There are “pro-dropshippers” in India who are minting millions a year running their online stores. Want a slice of it and start your own dropshipping store? Now is the right time and here’s how you can start.
The notification sound meant just one thing- another incoming order.
It was quite a hectic day for Rohit. His humble electronics shop was flourishing. The latest designs for mobile phone cases had clicked. Orders were pouring in. He proceeded to enter the new order details in the platform, and done!
The platform took care of notifying the dealer and soon enough, the prepping & dispatching of the order would begin.
You know the best part?
Rohit runs his electronics store online. Not a penny for infrastructure investment. Not a dime for maintaining an inventory of products and securing it. All he used was an active internet connection, a laptop, and a couple of online platforms to boost his e-commerce dreams.
Now, that was the introduction to this blog; let me move on to the rest. Wait, you must be wondering why there’s no mention of dropshipping in the introduction of a blog that promised the A-Z of it.
Remember the instant where Rohit contacted a wholesaler and passed on the order? This is the very concept of dropshipping.
What is Dropshipping?
Dropping can be defined as an e-commerce business model or a retail process where a business owner has no inventory of products in their possession. Instead, they purchase a product ‘on demand’ i.e., when a customer places an order.
This retail strategy works wonders when an e-commercer is just setting out and doesn’t have a huge budget to buy products for wholesale and maintain the same. In this retail fulfillment method, the product is directly shipped to the customer by the third party/agent/wholesaler.
In conclusion, the retailer doesn’t directly handle the product, just facilitates it for the delivery. More than often, their main involvement would be interacting with the customer- right from purchase, supporting them for any queries, or addressing complaints.
How Can You Make Money With Dropshipping?
According to stats by TorchBankz,
Dropshippers Can Earn More Than 50% Profit Than Those Who Keep Their Own Stock Inventory.
When you come to think of it, the math does sound about right, isn’t it? The investment, when it comes to, inventory & maintenance is no child’s play. If you’re dealing with items such as perishable goods, the risk is even higher.
The numbers that calculators display would be enough to bring second thoughts for any retailer who wishes to start their own e-commerce business. This is where dropshipping has turned out to be quite a game-changing retail strategy. Minimal risk, maximum returns.
There are many platforms out there that make dropshipping breezy. So, the ease of getting started shouldn’t let you break a sweat. We’ll talk more about it in the following sections.
Once you decide to dropship your e-commerce venture, you can be a part-time or full-time dropshipper. The success of the venture would depend quite a bit on the product varieties chosen and the network of retailers you maintain.
While setting out, it is generally advised to focus on a niche and then build up from there. Why? In this manner, you can tackle competition like Batman dealt with Joker.
P.S. Rohit followed something similar as well. He shifted a lot of focus on mobile phone cases at first before building his way around the rest of the accessories with time.
The Dropshipping Process: Key Steps
We can break down the key steps associated with dropshipping into 4.
Step 1: A customer places an order on your store, most commonly an online one.
Step 2: As a dropshipper, you pass on the order & product details to your wholesaler. It could be a single merchant or you could have a network of suppliers.
Step 3: The wholesaler/supplier processes the order and proceeds for package & shipping.
Step 4: The order is directly delivered to the customer
How Can You Start Dropshipping
Let’s be honest. It’s very easy to start a dropshipping business.
Thanks, to modern online platforms like Dukaan. However, as a product curator or a dropshipper, it’s no easy feat to earn the numbers that’d make you smile. The competition is fierce like any other exponentially growing domain and this makes it all the more important to test the waters before you tread in.
You can either pursue it part-time or step in full-time as an e-commerce entrepreneur. Let’s try to understand how we can approach dropshipping to help you have a great start and then build on the business gradually.
1: Setting it up
- Niche Products: Due Market Research
- When you start off, it’s best to choose a category and work on niche products. The competitive market will be less ruthless, then. Also, you’ll get an idea about how customers respond and the overall market weather.
- Assess your competition
- Yeah yeah, keep your friends close, enemies closer, and competitors closest. Not to get inspired, but to know if you’re missing out on anything crucial.
- Suppliers: The Hunt Begins
- Don’t go with any random supplier that comes your way; cherry-pick instead. After all the product quality and shipping responsibility is upon them. A blot can damage your reputation as an e-commerce brand. Many dropshipping platforms are available that will help you in this process.
- Go LIVE!
- You’re ready to go live with your online store. Run a couple of test runs, keep a close watch on delivery timelines, product quality, and customer feedback.
2: Legal Advice & Formalities
Since we’d be covering this in detail in the upcoming blogs, I’m leaving this comparison table to give you a fair overview.
- Choosing a business model
- You could register your e-commerce business as a sole proprietorship, LLC, or S Corp. It’s best to have a lawyer who can aid you legally and an accountant financially.
