Getting started in e-commerce: everything you need to know about drop-shipping

May 2023 – Selling goods online without having to store them in a warehouse yourself: that is dropshipping in a nutshell. A miracle solution for those starting out in e-commerce, proponents claim. But is this really true?

Dropshipping is a form of direct online sales where the products are not stocked by the seller. The supplier sends the orders directly to the end customer. The process is as follows:

1. The customer places an order on the webshop.

2. The webshop operator contacts the supplier and provides all the info for the order.

3. The supplier prepares the order and sends it to the customer.

Dropshipping vs marktplaats

So it is the supplier that handles the production and logistics in dropshipping - not the webshop, as is usually the case. The shop makes money by taking a margin on the supplier's price. 

This, by the way, is where dropshipping differs from the marketplace model. That is a platform that connects sellers and buyers. The seller pays a commission on the sale and sends the order to customers himself. He or she also takes care of customer service and any returns (think Amazon and Alibaba).

The advantages of dropshipping

1. Start-up costs for the webshop are limited. 

2. The seller can concentrate on his core tasks: marketing and sales.

3. The seller can offer a wide range and easily adapt it to demand.

The challenges of dropshipping

Sounds simple and profitable, but in reality it does not always run smoothly. The disadvantages of dropshipping cannot be underestimated:

1. The seller has no control over customer satisfaction.

2. The seller is legally liable, from payment to delivery, even if he has nothing to do with the logistics. 

3. Delivery times are often longer because web shops can partner with suppliers from all over the world.

4. Margins are limited, because if prices are too high, customers go to a competitor.

Find a reliable supplier and invest in marketing

The most important message for those who want to try dropshipping? Go with a reliable supplier that keeps its promises. To attract customers to your webshop, you will also need to invest heavily in marketing. Competition in the online market is fierce and often a real price war rages. Margins are therefore rather small.

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