Dropshipping pros and cons. What is dropshipping and how to start making money with it

The way business is done is constantly changing, and entrepreneurs need to keep their finger on the pulse to avoid losing touch with customers and not losing out to competitors in the market. Not long ago, a retail sales system called dropshipping was invented. What it is, what are the pros and cons compared to already known models of distribution of goods, is described in detail in the article. So, what is the new way of implementation?

Dropshipping – what is it?

Dropshipping literally means “direct delivery”. It means that the manufacturer negotiates with its representatives about the sale of its product. But there is a significant difference between wholesale customers and dropshippers. In this case, payment is made for each individual item of goods only when there is a real buyer. The sales chain looks like this: the buyer purchases the product from the dropshipper - he buys the product from the manufacturer - the manufacturer sends the product directly to the buyer. Sometimes you can arrange for the manufacturer to send the product with the seller's logo. For many sellers, cooperation through the dropshipping system has many advantages.

When did dropshipping start?

The term “dropshipping” appeared in Russia only a few years ago. In our country, the first sales using this system began about 6 years ago. At first, both manufacturers and sellers treated it with some distrust, as they were accustomed to wholesale deliveries and large volumes of goods purchased at a time. At first, many raised their eyebrows in surprise: dropshipping - what is it? The innovation did not immediately catch on. But the pioneers, with their success, have proven the effectiveness of working with a system such as dropshipping. Reviews from sellers and manufacturers note this fact. But, as with any promotion tool, you need to clearly understand its features. Otherwise, there will be little or no benefit.

Advantages

Over time, many manufacturers and retailers who have ventured into this system have realized that it has significant advantages over simply wholesaling and distributing goods.

Firstly, there is no need to pay for the consignment of goods at once. The seller orders only those items that have already been paid for by real buyers. That is, he sells what he does not yet have on hand, and what he will subsequently buy from his supplier.

Secondly, the issue of logistics is being resolved. All goods are sent directly to the buyer, bypassing the intermediary in the form of a seller. He does not need to have a staff of couriers and drivers to deliver goods to his customers. These processes are regulated by the manufacturer.

Thirdly, the task of storing large volumes of goods is removed. Not all stores have large free areas and their own warehouses to safely store goods that have not been sold for a long time. This is especially true when it comes to perishable goods or items that quickly go out of fashion and are no longer in demand among consumers.

Many entrepreneurs have already appreciated the convenience of working with a system such as dropshipping. Cooperation with manufacturers becomes much more comfortable in terms of finances spent.

The seller's earnings consist of the difference between the funds received from the client and the goods paid for from the manufacturer.

The seller can even send customers products under his own brand, which provides additional opportunities to increase sales and grow the business. Dropshipping allows you to allocate more funds for advertising and promotion of the trading platform.

When working with this system, you can change the product range in the store much faster if there is a decline in customer flow and a decrease in the number of orders. The risk of being left with a huge amount of unsold goods is reduced to zero. Also, in the event of a decision to close a business, the question of how and to whom to sell inventory remains will not arise. In this case, many businessmen are forced to sell goods to their detriment, at a price lower than the purchase price, in order to somehow minimize losses.

Flaws

But, as in life, in addition to the positive sides, there is also a downside to the coin. Dropshipping is no exception, unfortunately. Working according to this scheme, the seller may be faced with a situation where he has received money from the client, but the product is not in the manufacturer’s warehouse. Then you have to deal with refunds and also lose your image in the eyes of customers.

Also, it is the seller who has to deal with the client in the event that he has received a low-quality or defective product that he wants to return or exchange.
As part of the dropshipping system, the delivery time for goods to the client is longer than when ordering in a regular store. This is especially felt if sales are carried out in large cities, and the manufacturer is located in a remote region or even abroad. Not all clients are willing to wait. Residents of big cities are spoiled by same-day delivery. However, the wait is compensated by a more favorable price compared to competitors, since the percentage of the seller in such a scheme is significantly lower than that of wholesale buyers.

What do you need to start?

To start working on the dropshipping system, you must meet several important conditions.

