What is Dropshipping?
With eCommerce booming, everyone wants to sell online. But setting up an eCommerce business is not easy. Identifying products, sourcing them, keeping track of inventory, warehousing and handling the logistics should all be taken care of. It deters many from taking the plunge into eCommerce. For many entrepreneurs dropshipping is a good option to start light and easy.
Dropshipping is an online business model that requires little investment. With dropshipping, you can start an eCommerce business without keeping products in stock. It works like this – when your store sells a product, you pass the purchase order to a reliable third-party supplier who then completes the order fulfillment process.
How does it work?
The first step is to identify reliable suppliers or manufacturers of the products you want to sell on your eCommerce site. With dropshipping you are buying products in bulk at wholesale prices but the inventory is maintained by the supplier at his warehouse. You are then free to add a margin, set a retail price for the product and list it on your store. While appearing very simple, this model has its advantages and disadvantages.
- The entry barrier is low. You can start a dropshipping business with very little capital.
- It’s relatively easy to scale your business because you don’t have to rent warehousing capacity or hire people to manage the inventory.
- Allows you to enter new product categories without much risk.
- Most often you do not have exclusive deals with suppliers, meaning that you will be competing with a lot of other resellers, including potentially the supplier itself. This results in very low margins.
- You cannot have a hands-off approach while running a dropshipping business. You will have a long list of suppliers to handle, process and forward orders to, as well as keep track of returns and be responsible for customer service.
- You have very little control over product quality and fulfillment process, both of which are critical in any eCommerce business.
Commerce Platforms most suitable for Dropshipping
Now that you have made up your mind to set up a dropshipping business, the next step is to choose a platform to build your eCommerce site. In the coming section we shall explore the various options available and identify the pros and cons of each of them so that it becomes easy for you to evaluate and choose one.
Shopify is one of the most sought after options for dropshipping. It is incredibly easy to use and does not require any design and coding skills. The drag and drop functionality in Shopify allows you to configure and get started with your dropshipping store quickly.
The success of your store depends a lot on how well you can integrate it with third-party plugins that enable dropshipping. An advantage of Shopify is that it comes with pre-installed apps and plugins for dropshipping. With these apps you can get connected to thousands of dropshipping suppliers and manufacturers in a matter of minutes. Oberlo is a full-fledged marketplace developed by Shopify exclusively for its customers – a virtual warehouse that features millions of products from suppliers around the world. With Oberlo you can identify suppliers and products to sell and connect them to your store with just one click. Oberlo even allows you to choose products from AliExpress, Alibaba’s dropshipping service, import them into Oberlo and link them with your store. On receiving an order, Oberlo automatically sends out an order fulfillment request to the supplier.
The Shopify marketplace also has a large number of third-party plugins for dropshipping. These plugins enable you to easily import products from your supplier’s list into your store. They also provide the required store analytics to manage and market your products better. One of the popular dropshipping plugins featured on the Shopify marketplace is Dropified. It connects you with AliExpress and helps you automate your entire dropshipping business.
Modalyst and Spocket are a few other online merchant marketplaces that you have access to in Shopify.
One disadvantage of Shopify is that there are a few restrictions on the kind of products that you can sell on a Shopify store, especially if you are using Shopify’s Payment System. E-cigarettes, pharmaceutical products, goods that have an age restriction are a few of them. So choose your niche accordingly.
Prominent dropshipping stores on Shopify
One of the main reasons people choose WooCommerce for dropshipping is the price factor – both WordPress and WooCommerce plugins are 100% free. So if you are looking to start a dropshipping business on a limited budget, then WoCommerce is for you. Also, unlike Shopify, there are no restrictions on the kind of products you can sell on WooCommerce.
WooCommerce comes built-in with a default product management system that allows you to add products to your site easily. This is most useful when you are identifying suppliers on your own and getting into individual agreements with them. Another option is to buy from large dropshippers like AliExpress by installing a WooCommerce dropshipping plugin that will automate the whole process for you.
WooCommerce has developed the WooDropship plugin which comes with a 7-day free trial, after which you will need to opt for a paid plan of $14 per month. WooCommerce also has a solution called the WooCommerce Dropshipping Suppliers Pro that helps you manage different suppliers easily and effectively.
You also have access to several WordPress dropshipping plugins: DropshipMe, AliDropShip and WP Amazon Shop (an Amazon affiliate) are a few of the popular options.
Prominent dropshipping stores on WooCommerce
You can integrate your BigCommerce store to AliExpress using BigCommerce AliExpress Dropshipping which allows you to import products from AliExpress product page to your BigCommerce store easily. A custom-built AliExpress Importer Chrome Browser Extension is also available on the Chrome extension store.
In BigCommerce you can also do dropshipping by installing a third-party app – AliExpress Dropshipping by Webkul, Appfreak, Printful, Spreadr, Sunrise, Wholesale2B, etc. are some of the options available on the BigCommerce Marketplace.
Modalyst is yet another popular dropshipping software used by merchants in BigCommerce. It allows you to list products, import product images, descriptions and prices with a single click. The feature that differentiates Modalyst from other players is the Automatic Inventory Syncing that automatically updates the inventory status in your BigCommerce store and the supplier system so that you don’t end up overselling products that are out of stock.
Another tool worth trying is Spocket – an online merchant marketplace that has tied up with BigCommerce for dropshipping.
While there are quite a few options available for dropshipping on BigCommerce, the general feedback is that it is not very easy to use for beginners. However, it comes with built-in advanced features that make it a preferred platform among the tech-savvy players.
Prominent dropshipping stores on BigCommerce
There are quite a few dropshipping extensions available in the Magento Marketplace for both Magento 1 and 2. These extensions allow you to select and process all your orders from one platform. uDropship for Magento 1 and 2, Dropship by Webkul, AliExpress Dropshipping by CedCommerce are a few of them. However, the drawback of Magento eCommerce platform is that it is not very user-friendly and you will need the help of a professional developer to set up your dropshipping store, identify suppliers, select products and integrate them with the shopping cart. The back-end of the Magento platform is very technical, and you will need to have internal resources who have the technical knowledge and are proficient with the Magento platform to run the store smoothly.
Prominent dropshipping stores on Magento
Opencart also has many plugins for dropshipping. Opencart Extension Store has multiple third-party extensions – AliExpress Dropship is one of the most popular ones. With this module you can start importing products from AliExpress to your Opencart store one by one or in bulk. The admin can place the order at AliExpress and make payments with a single click.
Opencart is a self-hosted eCommerce platform and hence it lags behind Shopify and BigCommerce in technical support. They do not offer 24/7 support, which is critical, especially if you are a beginner setting up your dropshipping business.
Prominent dropshipping stores on Opencart
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