Dropshipping is an interesting concept that may seem scary at first, but when implemented correctly and with the best platform, can be incredibly beneficial to businesses since profit is maximized without having to sacrifice time or money.
Dropshipping has become a more prevalent force in ecommerce in recent years. It’s especially beneficial to those who don’t want to manage the items that they sell. In fact, dropshipping focuses on buying products from a third party and then has that item sent straight to the buyer. As a result, the retailer never actually deals with the item physically.
The dropshipping supply chain is comprised of three main players. The manufacturers are the ones that actually build the item. Although they typically don’t sell straight to consumers, they do offer the cheapest price to both retailers and wholesalers, as long as they purchase a certain amount. That’s why usually only wholesalers buy from them. Wholesalers typically purchase in bulk from those manufacturers and either sell them to retailers or straight to consumers. A retailers is known to sell to consumers.
Each one of these players is capable of being a drop shipper! However, the prices of the manufacturer tend to be the lowest since the wholesaler who buys from them adds their markup and then a retailer, who potentially bought from the wholesaler, adds their own markup on top. As a result, if a company tries to use a retailer as a drop shipper, then the price that the company puts on the item most likely won’t be competitive, especially as soon as their markup is placed on top.
Why working with a dropshipper is useful to a business
This method is great for those companies that don’t yet have enough funding for building a large inventory for their up and coming ecommerce store. By utilizing a dropshipper, companies never have to buy an item until their buyer has made a purchase. They can also offer their customers a lot more buying options. Therefore, even start-ups can find their way into the market without having much money in their pockets initially. Additionally, a lot of money is saved since no money is spent on a maintaining a warehouse, on neither packing nor shipping items, or on constantly purchasing items so that there’s enough stock. As a result, not many expenses are involved. In fact, ideally, all that a business would need is a laptop. As a result, work could be done in the comfort of a home, for instance. However, as long as there’s internet, work can be completed virtually anywhere, granted communication between both the suppliers and buyers can be done with ease.
On top of that, in order to, for instance, double up on your sales, the amount of work put into accomplishing that doesn’t change. However, if a company was doing business the traditional way, then if the goal was to double up on sales, the amount of work that needed to be done would get doubled as well. Additionally, when it comes to trying out new items, businesses can do so risk free since they don’t need to purchase the item upfront.
As a result, apart from saving businesses money, the drop ship method also helps them save time and allows them to try things out risk free.
Working with a dropshipper comes with a few setbacks
For one, businesses tend to deal a lot more with low margins since the initial expenses are really little. Lots of the competition tends to sell their items at the lowest price possible in order to try to build up their revenue. Additionally, as we stated earlier, there’s no inventory. However, that comes with the major setback of not knowing what is and isn’t in stock. Also, since businesses tend to get items from various suppliers, it’s difficult to keep track of the information from each one since they are all constantly changing. Working with multiple suppliers becomes even more complicated when it comes to shipping since each one will have their own shipping fee. There’s also the chance that a company will be at fault for a mistake that their supplier actually made, so they need to be aware of the consequence and understand how to deal with it.
Nonetheless, these issues can be mitigated with a proper solution, such as Shopping Cart Elite. However, before we get into how Shopping Cart Elite can help, let’s take a look into how it compares to Shopify.
Dropshipping with Shopify
Dropshipping with Shopify allows ecommerce stores to sell an item by buying it from a third source and then sending it to the buyer. They help businesses build a store by assisting them with creating their own, personalized site and they eliminate fees for the sales to other channels. However, after making one site, companies can’t make another one without having to start all over once again.
When it comes to building the site itself, Shopify has a little over 100 themes to select from. However, only 9 of them are free of charge. The rest of them are pretty costly with a starting price of $100. Additionally they have more than 1200 apps and plugins to choose from, but a majority of them are only free for the first 15 days and then companies have have to pay a monthly price for them.
Additionally, if the website doesn’t have a large customer base, the margins will have to decrease in order to attract buyers, but as a result, the profit earned will decrease as well. The price also has to be significantly low if businesses want to remain competitive.
Another key part that Shopify lacks is a good tracking system. Retailers tend to struggle because Shopify’s customization processes don’t guarantee continuously updated data regarding inventory. Another area where they lack in customization is in the product postings. Companies are only allowed one free-text field for each item. Since businesses can’t get any tabs on their own, item’s detailing looks inadequate and also, it’s difficult to prove why your item is better than that of a competitor which once again, brings companies back to having low margins.
They’ve also created some guides that are beneficial to those looking to work with dropshippers. They are pretty detailed and useful ways to get started, but what better way to learn than through the practice of trial and error?
Dropshipping with Shopify also doesn’t help with keeping a strong customer base since companies don’t get help with finding the best and most reliable dropshipper. Should the dropshipper get something wrong, it’s all on the retailer to fix the problem. Most likely, fixing the problem entails issuing a refund which just decreases the profit earned and leaves a customer feeling unsatisfied with the company. However, Shopify does suggest in one of their guides that the best way to go about this situation is to own up to the mistake, fix it with a refund, or often times with something even bigger to ensure that the customer still continues to purchase from them, and have the supplier pay to mend the situation. Shopify also does have customer support available 24/7 so should any questions arise, they can be answered within minutes, regardless of the time.
Additionally, since Shopify doesn’t have a wide range of CMS as well as blogging available to their users, it’s difficult to increase a business’s SEO.
As you can see, Shopify doesn’t assist with solving some of the disadvantages associated with dropshipping. However, in areas where Shopify is lacking, Shopping Cart Elite makes up for it while also offering even more as well.
Dropshipping with Shopping Cart Elite
For one, the automated inventory that they offer helps make sure that a company is always up to date with the actual level of stock. They also immensely help companies with their SEO which ultimately leads to more sales. They’re known for being easily customizable and as a result, they provide their users with the necessary tools, and more, to beat out their rivals. It’s also a breeze to customize an ecommerce website with the help of Shopping Cart Elite. In fact, they can aid businesses with the creation of both an attractive and an unforgettable site. Additionally, selecting a dropshipper that is reliable and legitimate is a more difficult feat than you would expect. Shopping Cart Elite, however, has been known to help companies succeed in finding the right drop shipper. Lastly, having a successful business is easily accomplished when the expenses are at a minimum. Shopping Cart Elite helps companies by offering a drop ship system that automates many processes. As a result, companies have a bigger chance to get into the profitable aspects of ecommerce thanks to everything that is automated courtesy of Shopping Cart Elite. In the end, businesses need less time and less staff in order to increase sales and make a lot more profit, which is essentially the goal of drop shipping.