• First, it is necessary to study the product market and understand which of them are in demand in the market and will be in demand among customers. Entering the market with a product that almost everyone has means having to invest a lot of money in advertising. Otherwise, the flow of clients will be so low that such trading will lose all meaning.
• Secondly, you need to decide on the target audience of the selected product in order to find out the development strategy for the new project.
• Thirdly, it is important to choose a reliable supplier who will ship the ordered goods to your customers on time. You need to find not just a factory with a sign saying “We do dropshipping”, but also make sure of the quality of its goods and compliance with delivery conditions.
• Fourthly, you will need a trading platform. As a rule, this is a separate online store that presents the entire range of products with photographs, descriptions and customer reviews. To promote a website, you will need the services of competent specialists who will suggest legal opportunities for promoting it in search engines and the amount of advertising required.

Dropshipping in Russia

Local businesses have not yet mastered this method of implementation. Entrepreneurs in Russia do not yet know that dropshipping is very profitable, that it is convenient and practical. Especially with small starting capital. So far, dropshipping trade is not very popular in our country for several reasons. Partially due to the need to pay in advance for the purchased goods. Most buyers prefer to choose the payment method in cash to the courier. Unfortunately, due to many fraudulent schemes, not everyone is willing to pay for the purchase in advance. This can’t always be understood from the store’s description, but if the manager says that you need to wait for delivery for several days, or even weeks, then it’s almost like a huge poster with the inscription “We work on a dropshipping system,” and some customers are alarmed by this.

Risks of dropshipping

All investments of an entrepreneur are limited to the costs of registering a legal entity for the correct preparation of tax and other types of reporting and the costs of promoting a trading platform on the Internet. Of course, the cost of creating a website can differ several times, or even several dozen times. It all depends on the requirements for design, functionality and control capabilities. Naturally, the potential of an “expensive” online store is much higher than that of a homemade amateur one.

In general, this is a very promising option for those who do not have the opportunity to invest a large amount in business development, but who have a great desire to try themselves in a new business, since the risks of losing large sums of money are minimized.

How to find a supplier?

One of the key tasks on the path to success is to find a reliable supplier to work with a system such as dropshipping. Cooperation should be beneficial for both parties. At the moment, the number of manufacturers agreeing to this option is constantly increasing, despite the initial skepticism regarding the volume and regularity of purchases, in which factories and factories are very interested. Before starting work, it is highly advisable to check the quality of the supplied goods. This is especially necessary when working with factories from China. It is important to maintain a healthy balance of price and quality here.

Prospects for dropshipping

This type of product sales has very great prospects for development in the context of constantly changing market trends. More and more entrepreneurs are choosing manufacturers using the dropshipping system in order to minimize risks in the event of a drop in demand for a particular type of product. The dropshipping system allows you to quickly respond to all market requirements without compromising your business.

Despite the fact that this is a completely new trading model, it is already in great demand, so factories and manufacturers cannot ignore it when building their own development strategies and working with sales partners.

Now many people are moving their business to the Internet. You won’t surprise anyone with an online store anymore. But few people know and have tried another method of trading - dropshipping. What it is? What are the advantages of this sales scheme? What should you be prepared for when starting your own project?

New online business

Dropshipping is based on the familiar idea of ​​an online store. But you’re not racking your brains over the question of where to get money to purchase goods. You can’t solve the problem of how many of these same goods to buy. Where to locate the warehouse, how to deliver - these problems no longer concern you.

And all because you work using the dropshipping system. What kind of sales is this - let's figure it out.

In general terms, the idea is through which you will sell goods directly from the supplier. You are a kind of intermediary, a dealer. Your responsibilities include promoting your store, making it popular, taking orders for the products displayed in the store and transferring these orders to the product holder. Usually the latter are either manufacturing companies or wholesalers. The supplier, having received the order, decides on issues with packaging and delivery.

Dropshipping system

Now let’s look in more detail at the sales scheme using the new system. And at the same time, let’s see what the profit consists of.

Let's say you decide to sell jewelry. But you don’t have the funds for the initial purchase of goods, renting a warehouse, and there are also problems with delivery. You shouldn’t take out loans or get into debt.

On the Internet, you look for sites that are not against working together with dropshippers. From the resulting list of potential suppliers, you find those who offer the product you need (according to the criteria you outlined) at the lowest prices.

After that, you contact the owners of the resource and submit an application. Usually it is possible to formalize cooperation without any problems.

