Dropshipping is a business model that in recent years has moved masses and made more than one rich (or almost rich).
In principle, dropshipping is as simple as having an online store where the physical product is not yours, but your supplier . This business model is based on the fact that your supplier will be the one that directly sends the product that your client has bought on your website, without it passing through your hands.
How Does Dropshipping Work?
As you can see in the scheme that we have created, there are four fundamental steps in any dropshipping.
From left to right, we can see a customer shopping in an online store . When the client makes the payment, it will reach us , which in this case we act as an intermediary . We keep a part of the money from that purchase, and the other part goes to the warehouse or supplier that has the product. From the supplier’s own warehouse, they will use the data that the user has entered on your website to send the order directly to the end customer.
Why Did It Become So Popular?
A few years ago, this business model grew like wildfire. But why?
As we have seen previously, it is a model in which it is not necessary to make a large initial investment in product and materials, since you can have the supplier take care of the inventory, packaging and shipments (which are also usually expensive and eat much of the benefits). In this way, you can create an online store and invest with advertisements or marketing , making the initial investment required by the business shared between you and your supplier.
There are several forms of dropshipping, but here we will focus on the model that caused the furor; DROPSHIPPING with ALIEXPRESS, OBERLO AND SHOPIFY.
Is It A Good Investment To Create Dropshipping?
It depends. It is clear that to start you may need a little outside help, especially if you are not a web developer or you have no idea how this world works. eye! We do not say that it is extremely difficult, in fact on YouTube you can see tutorials on how to start, but it is true that, from the start, you have to make some investment.
Of course, many people have seen in this business model a very profitable way out .
Is Dropshipping Profitable
We could say yes, in a large number of cases. Of course, you have to take into account several factors that are decisive:
The product itself. Obviously, the most important thing about a store is what it sells. If you choose products of poor quality or that do not correspond to the description, you may have problems. The most important thing if you do dropshipping with Aliexpress, and even with other suppliers, is to buy the products you are going to offer yourself to see in what state they arrive, their quality and assess whether you would buy them yourself for double their price.
If we talk about dropshipping with Aliexpress, or even with other providers, you should take shipping times into account. Many customers expect to have their order delivered to home in a few days, and if you keep them waiting too long, they may not buy again. Keep that in mind: a repeat customer is a customer for whom you only pay for advertising once. It’s yours.
Advertising can be very expensive. Be careful with creating ads. Especially at the beginning you may not find your market niche well and waste time and money investing in a population group that is not going to buy what you sell. Do a preliminary study and test to see the acceptance you have on social networks.
In our opinion, any well thought out and organized business model is good business. But you have to take everything into account, both the positive and the negative. It is true that you can make a lot of money if you get your product to go viral, for example, but you can also get many customers who only buy once. (You will basically lose customers from extremely long shipping times.)
The main thing is that you put yourself in the client’s shoes . A good product, good shipping and above all, a good after-sales service.