A very common adopted business model adopted in India is Drop-shipping and also in a booming phase with the rise of e-commerce stores. Now, online stores have made space for themselves after the Covid pandemic. Nowadays people prefer to shop online to avoid the local market or shopping malls. Drop-shipping in India is the booming stage and more growth will come.
What is drop-shipping actually, drop-shipping is an order fulfillment method that does not require a business to keep products in stock. Instead, the store sells the product, and passes on the sales order to a third-party supplier, who then ships the order to the customer.
In India, there is fake hype, that you can earn money easily through dropshipping. You sell other people’s goods and make a profit for yourself, but in reality, when you face all the day-to-day management, drawbacks, obstacles, then you get the experience of dropshipping.
The next question that comes to mind is how to start a drop-shipping business. But before, that there you have to know the advantages & disadvantages of being in the drop-shipping business.
# Disadvantages of drop-shipping
Nowadays, dropshipping is sounds like a very attractive business model for those who want to start with an online store, or for those looking to expand their existing product offerings. But, drop-shipping has its downsides, too. Here are a few points you must consider.
# Low margins
First low margins are the biggest disadvantage of dropshipping business. Because it’s so easy to get started, and the overhead costs are so minimal, many competing stores will set up shop and sell items at factory rates in an attempt to grow revenue.
Since you are investing so little in getting the business started, they earn only operating costs. So, you have to invest some competitive amount of money to start this business successfully.
# Inventory issues
If you are planning to start your business with your own products, it’s relatively simple to keep a record of inventory. But when you also selected products from multiple warehouses and those are also fulfilling orders for other merchants, then the inventory changed daily. Fortunately, these days, there are a handful of apps that let you sync with suppliers. Real-time inventory update from the supplier side. This is another big issue for smooth supply.
# Shipping complexities
If you work with multiple suppliers—as most dropshippers do—the products on your online store will be sourced through a number of different dropshippers. This complicates your shipping costs.
Let’s say a customer places an order for three items, all of which are available only from separate suppliers. You’ll incur three separate shipping charges for sending each item to the customer, but it’s probably not wise to pass this charge along to the customer, and even when it does make sense to include these charges, automating these calculations can be difficult.
# Limited customization and branding
Sometimes custom orders for custom-made products or print, but dropshipping doesn’t give you a lot of control over the product. Because usually the product is designed and branded by the original manufacturer/supplier.
Sometimes custom-made products or additions to the product itself usually require a minimum order quantity to make it viable and affordable for the manufacturer.
5 Benefits of Dropshipping
# Increase customers
Wholesale customers can display your products in their physical or online stores, and market your products directly to their line of customers. As online business owners, you will be able to indirectly expand your market and reach more customers; otherwise, you would not be able to have if you haven’t partnered with wholesale buyers.
According to experts “Dropshipping has a number of advantages namely reduced risk, lower capital, wide product selection, highly scalable and location independence.”
#Save on money, time and effort
Working with wholesale customers that already have a solid base of customers will save you a lot of time, money, and effort.
“Initially people those starting their first online business via online stores, are not investing a lot of money to buy a bunch of products or the space to warehouse and store the products.
Initially, find the wholesaler who has the products you want to sell then you can work with minimum investment. Then, he will give you access to their product images so that you can post them on your website, blog, or any platform where you plan to sell online. When a customer orders the product, the same order you have to forward to wholesaler then he will be shipped it to your customer".
# Flexibility
The dropshipping model offers flexibility that would not be possible in other online business models. Wholesale merchants can run the business anywhere and anytime as long as they have an Internet connection. The buyers can directly communicate with manufacturers or store owners at the same time with customers.
It gives flexibility to merchants since they can partner with multiple wholesale suppliers and sell more products to their customers. Manufacturers also get more flexibility since there is more product movement.
#Leverage
In business, being able to multiply your money, time and effort is leverage. By offering dropshipping to wholesale customers, you’ll be able to prioritize establishing relationships with these buyers. Having dependable dropship wholesalers who will do the shipping for you balances the burden between the merchant and the supplier.
#How you can start
your own dropshipping business in India step-wise:-
Step 1: Pick a
Supplier
Choosing the right seller for your business is a crucial task. Even, if you have to spend some days completing this first step, please do. If this goes wrong, there’ll be no point regretting later. Your chosen supplier should be trustworthy because mostly your stock activities will be monitored by this supplier.
In India, there are a lot of suppliers but have to select a reliable supplier to start dropshipping. There are tons of fake sellers so beware. You can look at these signs of caution:
1. The supplier should manufacture the products too. It should not happen that the supplier himself uses some third-party manufacturer’s services. It will be a long chain then which will be very difficult for you to track.
2. Study the profit margins that you can make with the suppliers. Since you’re just started the business so consider the price quoted by your suppliers, set your own prices keeping a healthy margin on all products. Obviously, the higher the margins, the higher will be your profits.
3. Check what delivery time does the supplier promises. The reputed online stores deliver in a day, you have to take the responsibility of delivering in at least 3-4 days because no customer will be ready to wait beyond that time.
4. Does your supplier provide white-label products for your customers? White-label products mean that the products will be manufactured and packaged under your brand name. This is a brownie point for you because your customer will expect the product to be coming from your store with the particulars of your brand ONLY.
5. Your supplier can charge you in a number of ways. They may ask you for a one-time setup fee in the beginning and then per order, which tells that the supplier is trustworthy. They can also ask for a fixed monthly subscription. Some suppliers also ask for a minimum purchase order just to separate the serious sellers from others.
Step 2: Decide your products to sell
Do a market survey before choosing products. Then select the supplier according to your product, you’ll have to go through scrutinizing them to see if they suit your brand.
So, once you fix your supplier, browse their products and talk to them to discover about the best-selling products they have.
Step 3: Get your
GSTIN
Starting a dropshipping business in India as an individual just gets your GST and starts your e-commerce business. If you are a registered company, provide your GSTIN to the supplier for all the transactions so that you can claim the input credit later.
Before starting up with any supplier, clarify the GST requirements with them to stay guarded against any legal issues that may occur in the future.
Step 4: Design a website for your store
Starting an online business you need a responsive and beautifully designed e-commerce website for your store. Remember that your website should not look ugly and haphazard.
The visitor who visits your website for the first time should get an impression of the high-quality products you sell. Your website design and all the content throughout the website should speak of your authenticity and trustworthiness. Just don’t overdo it.
The next important part is to provide all the modes of payment that you can and keep your technical side strong to manage your store because that’s the only thing you have in your hand in dropshipping business.
Step 5: List your
products and market
Now, for listing the products in your store, try sharing all the relevant details of the products with the customers. Ask your seller for product images for variations to increase options and chances of selling. Once you’ve listed your products, move on to market your brand and take this as a game-changer step.
Good marketing is also a part of generating great demand for products through social media and other modes of advertisements like Google AdWords to get buyers for your products. If you actually do this right, I assure you the business will run smoothly.
Conclusion
Your new business or e-commerce store may or may not get instantly famous among your audience, so be patient and make the right moves. If your first products couldn’t sell well, there could be a lot of different reasons like bad marketing, wrong product choices, wrong audience, lack of variety, boring website and media messages, bad customer care service and the list can go on.
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