Now you start listing the product on your store pages. You set the price in the positions yourself. Of course, they will be higher than those offered by your supplier. But don't go too far. Focus on the average offer for your product category. Otherwise, you won't attract a buyer.

Pictures are used either from the supplier’s website or from any available resource that has the necessary illustrations. It is better to write product descriptions yourself. If you are not good at creating selling texts, then find a good copywriter.

Working with the customer

If we work using a dropshipping system, then we process all orders received by us and redirect them to our supplier.

The supplier himself resolves issues with packaging and shipping. Here you can decide almost nothing. The quality and speed of delivery depends on your partner. But in order not to let everything take its course, connect to the tracking service. This is an individual order number, it allows you to track the path of the ordered product. This number does not prevent you from announcing it to your customer. This will be a plus for you. You will confirm your reliability and earn a reputation.

It doesn’t hurt to discuss in advance with the supplier the condition not to indicate on the parcel information about the original cost of the goods.

Advantages of the scheme

So, our first step has been taken into dropshipping. What is this in terms of advantages?

The advantages of this business are:

• Lack of start-up capital. You are freed from costs at the stage of launching a store. You will have to invest money, without this you will not open your own selling website, but this will not require large expenses from you.
• You do not need to rent a warehouse and organize a delivery service. Your supplier takes on these responsibilities; you just need to find and attract as many clients as possible.
• The risk of making a mistake with the price is minimized. You are not purchasing the product. Therefore, the situation in which you bought a product at one price, but managed to sell it only at a lower price, is not about you.
• You are not tied to the assortment. You don't have any inventory. Therefore, at any moment you can leave electronics for the toy market. You just need to find new suppliers and change catalogs on the site.
• You are free to choose your partners. One partner did not live up to expectations, find another, more reliable one.

At first glance, the scheme is reliable; you work as a dealer. Your supplier is happy with constant orders, you are happy with the stable income your store brings.

Cons of the system

The advantages are obvious, but what about the disadvantages that dropshipping has. What is this in terms of system shortcomings:

• You cannot in any way influence the speed of delivery of goods, so all shortcomings on the part of your supplier have a negative impact on your image. You must be ready to quickly deal with a situation where you placed an order, accepted money from a client, and he never received his goods. Think about your actions in such a conflict in advance. In any case, the customer will demand the goods from you.
• The quality of the product can also be very poor. Try to check the reliability of your future partner at the stage of concluding a contract.
• Packaging and delivering the goods to the client again does not depend on you. Therefore, you have to rely on the integrity of the supplier.

Suppliers

As you already understand, much in this business rests on the reliability of suppliers. Unfortunately, fraud situations are very common. Therefore, carefully check your potential partners. Dropshipping suppliers are required to take a responsible approach to the shipment and delivery of goods.

Don’t be lazy and sign an agreement with the selected companies. This will make it easier for you to build business relationships.

Say goodbye to all unscrupulous suppliers immediately. You will be constantly under stress, your reputation will suffer, and clients will begin to leave you. Don't wait for problems, look for other suppliers.

Russian prospects

Russian dropshipping is not yet developing so actively. Many people are still wary of this business scheme. The point, most likely, is that there are too many unscrupulous suppliers, delivery mechanisms are too poorly adjusted and the distrust of Russian customers is too great.

To successfully promote a new type of trading in the domestic Internet sector, find reliable partners among European, Chinese or American sellers. Now there is no problem reaching them directly. Some advanced users themselves use the ability to order goods from these sites. You can serve as a seller for those who are reluctant or afraid to buy on the largest marketplaces themselves.

You create a convenient store in Russian. With clear navigation, convenient tools and act as an intermediary.

With the development of Internet technologies, new models of cooperation between seller and buyer have appeared on the market. One of them is dropshipping. What is dropshipping, we will explain in detail and in simple words in this article.

Dropshipping concept

Literally translated, the English term “dropshipping” means “direct delivery”. This is a type of entrepreneurial activity that involves promoting a product through an intermediary. The latter purchases the goods from the supplier after receiving payment from the client. The key difference between this sales scheme and the others is that the goods are sent directly from the supplier to the client.

What it is

Dropshipping is a special form of interaction between seller and buyer, in which the dropshipper only creates orders. Dropshipping income is the difference between the seller's revenue and selling price. Today this scheme operates via the Internet. Intermediaries can be presented either in the form of a specialized website (group on a social network) or in the form of an online store.

