What is ecommerce Dropshipping?

You may have seen the term ‘dropshipping’ used around the internet when people talk about ecommerce. What is it and could it help you sell more products online?

What is dropshipping?

The traditional model of ecommerce is that you have stock of your product range and send the items out yourself as they are sold. Dropshipping is slightly different, in that you don’t keep the physical stock. A third party sends the goods on your behalf. This could be the manufacturer, a distributor or a fulfilment company.

How does this work?

You have a website, sell the goods and take payment. Once the order is received, you send the order details to the dropshipper and they send out the goods. You often handle any customer service enquiries around the delivery with the dropshipper acting invisibly on your behalf.

Pros of dropshipping

As you don’t have to keep stock, the up front costs of running a dropshipping ecommerce website could be lower. You can also offer more items for sale and possibly even use different dropshippers for different items on your site.

Cons of dropshipping

While it can be a quick and easy way to get started, there are some drawbacks. Finding reliable suppliers could be an issue, especially if you don’t have a record of selling online. Popular items may already have many sites selling online already which increases the difficulty in getting your site found and making sales. Finally, you are relying on the dropshipper to send the goods quickly and to pack them well to avoid damage. Returns will eat into your profits and unreliable delivery can undermine your reputation.

Conclusion

Dropshipping can be a good way to get started with selling via an ecommerce website, but there are some points to consider before taking that route. Future articles will look at finding profitable products and using dropshipping as part of your ecommerce strategy.