Dropshipping is one of the trends in the ecommerce sector that has grown the most in recent years in the online market.
This dropshipping tactic bases its pillars on establishing a series of standards in the commercialization process of a certain product, starting from the premise that you are not necessarily obliged to have your own stock to start operating. Interesting, right?
How Does Dropshipping Work?
One of the great attractions of dropshipping stores is that they are constituted as a business model that does not necessarily have to have a physical location.
The main requirement and starting point would be to have a good internet connection . And you will ask yourself, is it that easy? In reality, not everything is reduced to it -obviously-, but it does make up an essential element. The reason for this is based on what will be the communication channel that the entrepreneur will need to ‘draw’ the best purchase process, in the relationship that he will establish between his dropshipping suppliers and his potential customers.
Surely on more than one occasion you have used the typical table of pros and cons to see more clairvoyantly those benefits or drawbacks that surround a certain situation, fact or decision, among others.
Thinking Of Setting Up A Dropshipping Company?
To break down the subject of dropshipping, we could simplify the advantages and disadvantages of a very interesting commercial formula, but not without its complexities.
For example, the ideas that would tip the balance towards a positive view of this concept would be those that show that this business model does not require the disbursement of that large initial investment to generate a catalog or inventory of products. A condition that is directly related to the great weight that logistics implies in these cases would fall on an external agent. And the most hopeful: the growth potential in the medium term.
On the other hand, not everything is a bed of roses, since dropshipping companies are subject to dependence on a third party (wholesale supplier in most cases) to be able to carry out their commercial activity.
In turn, the fact that this new actor enters the scene translates into a reduction in profit margins. To all this, we should add the growing competition that some market centers and niches face when they work with this model, since we have to think that different dropshipping stores are supplied from different storage points that are also supplying other merchants in the parallel way. same profile.
All That Glitters Is Not Gold
The idea behind dropshipping -also known colloquially as selling without stock- is not a magic formula that translates yes or yes into a success or business guarantee. The fact that in 2021 electronic commerce registered 51,600 million euros in sales -according to CNMCData- , is a factor with great power of attraction. Quite a claim to which many of those who decide to take the step and venture into this type of commercial management cling.
Also Read: Seven Steps To A Successful E-commerce Site