Who is a dropshipper

A dropshipper is an intermediary who ensures delivery of goods to the recipient. Anyone can become a dropshipper. The requirements for intermediaries are minimal. The candidate only needs to have a computer with Internet access. The supplier takes responsibility for all issues related to the delivery of goods. Delivery may be carried out on behalf of an intermediary if this is specified in the contract. An intermediary can simultaneously cooperate with any number of suppliers.

The intermediary is interested in this form of business, since he can make money on someone else’s goods without risking anything. The supplier uses dropshipping to increase sales and sales volumes.

Dropshipping system

The business scheme looks like this:

• The intermediary enters into an agreement with the supplier on cooperation under the dropshipping scheme. The contract may specify the conditions for calculating the markup. The intermediary receives product catalogs and places them on its website. In this case, the price for the buyer is indicated taking into account the markup.
• The buyer orders the goods from the intermediary. If required, make an advance payment.
• The dropshipper pays the goods to the supplier and indicates the delivery address.
• The supplier sends the goods to the customer.
• Upon receipt of the item, the buyer pays the remainder of the cost.
• The dropshipper pays the supplier either at the time of placing the order or after receiving payment.

What is dropshipping in sales

Dropshipping is a simplified sales system in which products at wholesale prices are sold to retail. Previously, intermediaries had to spend a long time collecting orders for a certain quantity of the same product in order to purchase it at a good price. During this time, some customers may have canceled their order. As a result, suppliers had to buy entire batches of goods from the manufacturer and then sell them from their website. This is a huge risk.

Dropshipping does not involve purchasing in batches. Manufacturers are ready to ship goods to dropshippers in quantities of 1 piece, but at wholesale prices. The online buyer cannot check whether the product is in stock. But the dropshipper has information about stock and can indicate the availability of the product on its website. Once the customer places an order, the intermediary asks the supplier to ship it on his behalf.

Who benefits from dropshipping?

First of all, this business scheme benefits the intermediary. No investment is required from him. Very often the supplier provides a free platform for expanding an online store. A dropshipper does not need to maintain a warehouse or office; he can work directly from home. Even if the scheme does not work, he will only lose his time.

This scheme has few disadvantages, but they are all significant. To make money, the intermediary must add a markup to the product. A competent buyer can easily contact the supplier directly. A dropshipper will have to face huge competition. To receive the maximum number of orders, the intermediary's website must appear on the first page of the search engine. This is very difficult to do, especially when you have to compete with the service provider itself. Website promotion costs a lot of money. There is no guarantee that these costs will be recouped.

Dropshipping is a type of entrepreneurial activity. Therefore, the question arises: is it necessary to register a legal entity to conduct business?

Any business activity aimed at making a profit must be subject to taxes. Otherwise, there is a risk of running into a fine and criminal prosecution. Therefore, when engaging in such activities, it is better to officially register an individual entrepreneur or LLC. Registration of a legal entity requires more time and costs. Additionally, you will need to maintain tax and accounting records.

In order not to attract the attention of the Federal Tax Service, it is better to register an individual entrepreneur under the “income” scheme and pay 6% to the budget. This amount will be much lower than the fines provided for non-compliance with legal requirements.

Without registration of individual entrepreneur

According to the law, individual entrepreneur status is required only if income exceeds 100 thousand rubles. As stated earlier, this choice comes with risks. In the event of an unscheduled inspection, the Federal Tax Service will have to prove that your type of activity does not fall into the category of entrepreneurs who “receive a stable income.”

Books and videos

You can learn the details of how a business model works from the inside using training materials. The author of the book “Dropshipping: 3 million rubles in 1.5 years,” Christian Aquila, tells his path to success. Practical tips for achieving goals are presented in the book “The ABCs of Dropshipping” by Aleksandar Kharkov, and reviews of people who have used them in practice can be seen in the video material, which is posted on the YouTube channel of the same name.

How and where to start dropshipping to always be in the black

Do you want to sell clothes online, but you don't have the items or capital to purchase it? In this case, you should use a dropshipping scheme.

The first step in this direction is to find manufacturers who are willing to provide information about their warehouse balances. Manufacturers should be searched on the Internet not only in Russia or Ukraine, but primarily in China. In some cases, local wholesalers agree to work under a dropshipping scheme.

