2020 was certainly an eventful year to say the very least, and with most of the world still in the grip of lockdowns and social restrictions due to the effects of the global pandemic. How we buy and sell online has changed thanks in part to COVID-19 but also due to the rise of dropshipping.
By now your either vaguely familiar with dropshipping or perhaps have come across the term but are not entirely sure as to what it means.
Dropshipping is an e-commerce business model that allows sellers to take orders and send them to a manufacturer or a supplier who now handles order fulfillment on your behalf.
With packaging, shipping and delivery effectively managed by the supplier, sellers can focus on other aspects of their e-commerce business, such as scouting for new products, developing product ideas, conducting market research and providing enhanced customer service.
With the dropshipping industry expected to reach a market valuation of $557.9 billion before 2025, the dropshipping model has proven popular with sellers and e-commerce businesses alike who now utilise dropshipping when running their online operations.
But with 2021 looking set to offer both sellers and consumers more obstacles as coronavirus restrictions continue, what are the realities that those looking to dropship need to face and come to terms with when thinking about dropshipping their online business?
5 hard truths have to know before you start dropshipping
Contrary to popular belief, dropshipping is not a get-rich-quick scheme. On the contrary, those thinking of starting a dropshipping business need to have both the long-term commitment and drive to ensure a successful business. While dropshipping has certainly made it easier for the average person to kick-start an e-commerce trade, approaching it the right way while also realizing that it also comes with problems as well as perks is vital in getting to grips with the realities of the dropshipping model.
- Low-profit margins and a lot of hard work
While not having to manage or store your own inventory is certainly an attractive prospect when deciding whether to dropship or not, one aspect that you should consider is the possibility of low-profit margins. While you do end up investing less money when dropshipping, you should also prepare to receive less money as a result. A low return means a lot of work, and while many business-savvy entrepreneurs will see this as an opportunity, many may be put off by the possibility of having to do a lot of business just to stay afloat, let alone turn a profit.
- Competition is everywhere
With little capital needed to invest in a dropshipping business, it is realistic to expect a low barrier to entry, which means a lot of competition. And while business rivalry should never be something to shy away from, it can be a concern when your business is barely staying afloat and hardly making a dent in profit. With dropshipping being such a popular model, don’t be surprised to discover several competitors selling the same products as you, and worse, at a cheaper rate.
With customers able to buy the same product from a rival store for half the price, knowing how to effectively market your brand is crucial in ensuring its long-term financial success.
- Supply-chain middleman
Dropshippers are at the mercy of their suppliers. If a product is faulty it is down to the supplier to ensure that quality control is effectively managed and improvements are carried out. However, if a customer is not satisfied with a product, it isn’t the supplier who will receive the complaint, but the dropshipper in question that will face the brunt of a bad review.
When faced with a bad review from a faulty product, dropshippers can do little more than hope that the supplier addresses the problems while simultaneously reassuring the customer about something that’s totally out of their control.
This is why dropshippers must have a good relationship with suppliers and be able to have an open dialogue with them when such issues arise (and they will).
- Bad suppliers
Speaking of which, another reason why it is crucial in having a good relationship with your supplier is the issue of potential legal liability issues. While uncommon, with so many suppliers out there to choose from, it is sometimes inevitable that you may come across some who aren’t as legitimate as they claim to be. For instance, you may come across a supplier who illegally uses a trademarked logo or another company’s intellectual property. Not only will this prove a huge (and costly) legal issue, but may also result in your business instantly gaining a bad reputation.
Research your supplier and thoroughly vet their previous contracts to ensure that the goods that you are getting are legitimate and above all else, legal.
Learn more about Dropshipping Agreement Contract and how it can help you avoid any potential legal issues.
- Difficult to build a brand
With so many dropshipping businesses currently in the market, starting from scratch can be difficult. But therein lies the problem, because with so many established brands already successfully trading, knowing how to stand out in such an overcrowded industry can be tough. The fact of the matter is that without customer loyalty, you’ll never get the repeated traffic needed to sustain a profitable dropshipping business.
Having the right approach to dropshipping
While dropshipping certainly has its setbacks, the pros outweigh the cons, and having the right approach to dropshipping will be crucial when setting up your business.
- Market research
According to leading SaaS e-commerce platform, bigcommerce “Dropshipping works better as a means to an end, not the end itself” implying that while dropshipping can indeed be financially beneficial, it should also be used by e-commerce entrepreneurs as a means in trying out new products for market research.
One of the benefits of dropshipping is the freedom it provides in experimenting with different products. By testing out new products during a trial period, users can quickly discover niche products that sell well, while further expanding their range of products without the risk of financial loss or cost of inventory space.
- A backup (just in case)
Inventory costs can be costly and the risk of overstocking on products that may or may not sell can sometimes prove to be too much of a financial risk for many start-ups. However, using a dropshipping supplier can not only save you money without losing sales, but it can prove to be a safeguarded backup in the event of unforeseen circumstances and an effective means to fulfill pre-made orders by dropshipping the products from elsewhere without losing sales and business.
