Understanding Dropship – More and more needs will usually make someone do additional work. In today’s increasingly advanced era, doing a small business can get quite promising benefits.
If you previously thought that if you do business you have to use capital. It turns out that for now there are also businesses that can be run without using capital or even when using relatively very small capital.
Dropshipping is an alternative that you can use when you want to run a business but are constrained in terms of capital. Simply put, dropshipping is a business that has relatively minimal capital and can be done by anyone.
In addition, dropshipping can be said to be a sales system in which sellers or dropshippers only need to carry out the marketing process and sell goods from other parties without the need to make a purchase of the item in advance.
Usually, there are businesses that require business actors to stock a certain amount of goods. So, in dropshipping, you don’t need to take this action. The simple dropship scheme makes this business possible anywhere as long as the business actor has an internet connection.
So, there are still many interesting things that will be discussed related to this dropship business. If you really want to run a dropshipping business, then the reviews in this article can help.
Definition of dropshipping
Previously explained the meaning of dropship briefly. However, at this point, we will explain more broadly related to the meaning of dropshipping so that you can understand even more.
Dropshippers are people who sell products from one or several suppliers at once. Interestingly, the dropship business does not require business actors to store trade stock and send orders to buyers.
Where basically the obligation owned by dropship business actors is to market products from suppliers to potential consumers. Usually this marketing process will be done online.
For example by utilizing online shop websites, social media and marketplaces. The way dropshipping works is when there is a purchase of a product, the dropship business actor will contact the supplier who is guarded by cooperation.
Later these suppliers will carry out the process of packaging the goods safely and neatly and carry out the process of sending the goods to the buyer’s address. Interestingly, suppliers will still include the name of the dropship business actor on the product sent. That way, buyers will still think if the products they buy come from dropship business actors.
Apart from being practical, the dropship business is also a business that does not require large capital. Actually, you only need to register with the supplier and make administrative payments if any.
Apart from this, you only need to spend funds for marketing purposes. If you don’t have the funds to create a personal website, then you can take advantage of online platforms such as social media, marketplaces or other media that can be used for free.
Talking about the benefits you get from the dropship business, it will usually come from the difference in the price you set with the price from the supplier.
How to Run a Dropship Business
After knowing the meaning of dropshipping, next we will learn how to easily run a dropshipping business so that we can successfully develop and earn profits and have regular and new customers.
So, some tips for running a dropship business are as follows.
1. Choose the Products You Will Sell
The advantage of running a dropship business is having the freedom to sell goods. Where you can choose the items according to what you want to sell. Because usually dropship suppliers will provide a wide selection of goods, from clothing to furniture.
Although there is freedom in choosing the goods to be sold. You should choose one or two types of items that are related to each other when starting a dropshipping business. The purpose of doing this is so that you can focus more on serving the needs of target consumers.
For example, if your target market is young women, then you can sell appropriate beauty products. For example, cosmetic and skincare products .
Not only helps you to focus more on the services provided to the buyer. But selling relevant items will make it easier for you to build a brand.
For example, when you sell cosmetic products and several other related products. Usually, customers will find it easier to remember that your store is a beauty products store.
It’s different when you sell a variety of products that are not related to each other. Usually, this condition will make it difficult for consumers or buyers to know the identity of your store.
2. Determine Suppliers
The development of your business will also be influenced by whether or not the supplier is good. Therefore, when you decide to run a dropship business, you also have to be right in choosing suppliers.
Not only can you get cooperation with suppliers whose products you want to sell. However, you also have to be sure if the supplier has quality goods so that later you can make customers satisfied with the services and products you provide.
In determining the supplier to be invited to cooperate also cannot be arbitrary. The reason is, you also need to know a few things like the ones below.
a. Administrative costs
Each supplier will usually apply an administration fee. In addition, it should also be noted that the administrative costs from one supplier to another are somewhat different. Therefore, when choosing a supplier, you should pay attention to the administrative costs they offer. It would be better if you choose a supplier that offers administrative prices that are not too high so that you can get a sizable profit from each existing purchase transaction.
b. There is Transpiration for Every Product Stock
The existence of product transparency must also be notified by the supplier. If indeed the supplier does not want to provide transparency of the amount of product stock they have. Better think twice about using their services.
Because the existence of product stock will affect the development of the business that you are running. Where when you are afraid to know how many products are in stock and at that time there are also buyers who will make transactions on these items, they will usually feel disappointed and move to another store if the goods they want to get are out of stock.
c. What delivery service is used
Of course, you also know that every goods delivery service always has a different quality. Therefore you also have to know what delivery service is used by the supplier. It would be better if the supplier chooses a shipping service that is fast, safe and friendly in terms of price.
d. Policy in Purchase of Goods
It is undeniable that suppliers can also make mistakes. For example, such as an error in packing the size of the goods or a production defect. So that buyers don’t feel disappointed with delivery errors, you as a business person must also be able to choose a supplier that offers a return policy with easy terms.
e. Packaging Customization Policy
One way of branding for dropshippers is to add a description of the store that you have on the product packaging. Therefore you also have to work with suppliers who are willing to customize their product packaging by adding the identity of the store that you have. For example, by adding a thank you for the consumer but also listing the name of the shop that you have.