- Licenses, tax, registrations
- It’s important to keep these factors in mind to prevent landing your business in any soup. There are business licenses to acquire, sales taxes to understand and pay, and business identification registrations such as Taxpayer Identification Number (TIN) and Employer Identification Number (EIN).
Current Dropshipping Platforms: The Good, Bad, & Ugly
Although we aren’t going to run a fine-toothed comb review on the platforms for dropshipping, let’s see the best and not-so-great aspects, now.
Some of the most popular dropshipping platforms include:
- These platforms make it easy to get started with an e-commerce venture or dropshipping business.
- You can get exposure to a global audience with hundreds of thousands of customers browsing for products every minute.
- Most of these platforms come with a user-friendly interface that doesn’t require extensive tech knowledge and programming capabilities.
You can create an online store in under a minute on Dukaan. You don’t need to have the technical knowledge or other skills. Neither do you need web design help or hosting requirements.
Download the app, give the store name & category, upload pictures of your product and you’re done!
The Bad & Ugly
- It’s like the blessing is the curse itself.
The competitions on these platforms are a lot to tackle. There could, no let’s make that will; there will be many dropshippers who sell the same products as yours at much lower pricing. Now, let’s imagine from a customer’s POV. The same product at two different prices. Where do you think they’ll flock to? 11 out of 10 times, not yours.
- It’s hard to put across your brand image on most of these platforms.
In most likelihood, a customer cannot even recall who they purchased a product from. I mean, it’s the same with all of us, isn’t it? When someone asks you where you got your quirky office desk stationery, what would you answer? Amazon or the name of the store/dropshipper? I rest my case.
- Many platforms come with a paid version that offers the best features only at a higher plan.
Even if there are free tools, it could come with its own set of drawbacks as features.
Is Dropshipping Legal In India?
One word. Absolutely.
Dropshipping is every bit a legal business in India. You don’t have to feel like Vito Corleone or Micheal Corleone every time an order comes in. (Honestly, that’d have been a bit cool, isn’t it?)
Don Corleone has a point. Maybe you can adopt the same so customers pick your product over competitors.
Profitable Dropshipping Categories/Products
We’ll give a brief overview of the top products that get the dropshipping business live and throttling. To make it easier, let’s divide it into different categories. It would make it easier for you to skim to the one of your choice, in case it’s here.
- Electronics accessories
- Beauty & Healthcare
- Lifestyle & Decor
- Gaming Headsets
- USB chargers
- Bluetooth speakers
- Bluetooth headphones
- Fitness trackers
- Phone covers
Beauty & Healthcare
- Hair serums
- Beard oils
- Anti-aging creams
- Exercise belts & accessories
- Yoga mats
Gadgets & Appliances
- Smartwatches & normal watches
- Smoothie blenders
- Rice cookers
- Electric Massager
- Air Fryers
Lifestyle & Decor
- Organic Teas
- Baby carriers & products
- Home decoration items. Eg., fairy lights
- Welcome mats
- Wall art and stickers
The Advantages of Dropshipping
We’re outlining some of the well-known advantages of dropshipping.
Since the dropshipper is not stocking any products in bulk, the risk of wastage or un-selling doesn’t happen. This is particularly useful in the case of perishable goods such as eatables or products with low shelf life. Moreover, the volatile nature of the market poses the risk of certain products losing demand.
One of the prominent merits of adopting dropshipping as your retail strategy is the low investment associated. Setting up and maintaining an inventory of products can be a costly affair, especially while scaling up. For an entrepreneur who’s starting new, this could be quite overwhelming. They can instead, switch to dropshipping and use that investment for marketing or customer acquisition.
Flexibility & Convenience of Operations
You can set up an online store and run it anywhere across the globe. The physical location of your store has nothing to do with where your suppliers are located. This is particularly important because a lot of risk and money is involved while dispersing products to a warehouse.
Scope to Test Waters & Iterate
The possibility to test the success of certain products and retract the non-performing ones is a great advantage that any entrepreneur can leverage. However, having a full-stocked inventory does not help in this case. On the other hand, dropshipping resolves this issue.
Product & Inventory Diversity
Since the inventory is not fixed in the case of the dropshipping model, there’s higher scope to include a multitude of products and make your inventory diverse. In this manner, it’s easy for you as a dropshipper to scale the business as and when required.
Ease of Setting-up
There are many platforms out there that help you set up your online store easily. And, we have already covered some commonly used e-commerce platforms in the previous sections. In addition, these platforms help you stay connected with suppliers easily and keep tabs on the status of each order as well.
When Is Dropshipping Not A Good Idea
The other side of the coin. Dropshipping needn’t always be a dreamy affair.
The following are the things to keep in mind and overcome, should they come your way.
