. It gained distribution in the early 2000s when a problematic situation arose because a lot of the goods were produced abroad, and had to wait a long time until they reached the maker and the intermediary seller.
After the crisis of 2008, the leading role in world production passed to China. It was then that a lot of entrepreneurs begun to engage with suppliers actively and negotiate the delivery of goods for their customers.
Currently, it’s not at all required to work directly with the supplier, you need to use specific web sites (trading platforms) where different manufacturers operate.
I recently had a chance to meet Shubham, who’s running multiple dropshipping stores and is generating a respectable amount of money. I had a quick conversation with him regarding his thoughts on why the majority of people are failing with dropshipping.
Let’s have a look at what Shubham had to express.
What will be the Pros of Dropshipping?
“I chose to do on line sales when I dropped my college in 2014. As for me personally, this is mostly of the options that have been left. Initially, with a small amount, I purchased some of the goods in China to start my store (or rather, the Instagram page).
The available amount was enough to purchase 15 items (4 sizes each), part of the budget had to be left for advertising.
However, this type of quantity of goods was not enough to at the least advertise on Instagram. After all, an individual visiting a typical page should see an excellent assortment to subscribe or purchase something.
As a result, I began to seek out drop shippers actively. After a couple of days, I came across a wholesale supplier of clothing for children from Turkey, the price tag on which was acceptable to me even without a discount.
After a while, I came across a domestic manufacturer of goods for children and lots of other suppliers focused on goods from China and Turkey.” said Shubham.
Using the business enterprise system of dropshipping has several distinct advantages.
- Minimum investment. High financial costs are not required; you just need certainly to spend money on promoting goods.
- The ability to try out different suppliers and services and products. Because you don’t need to buy services and products, you can offer different types of goods. For example, if you sell children’s clothing, you can simultaneously sell overalls from one manufacturer and shoes from still another. You can offer an extensive range in your web store through cooperation with different suppliers.
- No need certainly to look for a room for a warehouse. And also be worried about the fact that items “do not lie down,” because you do not purchase products and don’t store them.
- You don’t resolve shipping issues. Thus, you do not need to fund courier services or deliver goods to the postoffice; all this is performed for you.
- The price of the goods is decided only by you. The supplier sets a specific cost per unit of output, and how big the margin is your decision. You can study competitors and set a price which will be more attractive to a potential buyer.
- Work takes place by having an existing product catalog. There is no need certainly to invent any such thing new; the supplier gives you photos of the goods and a detailed description, it remains only to upload information to the trying to sell page.
- Almost all drop shipping manufacturers provide get back and exchange services. If you choose the best supplier, you won’t need certainly to worry that the customer won’t be able to exchange goods that did not suit him.
- Working on the dropshipping system, you will be able to quickly form a customer base than in the event that you were involved in promoting products that you produce yourself. This is because you are able to devote more hours to advertising the product, and never engage in its production, packaging and delivery.
- The Dropshipping system may bring a good income and become a fantastic method of earning.
How do People Fail with Dropshipping?
“There is no business without cons, and dropshipping has a lot of them,” said Shubham. He added, “I see a million dropshipping stores these days, out of which only 0.01% has chances of success.” Please take a look at these suggestions.
The quality of the photo.
The very first minus that I wish to describe pertains to the quality of the photo. As you know, on Instagram, it is crucial to include high-quality and beautiful photos.
Taking a photo by yourself may not often be the best idea. Some pictures may be determined by you — other photos will depend on the supplier. When the supplier provides quality photo content, how lucky for you.
For example, one manufacturer provided me with a hyperlink to a google-disk with detailed photos of the item from a few angles, of made in good lighting.
At the same time, he’s his store, where that he publishes the exact same product but uses a more decorated (with the decor in the background).
Other suppliers provide one photo (not always of good quality) of items. But worse, when a wholesale supplier of products from Turkey, has a photo by themselves, in terrible lighting and against an unattractive back ground — it’s not so good. Such photographic works don’t carry any aesthetic appeal, even if the standard is at “5.”
Here is one picture from the dropshipper plus one that I took for my online shop. Which photo would you rather deal with as a consumer?
Few people ship in special packaging. When I purchased goods in China, I realized that cellophane reduces the attractiveness of goods by 50%, so I ordered craft packaging and stickers that said, “Thank you.”
The price of packaging for just one product was only $ 0.2- $ 0.3, but it really made the looks more appealing.
Working on dropshipping, you can’t count on an attractive supply of packaging.
It is crucial for the buyer that the goods be sent at the earliest opportunity after the order. I ship my services and products on your day of order, which is an edge of my store.
When dealing with dropshipping, if the supplier has a large volume, it takes 2-5 days to hold back for delivery. I had one drop shipper, which sent goods once every three days, never gave tracking numbers, and very rarely answered questions regarding the dimensional grid and measurements of the products.
Your clients, clients and buyers — at the same time — hope for a fast and reliable answer.
When you purchase clothes, particularly for children, on the Internet, it is essential to know not just the size but also the measurements in cm, considering that the dimensional grid of manufacturers often varies.
A quick hint — Turkish things are too small, and China has its measuring system, which can differ significantly from manufacturer to a different. The same goes for colors. Provide ways to describe the right color to your customers.
Dropshippers rarely take measurements in cm. Most buyers I cope with provide measurements on demand. But the thing is that it sometimes takes half a day to wait for these measurements (there was a case when I waited for three days!). During this time around, the buyer will discover a seller who will respond faster.
You can’t ever be sure of the quality of items.
A customer will say, “Tell me honestly; will I be disappointed in quality?”
And you, at your peril and risk, answer that the product is of high quality. Do maybe not answer in this way. You cannot vet another person’s quality. Giving an opinion on quality is probably the biggest minus that can affect your reputation.
Dropshipping has both advantages and disadvantages. Each entrepreneur must independently decide if to work with dropshipping suppliers. To get a good income, it requires not really a great desire but also sufficient time.
To be a good entrepreneur and drop shipper — you need to know that a large amount of effort is required. As with any business — only the best amount of effort will give you the business enterprise results you might be working for.
The dropshipping method of earning is suitable for everybody ready to start their own business, engage in its active promotion, and revel in the trying to sell.
At the same time be equipped for the fact that it will not work to earn a million in one day. Even those who don’t have a minimum starting capital may do dropshipping because it is just a way of working that does not require significant expenses.
If you can find your niche, choose the best product on the market, and negotiate with reliable suppliers, you are able to succeed in dropshipping.