With warehouse and shipping prices differing all over the world, sometimes selling and delivering products to certain parts of the globe may prove to be too costly to earn a profit. With dropshipping, however, the risk of shipping and storage in problematic locations does not occur, meaning that you can test new products in new locales that perhaps you were unable to do before and without the risk of taxes or extra fees.
What are the benefits of dropshipping with MyyShop?
With the pros (and cons) of dropshipping now out in the open, you are probably thinking of what the next step should be?
MyyShop is a leading dropshipping and e-commerce store solution that helps you reach more customers, source more products and make more sales while also addressing difficulties that first-time dropshippers may encounter.
By choosing a Myyshop package that fits your business model, you can start selling products shipped directly from the supplier and straight to your customer, all while saving on shipping and warehousing costs, as well as delivery time and avoiding the hassle of managing your own inventory.
There are many good reasons why any e-commerce retailer should consider dropshipping with MyyShop.
- International dropshpping
- Online website and store creation
- Strict supplier selection
- AI-based product recommendation
- Smart finance
- Local delivery
- Full-channel logistics services
- 24/7 customer support and after-sales services
Open an e-commerce store without the hassle. No inventory, no packaging, no shipping—just sales and tons of profits.
Find out more about MyyShop and how you can kick-start your dropshipping business HERE.
MyyShop dropshipping for beginners: FAQs
1. What is Dropshipping?
Dropshipping is a streamlined form of retail business wherein the seller accepts customer orders but does not keep goods sold in stock. Goods are stored by suppliers who will pack and ship sold items directly to your customer.
2. Is Dropshipping Legal?
Yes, dropshipping is 100% legal. Businesses can build their online store and sell products online. Dropshipping can be done through your website or store through online marketplaces like eBay, Amazon, etc.
3. How Can I Start a Dropshipping Business?
First, you will need to set up your store on Shopify or marketplaces like eBay. Once set up, you will need to select a theme for your store and import products by using MyyShop. You’ll be able to launch your own dropshipping business and start marketing and selling.
4. How Does Dropshipping with MyyShop Work?
Users can import products from MyyShop to your e-commerce store with just one click. Once a customer places an order from your store, your supplier will handle the rest.
5. Is Dropshipping Profitable?
Dropshipping is a low-risk business model that allows you to sell products to your customers without incurring huge running costs as a wholesaler would have. Because of these lower costs, it is easier to become profitable with dropshipping a lot faster than other business models.
6. Do I Need to Purchase Products for My Online Store?
No, you don’t need to purchase or hold any inventory yourself.
7. Do I Need to Register a Business Entity to Dropshipping?
Yes, you’ll need to register your business, this is due to the majority of payment providers requiring business owners to prove that your business has the credentials to authorise business transactions.
8. What Is MyyShop?
Myyshop is an intelligent selection and distribution platform with rapid site building based on SaaS. The MyyShop team are committed to helping global distributors easily establish their own e-commerce business.
9. Is MyyShop Available in My Country?
Yes. MyyShop is available worldwide no matter what your geographical location.
10. What About MyyShop Shipping Times?
Delivery time varies by the original location of the product and the final destination. Most products have various shipping methods available which might take several days or a couple of weeks.
11. Is MyyShop Only Available on Shopify?
Nope. MyyShop can be linked to the MyyShop store as well as both Shopify and eBay. Moreover, there will be more platform integrations coming soon.
12. Can I Use MyyShop With Shopify’s Lite Plan?
Yes, MyyShop works with Shopify’s Lite plan.
13. Can I Use MyyShop on My Own Website?
Currently, you can only use MyyShop on your Shopify and eBay store as well as the MyyShop store. It is recommended that users take advantage of the Shopify ‘Buy Button’ feature which allows businesses to embed products on their own website.
14. Can I have multiple stores in one account?
Yes, you can have multiple platforms stores in one MyyShop account. For example, users can have one Shopify store and one MyyShop store along with one eBay store all in one single MyyShop account.
15. How do I contact a supplier?
Users can have direct access to suppliers via the MyyShop dashboard.
16. How can I deal with warranties, products or delivery issues?
Warranties, products or delivery issues are dealt with by the supplier. Users can contact suppliers directly via the MyyShop dashboard if and when required.
17. What if my customer wants to return an item?
Customers can return items by sending the product back to the original address of shipment. Most items are covered by a return policy but each case is individual and there are no general rules. Users can contact suppliers directly via the MyyShop dashboard if any issues occur as a result of return policies.
18. How do I know if an order has been shipped by the supplier?
Users can check the status of an order via the MyyShop dashboard under “Shipped” in “My Orders”. If an order has the status of “Shipped” this means that the product has been shipped by the supplier. A tracking number will be visible on the same page so that users may keep track of the status of the
You sell it, we deliver it! MyyShop is your one-stop solution for dropshipping and e-commerce store creation.
Find out more about MyyShop and how you can kick-start your dropshipping business HERE.