The online trading model called dropshipping is briefly; have an outsourced showcase website strategy is to attract customers to purchase products from suppliers. Operating costs such as inventory and shipping are the responsibility of the supplier, not the dropshipping manager.
Anyone who has heard of the profits of Aliexpress, MercadoLibre and Shopee has an idea of how profitable dropshipping can be. Better understand how this sales system works with TecMundo.
Dropshipping: What is this profitable sales model?
“Free shipping” is a free translation of the term dropshipping. However, it can also be understood as a digital business model that uses third-party inventory to generate profits.
The sales commission earning process is simplified here:
The customer selects the products on the website, completes the order – easy payment methods are important – and the dropshipping manager notifies the supplier to begin shipping the products to their final destination.
Compared to market places, One of the main differences of dropshipping is in stock control. In dropshipping, the product request to the supplier is made only after the customer makes the payment.
In addition, issues such as exchanges, returns and technical assistance are the responsibility of the original supplier.
What are the risks of dropshipping?
Investing in dropshipping may seem like an easy way to make money. However, this sales method has its drawbacks, as in other entrepreneurial projects.
The main risks are:
- High competition can lead to low profitability: as the online market explodes during the pandemic and requires large sales volumes to earn meaningful dropshipping commissions;
- Total dependency on suppliers: it is important to choose options with good stock control and product tracking;
- Selling out-of-stock items: andThis risk stems from the previous issue. Therefore, it is very important to automate the notification processes between the supplier and the dropshipping manager to avoid bad shopping experiences;
- Change in delivery charges: when working with multiple suppliers located in different locations. This final price difference can drive the potential customer away.
Is dropshipping a crime?
Don’t do that. Dropshipping is legal in Brazil, and it is important to have all the documents pertaining to your business activities, such as the CNPJ and the Comissária de Despachos’ National Classification of Economic Activities, to avoid problems with the courts.
Is dropshipping easy?
Every entrepreneurial activity requires effort and discipline. Dropshipping is no exception! The step-by-step guide to starting a dropshipping business and running it profitably consists of:
1. Choose your niche market
Examine the pains and habits of your target audience. You can move into the tech area, which showcases gaming keyboards and mice, or the sports area, which showcases fitness equipment.
2. Look for reputable suppliers
Use your network and seek referrals from suppliers committed to quality, deadlines and transparent customer relations policies.
3. Create a website and own your own domain
There are several possibilities for having an attractive website: hire a programmer to develop it or use ready-made templates from platforms like Wix.
Regarding domain registration, know that the cost is low and paid annually. Moreover it will be necessary choose hosting for your online storefrontLike Alibaba, CartX, Shopify, Nuvemshop and AliDropship.
4. Register the products
Looking for tools that automate the registration of products can speed up this process. There are suppliers who use such solutions, it is worth choosing them!
5. Create a transparent cancellation policy
Make the cancellation, change, return and shipping conditions visible on your website. Customer relations are a point of attention to avoid future headaches.
6. Create a personalized marketing strategy
Create promotional plans to increase organic and paid traffic across channels such as social networks, blogging, and Google Ads.
7. Follow up after sales
Confirm that the product reaches the customer on time, the packaging is of good quality, and the experience is positive for your consumer.
This management shows whether it is worth staying with a particular supplier and reinforces the good image of your dropshipping.
What is the salary of a drop ship?
Dropshipping revenue depends on a variety of factors, including profit margin negotiated with suppliers, investment in marketing activities, and website maintenance.
So, pay attention to the news in your niche to stand out and be another dropshipping case that makes millions a year. If you want more tips on how to be a pro in the tech market, have your eye TecMundo!
Source: Tec Mundo