You can trade anything. It is better to choose trendy products that will be in demand. You should ask the supplier for a catalog with prices and photographs of products. Study the terms of cooperation in detail.

A point of sale should be created if this has not been done before. This could be an online store, a one-page website, a group on a social network. Next, you need to post photos of products, but at pre-thought-out prices.

When a customer places an order, the intermediary selects the appropriate supplier's product and arranges delivery to the customer's address. The latter pays for the goods at the prices of the intermediary, and the supplier ships the goods at the agreed price. The difference between these prices is the dropshipper's income.

The supplier sends the goods to the client and receives his money.

Dropshipping agreement

The terms of cooperation with the manufacturer should be formalized in an agreement. From a legal point of view, this will be an agency agreement. Under this agreement, the dropshipper undertakes, on behalf of the manufacturer, to perform a number of actions on its own behalf, but at the expense of the principal. The intermediary acquires the rights to all transactions made with third parties on its own behalf. If the dropshipper acts on behalf of the principal, then all rights and obligations arise with the manufacturer. In some cases, the agency agreement may not have a validity period.

Business plan

Supplier search. In Russia, the dropshipping scheme is implemented through the resale of Chinese goods. You can choose items from the assortment of Taobao.com or AliExpress.com.

Determining a niche and thinking through trade margins. Competition in this segment is very high. There is no point in increasing the cost by 50%, since the costs of launching the project will not pay off.

Creating your own website. The unique design and user-friendly interface can attract a large number of buyers.

Calculation of break-even point. Intermediary costs are the costs of developing and promoting the site. Depending on the field of activity, the maximum markup can be 40%. Consider an example of how to calculate the break-even point. To recoup expenses and make a profit, you need to sell goods worth 350 thousand rubles. To do this, you need to attract 350 clients who spend an average of 1000 rubles. About 12 orders are received per day. If all conditions are met, the costs will be recouped in 30 days (350,000 / (12 * 1000)).

Increasing customer base. It is necessary to constantly monitor sales and the target audience in order to find potential customers. You can promote your site both through search engines and social networks, provided that all advertising costs are covered.

Earning money from dropshipping without investment

Dropshipping is rightfully considered a business without investment. You can promote a product through a public page on a social network. The scheme of work is very similar to sales through an online store. The difference is that orders do not arrive in the “basket” but through personal messages.

However, this scheme has its drawbacks:

• you can lose customers if the administration blocks the public;
• it is not convenient to accept payment;
• There are no tools for qualitative sales analysis.

You can create a one-page website that will contain information about the product itself, its benefits and customer reviews. The visitor will have two options - order products or close the page.

Hi all!

Today I want to express my point of view about this method of working with suppliers as dropshipping.
For all its apparent simplicity, this method has a huge number of disadvantages, which, at first glance, are not particularly striking.

First, let's look at what dropshipping is and why it is needed at all.

What is dropshipping?

Dropshipping is a method of working without your own warehouse, when you send goods directly from the supplier to the buyer, bypassing your warehouse.

In the diagram it looks like this:

The expanded diagram looks like this:

1. You receive an order from a buyer;
2. The buyer may pay for the order (options are possible here, since some suppliers are ready to take over the cash register);
3. You pay the goods to the supplier;
4. Provide the buyer’s coordinates to the supplier;
5. He sends the goods to the buyer;
6. The buyer is happy. The supplier is happy. You are happy too.

Ideal scheme. It would seem that…

Let's look at the pros and cons of dropshipping

Having found out what dropshipping is, let's understand what is more: pros or cons?
Here is my video in which I talk about the main pros and cons of dropshipping:

Pros of dropshipping

No. 1. Work completely without your own warehouse.

Indeed, you are working. And as soon as you receive an order, you immediately create a delivery request to the supplier and he then ships it to the buyer.

Saving:
Money, since there is no need to buy back the goods;
Time, since the order can be immediately sent by the supplier to the buyer;
And space, since you don’t have to look for a warehouse to store goods.

No. 2. Easy process of expanding the range.

This is true. The procedure is simple:
Connected a new supplier;
We uploaded its assortment to our website.

Again, there is no need to buy anything, since the work is carried out to order.