Lower Profit Margins
You save the inventory cost, yes. And, you earn a profit from every order you pass onto the supplier from the customer. However, this margin isn’t considerably impressive since the majority of the income goes to the supplier.
For example, if a customer pays you Rs 300 for a product that you get at Rs 250 from your supplier, your margin is just 50. Not that it’s bad. However, to get a good number as your profit margin, you’ll have to really go aggressive with orders. This may not be possible for many dropshippers, especially ones specializing in competitive niches. If not you, the customer goes to someone else who offers it at an even lower price.
The brand visibility when you opt for dropshipping is significantly lesser compared to opening your own online store and running the show. Like I’d mentioned before, customers are likely to think of the platform over a brand; unless they are big shots. If you’re looking to expand and evolve as a brand, this could be a major challenge in your marketing efforts.
Wrath & Furious: Customer Edition
Wrath & Furious- I, II, III… it could go on and on just like Dominic Toretto and team. Even if the supplier makes an error, the customer would turn to only you for clarifications and support. You are at the receiving end of things. Very often, you could stumble across bad suppliers who put you in this place. Consequently, you could end up with some bad reviews which can avalanche to destroy the credibility and reputation.
The suppliers you connect with will most probably have many other dropshippers who offer similar products as yours. There could be days where the inventory runs out of products and it could have a domino effect where you could lose a visitor and a potential order. Moreover, it could be a challenge to keep a close tab on the available products, their quantity, and furnish that information to your customers.
Although not common, we thought it’d be good to include this in the list as a fair warning. Remember when we said to cherry-pick your suppliers? It’s not just about product quality. If your supplier is involved in any illegal activity as a part of business, as a vendor, you could be held liable too. Maybe not all the time, the risk still persists. I needn’t reiterate the hassles of lawsuits.
Now, let’s take a look at some of the best-known dropshipping platforms. We’ll cover more in the upcoming blogs so consider them as a brief overview.
Dropshipping: International Vs National
Let’s take an example of dropshipping from India to the US. To start off, you’ll need a GST registration and an Indian bank account, and an international payment gateway such as PayPal to accept international payments. The GST will be applicable on the income you earn out of the business.
Platforms such as AliExpress help you to cross the borders and sell worldwide with a feature known as ePacket Delivery. However, the delivery time is something that’s debated.
Dropshipping with AliExpress
AliExpress is one of the popular e-commerce platforms dedicated to e-commerce entrepreneurs that’s simple, hassle-free, and comes at a low cost. After adding the products and images from their website to yours, you can proceed to add your custom price and sell.
Image Source – Alidropship.com
Dropshipping with Alibaba
Alibaba is credited as the world’s largest e-commerce company. When we look at the numbers, it stands at a combined worth of both eBay and Amazon. Well, woah.
Needless to say, it has a diverse inventory with hundreds of thousands of products and has a strong network of suppliers and customers who purchase from all around the globe.
Dropshipping with Amazon
Amazon welcomes millions of customers each day with transactions buzzing every second. After you signup and choose the product you wish to sell, you can create a listing on Amazon and get started.
How Dropshipping Is Easier With Dukaan
Where there’s a store, there’s Dukaan.
Okay, that was cheesy I know. But, there’s no better way I could have put it.
Stats by Torchbankz tells us that,
- 84% of eCommerce retailers cite the initial stages of finding and securing a good supplier to be the biggest obstacle to getting their business going
- 66% of online shoppers will buy from your competition if they offer more shipping options
We understand that it can be tough for an e-commerce entrepreneur, and this is exactly why we’d love to do our bit to help your business take off.
Let’s see how!
Set up your Dropshipping Business with Dukaan!
Enter the name of your business and the category, upload pics of your products and your store is ready!
Set up your bank account details so that you get paid instantly on delivery.
If you have suppliers’ information, like product pictures, details, etc, add them to your store.
Now promote your store like anything. Facebook Ads, WhatsApp stories (available within Dukaan itself), whatever channel you can think of that will give you customers.
Use the custom domain to share with your customers across social media platforms such as Whatsapp, Facebook, Instagram, or Twitter. Your customers upon visiting the link will be able to see the listing and place their orders.
Sit back, relax and enjoy the sales.
Why dropshipping is the Future
According to the Ministry of Commerce & Industry, Govt of India, the Indian e-commerce market was valued at USD 38.5 billion in 2017 and is expected to grow to USD 200.0 billion by 2026, at a CAGR of 51.0%.
I do know who you are, and I do know what you want.
As a dropshipper, what I do have is a particular set of skills.
I will find you, and I will complete your order!
As e-commerce grows at such an exponential rate, it’s up to e-commerce business owners to stand out in front of their customers and provide a memorable experience journey.
We’d love to be a part of that journey with you.