Why Dropshipping Is Changing Ecommerce For The Better

The landscape of ecommerce has been transformed in recent years, with a constant stream of new businesses seeking to make their mark, and join the growing trend of online enterprise. Now, with the rise of dropshipping, setting up an online business has become even more accessible, paving the way for a new wave of e-commerce entrepreneurs.

On one hand, some retailers may be concerned that this surge in competition could be harmful to their business. However, while dropshipping is straightforward to get into, it is by no means easy money. Meanwhile, the increased demand for sophisticated ecommerce solutions has led to the development of a range of tools and practices which are steadily changing ecommerce as a whole for the better.

The Next Big Thing

In many ways, a dropshipping website operates like any other ecommerce site. There is the same need for a strong SEO strategy, coherent web design, and consumer engagement. The difference is that while one party handles matters such as marketing and content management, a completely separate person or group handles all aspects of production, shipping, and inventory management.

The value of this is that it significantly lowers the point of entry for anyone setting up their first online store. From the site owner’s point of view, they can put all their marketing knowhow and web design skills to good use, and this is where the majority of their costs will lie. As inventory is handled by their chosen suppliers, much lower capital is required to get started.

Meanwhile, suppliers can focus on the creation and improvement of their products, and on fulfilling orders efficiently, without needing to worry about outreach or marketing.

Risk vs. Reward

While no business venture is risk free, the pros of dropshipping largely outweigh the cons, and the comparatively low cost of setting up an ecommerce site of this type makes it an attractive prospect for budding entrepreneurs with limited budgets.

  • No inventory means no need for storage facilities, packaging processes, or the associated costs of maintaining a physical premises.
  • Dropshipping can be run as a solo venture, depending on the scale of your enterprise. This means no staffing costs, and no requirement to be tied down to a specific location. However, as your business grows, you may need to expand your team to handle matters such as customer enquiries.
  • Purchasing stock from the supplier occurs only once you have received payment from the customer, meaning your money is never tied up in stock.
  • The flexibility of running a business that is purely online means that it is far easier to revamp and try a new approach if any aspect is less successful than expected.
  • Scaling up or down is fairly straightforward. This includes reaching out to more suppliers, or simply increasing the range you stock from your existing suppliers. Here is what you need to know about wholesale suppliers.
  • Not having access to the inventory means placing trust in the supplier to maintain high standards of quality, and be diligent about shipping practices.
  • Returns and complaints can be trickier to handle as you will need to liaise between the customer and the supplier. This can make resolving complaints take longer, meaning you need to figure out how to keep customers happy while they wait.
  • As your supplier may be working with more than one seller, you are likely to find other websites doing something very similar to yours. It is important to be aware of your competition and make sure you stand out from the crowd.

A Broader Market

The benefits of dropshipping to ecommerce as a whole are immediately apparent. For suppliers, it is an increased opportunity to gain exposure for their brand, and increase sales without having to change the way they work.

Furthermore, in the absence of an agreement to the contrary, suppliers have the potential to reach out to a wide variety of dropshippers, and supply items to them all. Similarly, if a dropshipping partner requests exclusive branding, there is the opportunity to make a little more money on each sale by charging for the right to exclusivity.

As more people join the industry on both sides, this also broadens the market significantly, giving customers far more to choose from, and sellers far more scope to expand and adjust their business practices.

At the same time, competition is hotting up, and only stores with a proper content marketing and social media strategy are going to make the grade. From Facebook ads to influencers on Instagram — store owners need to use all the tools in their arsenal to add perceived value to their products, rather than always fighting to offer the lowest price.

Better Business Tools for Everyone

As with any industry, increased competition means greater incentive to improve the services offered, and to find new and better ways of doing things. As such, the rise of dropshipping has spurred a new wave of development within the world of ecommerce.

The increased demand for online store software has led to an ever-improving milieu of business tools. Many of these are beneficial to any ecommerce website, not just dropshipping sites, meaning there are more ways than ever to optimize your business practices and free up time to focus on other ventures.

Combining supplier directories like Wholesale B2B with immediately functionable online stores (Shopify’s store builder is good for first-timers), evens out the ecommerce playing field, and allows a range of people from different backgrounds to experiment as entrepreneurs. There are tons and tons of dropshipping stores popping up all over the place, with sellers sharing tips of their trade in a global ecommerce community. Platforms such as Shopify facilitate the process of matching sellers with suppliers, and offer a range of features to assist with the creation of  a cohesive, functional website, that can be tailored to the specific vision of the user — central to any digital strategy.

Meanwhile, the rising appreciation of big data has given rise to a range of applications which make it easier to view and interpret business analytics. Whether it’s data about shipping, web user experience, or purchase habits — all of these can be used to create a lean and ROI-focused ecommerce operation.

With so many online business tools and tailored platforms to make the process as straightforward and seamless as possible, it is hardly surprising that dropshipping sites are rapidly increasing in number.

Meanwhile, as ecommerce sales are rising year by year, there has never been a better time to try your hand at online business. Take some time to research your options, and figure out how much time and money you can afford to invest in your venture. Similarly, if you are a producer, but would rather not have to worry about sales and marketing, there may be a dropshipper out there ready to work with you to make your product a success.

 

Victoria Greene: Content Marketer & Ecommerce Entrepreneur

I love to work with brands and business owners, sharing my ecommerce top tips, and helping them solve their social media challenges. I’m a big advocate of storytelling (who isn’t these days) and I love to kick back with my dogs when I’m not working on my dropshipping stores.

 

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