No. 3. Minimal startup investment

In the process of launching an online store, purchasing goods sometimes takes almost first place. And if you use dropshipping, then you simply do not have the costs of purchasing goods.

Actually, this is where the advantages of dropshipping end...

Cons of dropshipping

No. 1. Lack of any added value.
I have a more precise definition of what dropshipping is - This is the transportation of goods from the supplier to the buyer at the buyer's expense.

Essentially, by your presence you do not create any additional value. You don't even see the product. It’s a mystery to you what is actually going to the buyer, what quality is there, you can’t check anything at all :)

They took the money from the buyer, transferred it to the supplier, who sent it to the buyer, and you kept a pretty penny for yourself.

Yes, you will earn something. But such a business does not arouse any interest in me. I'll explain why a little later.

No. 2. You are responsible for things that you cannot directly influence.

This is where the main disadvantages of this work scheme lie.

The supplier sent the wrong thing - your fault.
The supplier sent a defective one - your fault.
The supplier sent it at the wrong time - your fault.
The supplier did not pack enough - your fault.
The supplier does not care whether the buyer buys/takes the parcel. After all, he has already received money from you.

If you had sent the goods yourself, all this could have been avoided.

No. 3. Almost always a 100% advance payment from the buyer is required.

After all, what else should you do if you bought an order from a supplier?

According to my statistics, up to 5% of buyers are ready to make a 100% advance payment, and then only in trusted online stores.
And if you have dropshipping from China, only a few will be ready to make an advance payment and wait a month for the package to arrive from the Middle Kingdom.

But there are exceptions when suppliers are ready to take on cash services and accept cash from the buyer. You should check this with your chosen suppliers.

No. 4. There is no possibility to customize the order.

And making it unique through your additional services or gifts.

Would you like to send a thank you note for your order? Will not work.
Would you like to add a gift to your order? Will not work.
Would you like to include your business card? And then too, by.

But these are some of the best growth methods that will not be available to you.

No. 5. It is unknown what else the supplier puts in the order.

There have been cases when at one point the supplier began to include his promotional materials in orders. Is it worth saying what this leads to?

You do not control what else is included in the buyer's order.
You won't even be able to check whether the item is being sent in your order.

Of course, you can try to order from yourself and see what actually comes to the buyer.

In justification, I will say that I have not seen anything like this from large suppliers for a long time, but there have been such cases in practice.

No. 6. Your customer base is not yours at all.

If you and your supplier part ways, there is no telling what will happen to your customer base.

Phone numbers, emails, names – all this is from your direct potential competitor. Especially if he himself is engaged in retail sales.
The entire order history of each customer is also available to your supplier.

We won't speculate, but just the fact that someone else has my client base leads me to certain negative thoughts.

No. 7. Packaging restrictions.

Suppliers most often use standard packaging without any frills.

And you will not have the opportunity to additionally pack fragile goods.
Or offer, for example, gift wrapping.

As you can see, there are continuous restrictions...

No. 8. You won't even be able to add a gift to your order.

I have already said many times that the simplest gift in an order significantly sets you apart from other online stores. Remember the last time someone gave you gifts from stores? Do you remember? Draw your own conclusions.

Don't put gifts.
A letter of gratitude too.

Let's summarize

I have already made conclusions for myself a long time ago. To me, dropshipping is a way to sell remotely without any added value on your part.

Well, they bought it, they sold it, they even earned something from it.

Boring.
Not interested.
Sad.

In business, what matters most is your game with the buyer:

1. Give something that others do not give;
2. Do something more that the buyer is not even aware of;
3. Give a gift that he will immediately post on Instagram to celebrate;
4. Include a letter of gratitude with the order, where you address the buyer by name and write a big “Thank you!” with a ballpoint pen;
5. And put it all in your branded package.

Such little things create a lot of positive emotions in the buyer. All. He's yours. Forever.

And the dropshipping scheme itself cuts everything in the bud.

Therefore, I am sure that by the end of the article you had the impression of what dropshipping really is and whether it is worth considering it at all in your project. I would not:)

But if you still want to go this route, I suggest discussing the start algorithm.

Algorithm for starting dropshipping

Let's imagine that you have already chosen a niche and found dropshipping suppliers.

Stage 1. You just launched

At the very beginning of your journey, you work entirely from the supplier’s warehouse and at the moment the main task for you is to determine which products are most popular among customers.