3. Increasing Selling Value
Not only determine products and suppliers only. However, being a dropship business person must also determine the selling price of each product they have. Most dropship business people want to offer low prices with the aim of attracting consumers.
However, it would be better if you as a dropship business person avoided this strategy. This is because many other competitors have implemented this strategy. If you also use this method, then you will be trapped in tough competition.
Where later when the competition has been formed, you will automatically lower the price again. When the price of the product has decreased again, the profit you will get will be smaller. In the end, you have to try to get a large number of buyers just to have a large number of profits.
So that you are not trapped in this situation, one way that can be applied is to use reasonable prices. However, for the strategy used, you can apply a unique selling point or selling point.
If you give more to buyers, you can still attract the attention of potential buyers even though the products you sell are the same as other competitors. Improving service quality can also be applied to get the attention of potential buyers.
For example, by offering more responsive customer service and a customer reward program . This can also be a strategy to increase the selling value of a product.
4. Create a Personal Online Store Website
Currently, there are indeed many platforms that can be used as media to sell the products that you have. Even so, you will be more flexible when using a personal website. This is because having a personal website is able to offer several advantages that a marketplace or social media platform may not have.
So, to find out more about what advantages a private website will provide, the explanation below can help.
a. Appearance and Features Can Be Personally Defined
When you have a personal website, you can determine how you want it to look and the online store features that are needed. Where in terms of appearance and supporting features it will be able to make it easier for you when you want to build branding. Apart from that, you can add other features that can improve the customer experience. For example, price features and product comparisons.
b. No Competitor Products
Having a personal website will be able to strengthen the position of the products you are selling. Where on the website that you have later it will only display the products that you want to sell. Automatically the attention of consumers will be focused on the product you are selling.
c. There Will Be No Platform Administration Fees
Marketplace fees that are out there will apply an administrative fee to each transaction. However, if you use a personal website, then you can avoid administrative costs and can add profits from products that are successfully sold.
5. Do the Promotion Process
In order for the dropshipping business that you are doing to grow even bigger, of course, a promotion is needed. Currently, almost all fields of work have begun to switch to utilizing technology.
This also applies to the process of promoting a product by utilizing online media, which we more often call digital marketing. It should also be noted that there are several types of digital marketing that we can use when we have a personal website.
The first digital marketing that you can apply to a website that has been successfully created is to implement search engine optimization efforts or we are more familiar with the term SEO. Good SEO support will be able to make your website rank highest in Google search results.
In addition, when your website is ranked the highest, it will also be able to provide the possibility to get quite a number of visitors. This needs to be implemented because 53 percent of your website visitors come from search results like on Google.
The second type of digital marketing is utilizing SEM or search engine marketing. The purpose of using the SEM method is actually the same as SEO, which is to make a website in the top rankings but in the form of paid advertising.
The third digital marketing is using email marketing. The existence of an email marketing method will be able to help you send promos to consumers. To do this method, you have to build an email list. For example, by providing discounts on the website with the condition of registering an email from the consumer.
Advantages of Running a Dropship Business
After knowing what are the easy tips for running a dropship business. Next, we will study together what are the advantages of running a dropship business.
It is very important for you to find out more about the advantages of the dropship business that other businesses don’t have. So, so that you can know more, here is a review of some of the benefits that can be obtained from running a dropshipping business.
1. Does not require large capital
Previously, it was explained that the dropship business does not require business actors to purchase products as stock at the beginning. Because basically the dropship business is marketing products from suppliers to getting purchase transactions from customers.
You will only make purchases if there is already a request from consumers. Usually there will be conditions such as paying off transactions made first before the customer’s request will be processed.
Then the delivery process will be carried out by the supplier. This will make dropship business actors only spend very minimal capital.
2. Minimal Risk
The dropship business will make it unnecessary for business actors to stock goods. This is what makes dropship business actors less risky. In contrast to the type of business that must process the stock of goods first. Because when stocking goods, there will be a possibility that the goods will not be in demand by the market and this is what makes the risk even greater.
3. Can Sell Various Products
When you run a dropship business, you can sell more than one product. However, it is advisable to sell related products. This is so that it can simplify the process of building the store brand that you have.
4. Simple Business Process
The dropship business process is also very simple. As explained, the task of the dropship is to promote a product that is being sold to get a buyer. Later the dropship will work with suppliers and when the goods or products have found a buyer.
The dropship party only needs to confirm with the supplier to carry out the packing and process of sending goods to the customer’s address. With a note that all payment processes are in order or in accordance with the provisions that apply.
So, that’s a review of the understanding of dropshipping and its benefits that you can read in full. From the explanation above, it can be concluded that the dropship business is indeed very promising and very helpful for those of you who really want to do business but have minimal capital. So, are you interested in starting a dropshipping business?