In recent years, we have heard more and more about dropshipping in the world of e-commerce. Faced with such success, many entrepreneurs have taken the plunge by opening a merchant site using this technique alone. Are you also tempted? Before adopting it, it should be understood that this is not a miracle recipe. And that in addition to the qualities it is given, dropshipping also has some flaws. Better to know where you put your feet before jumping.
Dropshipping (which will be translated into French as “direct delivery”) is an online business model based on the intervention of three actors: the seller, the supplier and the customer. To better understand this system, it is necessary to detail the three main stages of the process:
1- The customer buys a product on an e-commerce site
2- The seller, represented by the site, places an order with a supplier
3- The supplier is responsible for sending the product to the customer
Contrary to the operation of a classic e-commerce site, the e-commerce site using dropshipping therefore does not have to manage stocks. He is only an intermediary between the customer and the supplier.
Here is a list of all the advantages of dropshipping for the seller:
1- A minimal initial investment
The main advantage of sellers who turn to dropshipping is that this solution is the most accessible. And for good reason, the only expense to be made concerns the creation of the website. The solution is ready made. All that remains is to supply your online store using the Oberlo app. It is an application that allows the seller to quickly and easily import the dropshipping products into their online store and ship them directly to their customers with just a few clicks. Ultra versatile, this application is also available for supplying all Shopify online stores. Its supply, meanwhile, happens exclusively from Aliexpress.
2- A wide variety of products
With the alternatives that dropshipping offers, you don’t have to manage inventory. This therefore offers greater freedom in the choice of products to sell. But this possibility can also be a trap. So you have to be careful to stay consistent and not sell anything and everything.
3- Good scalability
In startups, scalability refers to the company’s ability to adapt supply to demand. Thanks to dropshipping, the supplier is the first and only responsible for variations in demand.
But this method also has a number of disadvantages:
1- A limited margin
A significant disadvantage: the difficulty of profiting from strong margins on the sale. To overcome this concern, it is necessary to find the least competitive product niche.
2- Dependence on the supplier
As you will have understood from its concept, dropshipping requires a certain expense towards the supplier. Moreover, in the event of errors committed by the latter, the fault lies with you with regard to the customers.