Let's start traffic and look:

1. What do customers order?
2. What products are most often asked for over the phone?
3. What products are the most viewed on the site? This will help you.

Having compiled a list of the most popular products, we move on to the next stage.

Stage 2. There is an understanding of what they are buying

Once you have compiled a list of the most popular products, you can think about purchasing them from the supplier's warehouse. Here your list of suppliers will be wider, since you no longer have the task of working specifically with a dropshipping supplier.

Divide this work also into several stages. If you have a small budget, buy items little by little. This way you will gradually gain confidence in your abilities.

Let's move on to the third stage.

Stage 3. Choosing a further development strategy

At this stage, you have most likely already accumulated some “fat” and this frees your hands somewhat.

1. You give up dropshipping completely, switching entirely to your own warehouse, albeit with a less wide range. But it gives you flexibility in making decisions.
2. You give up dropshipping completely, find a supplier who works “on deposit” and form your own small warehouse. And you order the missing items from a new supplier.

At the same time, nothing prevents you from keeping “in reserve” the old dropshipping supplier, thanks to whom you got on your feet.

This whole scheme is described from my own experience, but I assure you that not everything in it is so smooth. Each niche will have its own nuances and you can’t escape them. Verified :)

Personally, I disdain dropshipping and have not the slightest desire to fully work with it, despite successful examples.

This is a painfully flawed format.

Dropshipping. This sales system is a magnet for new online sellers. It is believed that dropshipping allows you to open an online store without investment, since you do not need money to purchase goods and their logistics. There are other advantages: creating a brand without a product, easy expansion of the range, etc. But is it? Is dropshipping really beneficial for a newbie webmaster? In this post: All the pros and cons of dropshipping, who really benefits from dropshipping, and so on.

The word “dropshipping” itself means “direct delivery”. This system allows you to sell physical goods without owning them. The seller (webmaster, let's call him that) attracts customers to his online store, accepts the order and transfers it to the supplier. The supplier, in turn, sends the order to the customer. Simply put, with dropshipping, you are actually selling someone else's products.

Beginning webmasters, anyone who wants to make money on the Internet, are promised that dropshipping allows them to enter sales “for free”, since no money is needed for the purchase of goods, their warehousing and logistics. Novice webmasters (more experienced ones are unlikely to do this) willingly believe in the promises of suppliers and all those who promote this system. However, is dropshipping really that good?

First, the advantages of dropshipping.

• You don’t need goods, which means you don’t need investments in purchasing, you don’t need warehouses and logistics. I agree with this, and this is the only rational grain of this scheme.
• You can sell other people's products under your own brand;
• It's easy to expand the range.

That's all. And, as we will see later, some of these supposed advantages hide a serious headache.

Now the disadvantages of dropshipping.

The main disadvantage of this system is that all the difficulties of the scheme begin to appear only when you dive into it and begin to collect all the pitfalls on your fledgling stern. I’ll start right with the third “plus” - expansion of the range.

I don’t argue, there is nothing easier than expanding the range with dropshipping. You just need to select a new product and add it to your store. But it may happen that the new product will already be from another supplier, which means you need to negotiate again, choose the best, and keep your finger on the pulse, since now you no longer have one supplier, but two. Imagine if you have a large store with a bunch of products, most likely this will mean collaborating with different suppliers and monitoring their actions. But this is already a jungle, let's first talk about the more obvious disadvantages of this system.

1. Everything is your fault.

By accepting an order, you will be promising the customer that you have excellent quality, fast delivery and excellent gift packaging. But the trouble is that with dropshipping, you don’t see the product, nor the supplier himself. And if the supplier sends a defective product, then you, as the seller, will be responsible for this. The buyer will call you.

2. You don't know what the supplier will put in the order.

3. You don't have the ability to upsell.

Upselling allows you to significantly increase the profit of an online store. The client placed an order with you, and you offer him an additional product at a discount. About 30% of clients are willing to upsell. Thus, you attract one client and sell two products, and the second sale is free for you, since you do not spend money on advertising this product. When dropshipping, implementing an upselling system is either difficult or impossible in principle, since it happens that the second product must be looked for from another supplier.

