What is Dropshipping?.

The 21st century has changed the way we communicate, our needs, the difficulty of obtaining information, but most importantly, the way we buy things. Physical commerce will never go out of fashion, but E-commerce started to become relevant, and at this moment it is the Dropshipping companies ....

Do you really know what Dropshipping is? If you don't know, let us tell you about this business model, its advantages, disadvantages and how to do it.

What is Dropshipping?

The Dropshipping is a type of e-commerce, which does not purchase products from a wholesaler and then sell them, but upon receipt of a purchase, the shop purchases the product from a third party and delivers it directly to the buyer. In other words, it is a shop without stock (stocked products) and relies on third party stock to generate the sale.

Because in this business model there is no stock and only one websiteThe levels of investment are practically nil compared to other e-commerce sites selling the same product.

Is an affiliate programme and Dropshipping the same thing?

These business models may seem similar, but the truth is that they are totally different. The affiliate programmes are based on the promotion of a product or service of a specific shop, which will give you a small commission for each purchase made by customers with some kind of code you have. In contrast, in the Dropshipping you can determine the profit margin you want, you can choose the supplier of the product and you don't have to invest anything.

Advantages and disadvantages of Dropshipping

Every type of business has advantages, disadvantages and risks, but we consider dropshipping to be one of the best business models at the moment if you want to raise capital to start another business. The main advantages of Dropshipping are:

• The risks of failure are nil because the only investment is to buy a domain, a paid CMS theme and a hosting service.
• The logistics is Just in Time, i.e. you don't have stock and you will only order products when you have already ordered them.
• You don't need to spend money on hiring staff, because this business could be run by one person without any problems.
• You can diversify your product portfolio at no cost, and broaden your target audience.

On the other hand, the main disadvantages are:

• Because you have no stock, your economic activity depends 100% on a third party.
• You should invest a good part of the revenue in SEO, SEM or some other marketing strategy to position yourself better in search engine results (SERPs)
• You won't get rich overnight, because the profit margins are not that high because this is a very competitive sector.
• If the retailer holding the stock does not offer shipping, you have to arrange it yourself and it can be time consuming.

Can I use my e-commerce to do Dropshipping?

Of course you can use your own personal e-commerce to offer the products you want, because if things don't work out as expected, you can stop offering products by Dropshipping with just one click. Of course, don't mix these two businesses, and always evaluate the performance of these businesses separately.

Spocket is a dropshipping marketplace that allows retailers to start and scale their online shops. Spocket connects retailers with thousands of suppliers, most of which are located in the US and EU. Spocket offers several subscription plans, including a free dropshipping subscription.

AliExpress is a wholesale and dropshipping platform that connects dropshippers with suppliers and products. The platform offers millions of products from suppliers in 40 niche categories, such as electronics and clothing. AliExpress also offers free registration.