Starting a business has never been easier than it is today, thanks to the tremendous capability of the internet. From information and research to platforms, applications and payment systems, most people have everything they need to start an online business. The number of online stores continues to expand and more entrepreneurs are taking advantage of existing opportunities that come with the cloud community.
Dropshipping, a business model that involves sourcing products from a third party, is one of the most practical plans for enthusiast entrepreneurs. Shopify dropshipping, in particular, offers a unique opportunity with various preset systems that can help you quickly launch an online store. However, there are several aspects to consider before starting a business.
Here is a brief overview of Shopify’s dropshipping model, including how it works, the good and the bad.
How dropshipping works
Dropshipping is a retail fulfillment model where you (the retailer) do not own any stock in your retail store. You merely offer a user-friendly landing page where you can receive orders and send them to third-party manufacturers and wholesalers who stock the products. In this model, the third party takes care of shipping and all you incur is the small fee. Since wholesale price is discounted, dropshipping allows you to sell different products across the world. However, this model requires finding high-quality brands and products.
Shopify dropshipping offers to connect you to manufacturers, wholesalers and suppliers from all across the globe and your target market is just as diverse. It has the central systems and features required to facilitate online order fulfillment. Users can process their orders, prompting verification, which is only a few clicks. The merchandise is then shipped by the manufacturer directly to the customer.
Merits of Shopify dropshipping
Shopify dropshipping offers two main approaches to starting your online store. The first involves seeking out North American suppliers and others across the world through the extensive supplier database. The second option is the Shopify app, which connects our store to thousands of suppliers.
Oberlo is Shopify’s marketplace that independent store owners can use to find suppliers and products they can offer to their customers. You can quickly browse and add products directly from suppliers to your store and fulfill orders once customers make a purchase. Oberlo automates the process and simplifies it to one click, the “order” button. It syncs with AliExpress and the product will be directly shipped, so you do not have to worry about anything else. The benefits of efficient dropshipping, such as Shopify’s, include:
- Lower startup capital and business operation costs
- Easy to set up, launch and manage
- You can run it from anywhere provides you have internet access
- You can quickly test the model and scale your business
- Access to numerous suppliers and a wide variety of products to sell
While dropshipping offers a viable venture, a lot goes into starting a business. You must still promote and market your online store and take responsibility when things go wrong. Since you do not have actual inventory, there is little customization you can make to the products and descriptions. The market also has stiff competition and low-profit margins. Nonetheless, profits depend on the merchandise you sell and the target market. Another downside to dropshipping is a costly shipping fee, especially when customers purchase merchandise from different suppliers with different shipping logistics.
The bottom line
Shopify dropshipping offers the opportunity to set up a quick online store that sells anything you choose. You can build a strong brand and website for your store and fulfill retail orders from the comfort of your home or anywhere. A PC and store website or landing page is usually all you need to invest in. You will also need to invest in e-commerce software, such as Shopify, to process your orders and streamline the supplier-customer infrastructure.