- It is not necessary (a priori) to have storage space, you only need a personal computer with Internet access and an agreement with the dropshipper.
- Reach a larger target audience through online platforms.
- Only task: (marketing) promoting product through the network in a simple way.
- Concentrate your efforts to promote the product, send to the dropshipper the customer’s address, your payment and necessary information about the product.
- Internet advertising cost is less than the cost of advertising campaigns carried out by other means.
- You can control market demand in real time, look for market opportunities and create the conditions to have more attractive products.
- Create and promote your brand that is included in the product. We can sell with our own brand agreeing on the previous shipment this uniqueness and capturing our customers under the umbrella of a registered trademark, which in the long term generates confidence.
What can go wrong:
- The dependency of the dropshipper, since the latter has the responsibility of offering a good delivery service to the client. Depending on the execution of that operation, it may harm or benefit the retail merchant’s relationship with its client. This is one and perhaps the most important of the mistakes and problems that end with a dropshipping adventure. For this we recommend using a mixed shipping system, something more costs but with a greater degree of acceptance. If your audience is close to you use the shipment yourself, and then set your delivery strategy to your customers. Fidelizarás, promote the buyback and also offer an additional service that nobody can give.
- Profit margins limited according to the agreements signed with the dropshipper. With time, you will be able to incorporate more agreements and seek better margins.
The increase of guarantees or additional elements for the promotion of the product will be at your own cost and risk. This will cause the product to become more expensive, but it will improve other inconveniences such as the lack of control of the process.
- Absence of effective control of storage and inventory levels. It is always possible to control it if you establish an agile communication system, and the products can be easily replenished. Never look for expensive products, or too big.
- Compete for a price close to the cost resulting in low margins that force you to a high number of sales for the generation of relevant profits. Competing for prices is a strategy that is not good. Better to look for clients and “Evangelize them”.
- Fragmented order delivery when a single customer order involves different dropshipper products, resulting in longer delivery times and higher shipping costs. If you sell different products from different suppliers do not make common deliveries, unless you centralize the delivery process with intermediation. You have to integrate that into your sales process.
The truth is that, with this model, e-commerce is able to meet some of the main demands that customers who buy through the network, such as having orders as soon as possible, which is especially relevant in countries with a high level of impulse purchases, that shipping costs are transparent and complete (demanded by 91% of online buyers), that a detailed description of the product is presented (demanded by 90% of buyers); but, simultaneously, it can have difficulties to take care of others, such as that the returns are free (94%) (DPD Group, 2017). In addition, it can contribute to mitigate some causes of dissatisfaction that are very present among e-buyers, such as returns (26% of unsatisfied electronic buyers), delivery prices (21% of unsatisfied electronic buyers) or speed of delivery (16% of unsatisfied electronic buyers) (Economics C., 2013).