4. You are not valuable to the market.

A serious point that novice webmasters do not know about. The task of a good seller is not to sell a product; anyone can sell, and there are millions of them. A good salesman strives to be an exclusive seller, even if he sells the same thing as everyone else. To do this, he tries to come up with any feature that will allow him to stand out and differentiate himself from competitors. That is, in marketing language, he is trying to create his own USP (Unique Selling Proposition). It could be anything: special packaging, an additional gift for the client, or even a handwritten card.

Simple trading will no longer surprise anyone. Ordered, delivered, paid. Everyone is used to this, so a good seller always tries to give a little more. And if he succeeds, then the client is happy. And if he is happy, he tells his friends about the seller, posts photos on social networks, since he did not expect such care. And this, in turn, leads to a viral effect and brings in new customers, which means advertising is reduced significantly. And these clients become his clients for life. And when a good seller buys a new product and sends it to his base, they are the first to buy it, because he is great.

But, you cannot achieve this with dropshipping, since you do not have product interaction with the client. You are not the owner of your product, which means that all of the above can be done by your supplier, not you. Moreover, he will do this at your expense, but more on that below. With dropshipping, you are not valuable to the client or to the online market as a whole.

5. Pricing.

When dropshipping, in addition to the price of the product, you must make yourself a markup. This markup should cover advertising costs and leave you with a profit. But the trouble is that now, with developed context and retargeting technologies, after visiting one site, within an hour you begin to see advertisements for similar sites and products. In this case, there is a high probability that your client, having placed an order with you, will see your competitor’s store, only at the regular price, without a dropshipper’s markup. Guess whether he will buy your goods from the post office after this? And if one of the competitors dumps, that is, they openly lower the price. What can you do against him?

6. Your clients are not yours at all.

With dropshipping, you are essentially giving your customers to the supplier, because this is the essence of this system. It turns out that your supplier collects your entire customer base. Moreover, he collects it for free, and will be able to start interacting with them directly at any time.

7. Costs are inevitable.

This disadvantage is not obvious if you are a novice webmaster. After all, that’s what they lure you into, promising “free” entry into dropshipping. And I agree that you don’t need money for a product, but who told you that advertising on the Internet is free. Or do you already know how to massively attract targeted free traffic? If yes, then why do you need dropshipping?

But it is also advisable to test the product in order to understand what type of advertising is best suited for it. As a result, it turns out that dropshipping is a scheme with investments, and possibly considerable ones.

And I'm not even talking about dropshipping from China. If you intend to take up this variety, I advise you to think twice, since in addition to all of the above, there will be a couple more serious disadvantages.

Firstly, the timing.

People are willing to wait for delivery from China, but only when they know that the goods are coming from China. But you will have a Russian-language store, and the fact that the goods will come from China may come as a surprise to the buyer. Will he be willing to wait? Is not a fact. Secondly, prepayment.

As a result, we come to the conclusion that the dropshipping system is beneficial only to one party - the supplier. You buy goods from him, he doesn’t spend money on advertising, he’s not responsible for anything, plus he keeps your entire customer base.

Dropshipping is possible, but it can only be full-fledged if there is a large organized service, the departments of which will process orders, monitor the assortment, make payments to suppliers, and provide after-sales service. It is impossible for one person, especially a novice webmaster, to do this.

If you dream and see yourself in dropshipping, then wouldn’t it be easier to start affiliate programs (AP)? After all, dropshipping is essentially the same thing. Affiliate programs also do not require goods, procurement, warehouse and logistics. But unlike dropshipping, affiliate partnerships have a number of powerful advantages, such as:

• you don't need a store;
• you don’t bother taking orders;
• you are not responsible for quality;
• you receive a simple fixed reward, without increasing the price of the product.

All you need is a computer and the ability to attract targeted traffic, the cheaper the better.

Everyone who earns income from the Internet knows very well:

It doesn’t matter what type of business you are engaged in on the Internet, the main thing is to be able to attract TRAFFIC.

Traffic is orders, clients, views, visitors, viewers, subscribers, etc. Traffic is people who will come to you. It doesn’t matter what you do, if you don’t have traffic, then there’s no point in anything, whether you have dropshipping, affiliate programs, or your own store.

• to know, ;
• understand what exactly you want, what direction you are most interested in pursuing;
• study this direction (type of business), begin to slowly build it.

Take a look, you might find something for yourself.