Dropshipping is a system of working for an online shop in which goods are sent directly from the manufacturer or supplier to the buyer. Dropshipping is essentially an intermediary.
In this system, the intermediary finds the buyer, the seller and provides communication between them through its platform. You create an online shop, which is really an electronic shop window. You do not have to buy the goods yourself. You use advertising to promote the supplier's goods on your site, and when the customer buys the goods, you simply accept payment. Delivery is organised by the supplier.
The main advantage of this system is that there are no costs for purchasing goods. The entrepreneur does not need any start-up capital to buy the first batch of products. He pays for it with the customer's money. He keeps the difference between the purchase price and the final price.
Stages of organising a dropshipping business
It all sounds simple in theory. But in practice, the system has to be worked out in detail. That is why it is important to take a responsible approach to each stage of setting up a dropshipping business.
Study the market and define the niche. You may not want to work in areas where there is a lot of competition. Then try to offer the customer something truly new and unique. In areas where there are not many competitors, it is necessary to analyse the market thoroughly.
Create an online shop. The first time a customer visits an online marketplace, he or she is less interested in prices than in a convenient interface and attractive design. Your income will depend on conversion - the ratio of the total number of visitors to the number of actual buyers. To achieve this, you need to identify your target audience in advance and fill your site with content that will appeal to them.
Test the niche. This is an important point that will determine the prospects of your chosen direction or its absence.
Find suppliers. This is the most important and difficult part of the dropshipping system.
Negotiate and sign contracts with suppliers. Study their documents, details and contacts. Never work with dubious partners.
Start promoting the online shop. This is a prerequisite for success in e-commerce.
How to find a supplier
We have already said that the most important step is to find suppliers who will be the reliable mainstay of your dropshipping business. You can look for them yourself, then you will have all the responsibility and burden. Alternatively, you can leave it to the professionals who will select the best and most reliable suppliers, help you negotiate and bring them to contract.
Independent search
The first and easiest way is to use unregulated suppliers. For example, AliExpress, Banggood and the like. Here you have to try hard to find fast delivery and good quality goods. Shipping from China usually takes a very long time. The vast majority of customers will not want to wait a whole month for their goods. In addition, these sites do not allow you to contact the supplier and agree individual terms.
You can also use services such as supplier directories. They take many of the problems out of the hands of the dropshipper in terms of product selection and delivery. A single site can list thousands of suppliers and hundreds of thousands of products. Usually, such resources have trusted suppliers operating in different countries in Europe and other continents. Therefore, delivery takes only a few days.
When searching for goods, you can use many sorting options, for example, you can choose the top sellers on different sites such as Amazon, eBay and others. You can also download product card files from these sources to upload to your website.
Professional sourcing
The second way to find suppliers is to use professionals. What is the advantage? You continue to deal with other issues related to the organisation and running of your business, while professionals select suppliers according to the criteria you specify.
Arabesco sideral unipessoal lda, for example, offers a comprehensive sourcing service. It is based on our proprietary methodology for effective supplier, product and customer data management. Our team will help you analyse the market and gather up-to-date information on products and delivery terms. We will also use specialised tools and modern methods to find out: if the counterparty is genuine, how compliant they are, if their prices are competitive, if they have the declared goods in stock, if they offer guarantees. Arabesco's specialists will help you prepare for negotiations, carry out preliminary telephone consultations and discuss the details of the forthcoming transaction. We can also represent you in the negotiations.