Before you start using the services of a dropshipping
Before you start using the services of a dropshipping wholesaler that you consider suitable for your dropshipping store, it is strongly recommended that you place several personal and inexpensive orders to check the processing and shipping times, how the shipping logistics work, or if there is the possibility to personalize the labels and delivery notes.
You can then decide if this dropshipping supplier/wholesaler is right for you. In this regard, you can read our guide to starting a dropshipping business.
How does dropshipping work?
A Dropshipping store is an ideal system to develop small businesses, start a business managed from home or have an alternative source of income with low investment and no risk. Before starting with this type of distribution, it is recommended to do a minimum of research to evaluate if this modality interests us.
Dropshipping is a very interesting and didactic system
Dropshipping is a very interesting and didactic system for new entrepreneurs who do not have a lot of investment capital since it is possible to start with relatively low costs and profits from the first days. If you want to become an Internet seller or if you already have a store on your own e-commerce platform, setting up a system of distribution and sale of products “dropshipping” can be very easy.
An example to get started with a dropshipping store
Let’s not be fooled by the numbers and let’s see, from an example, what benefits we could get from a normal sale with an e-commerce dropshipping. First of all, we need to find and contact a dropshipping supplier or a Drop Shipper distribution company. This Dropshipper or wholesaler will sell a product, for example, an MP3 player, for 20 €, including shipping costs.
Do an in-depth study of the product
Then, our job will be to research how much we could sell this product on our e-commerce platform, on generic stores such as eBay or Amazon, on local newspapers, or in traditional stores. After this research, we know that the price of this product in our country is about 35 €. Compared to the price offered by our Dropshipper, we can make a minimum profit of 15 € gross if we use the Dropshipping service of this wholesale company.
Here is what will happen from here
We publish the product on our website, with a price of 35 €. If we work with a good Dropshipper, we will easily get all the photos, technical specifications, including customer reviews of the product on their website.
We now have all the necessary tools to create a 100% professional ad on our website. The ad is now available on our e-commerce site and it is even starting to show up on search engines.
Someone finds your e-commerce, is interested, compares prices, and buys this product on your website
Your new buyer has paid 35 € via Paypal for this product. We recommend you to use Paypal to start with because it is easier and faster to manage. With this 35 € on your Paypal account, you enter the Dropshipper website, buy the product for 20 €, and ask to send this product to the postal address provided by your customer when buying on your e-commerce.
Your customer will receive the product in the following days at the postal address indicated, sent directly from the wholesaler or Dropshipper, but he will think that you sent it to him yourself, thanks to the anonymous packaging used in Dropshipping.
Using dropshipping has many advantages for all parties involved in the sales process
- Your buyers will continue to use your services if they want to purchase similar products, and you will improve your brand image.
- Your supplier will continue to meet your customers’ demands.
- Each party has obtained a benefit: economic (the Dropshipper and yourself) or cash (your customer).
The profit margins may seem, at first glance, very low if you compare a dropshipping store with a traditional business
However, the drop-shipper manages all the costs related to storage, transport, customs management, etc. Moreover, B2C e-commerce customers are the main beneficiaries and they will not hesitate to buy again later. Moreover, thanks to dropshipping developing your product catalog is really easy.