INTRODUCTION
In the eCommerce industry, sourcing and storing inventory, handling customer returns, managing shipping times, and product development pose significant challenges. However, with dropshipping, you can bypass these concerns and focus solely on product selection, advertising, and negotiation.
So lets take a look at what Dropshipping is.
WHAT IS DROPSHIPPING
Dropshipping is an eCommerce model where a store sells products without keeping inventory. When a customer orders, the store purchases the item from a third-party supplier, who then ships it directly to the buyer. It’s an appealing choice for store owners since it reduces overhead and risk.
HOW DOES DROPPING WORK?
In dropshipping, the retailer plays the role of a mediator between the supplier and the customer, without physically handling the products. The profit is derived from the discrepancy between the customer’s price and the cost of purchasing the product from the supplier.
Let’s take an eco-friendly dropshipping store as an example. The store collaborates with a supplier, utilizing their images for advertisements on platforms like Facebook. When a customer visits the website and places an order for a reusable water bottle priced at ₦30 (Nigerian Naira), with ₦5 spent on advertising to bring the customer to the website, the retailer then forwards the order to the supplier for fulfillment. The supplier directly ships the water bottle to the customer, and the retailer pays ₦15 to the supplier, resulting in ₦10 profit.
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TYPES OF DROPSHIPPING WE HAVE
Although dropshipping is generally about being a middleman to both a buyer and a seller, there are different categories we can venture into base on our convenience and preference. They include
Product Reselling
Most common type, includes subcategories like shipping from China, branding dropshipping products, and creating niche stores.
High competition and low barrier to entry.
Suitable for beginners due to light upfront costs.
Print-on-Demand (POD) Dropshipping
Specializes in customizing products with provided designs.
Supplier prints designs on items like T-shirts, mugs, and posters and sends them directly to customers.
Popular among creative entrepreneurs, but requires a higher budget for success.
Wholesale Dropshipping
Involves partnering with a traditional retail business to sell their products at a higher price and earning a profit from the markup.
You handle marketing and selling, while the wholesaler manages inventory and shipping.
Ideal if you already have a relationship with a brick-and-mortar business, but starting without one may be challenging due to existing online competition.
IN CONCLUSION
Dropshipping is worth it for the right person. If you’re looking for a quick way to make money, it’s likely not a good option. If you’re looking to play the long game, test several products and build. You could begin selling products within a week or not see success for three months. It all depends on the product you choose, how you advertise it, and what you’re willing to sacrifice to achieve success. Let us know if this post helped you jumpstart your first dropshipping business in the comment section below. Thank you.
