x You want to sell online using the Dropshipping model but don't clearly understand what Dropshipping is?
x Are you a student, office worker, startup,... want to earn extra income but don't have capital? x You need to know the implementation process; What are the advantages and disadvantages of dropshipping to decide whether to participate or not?
At Proship.vn, we will clarify what the dropshipping model is right below. Accordingly, startups, new entrants to the retail market or long-standing businesses that want to try Dropshipping can refer to it for more correct, reasonable and effective orientation. in a time when the e-commerce network is booming.
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What is dropshipping? Suitable for which audience?
What is dropshipping? Dropshipping is a retail fulfillment method where a store does not keep the products being sold in stock. Instead, when a store sells a specific product, it does not keep the product in stock, but instead purchases the product from a third party and ships it directly to the customer. As a result, those salespeople never see the product or handle the product.
The biggest difference between Dropshipping and other retail models is that merchants sell without warehouses or inventory. Instead, these merchants purchase inventory as needed from a third party – often a wholesaler or manufacturer – to fulfill their orders.
Below are 3 target groups suitable for dropshipping jobs:
- Student:
Students are a very suitable audience for this form of making money. Because this is an audience with a lot of free time but not much capital to do business.
- Office people:
If you are an office worker and have up to 2-3 hours/day of free time, making money online using dropshippng is very suitable.
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- Online business people:
When you are new to selling online, you will not have much experience, from knowledge of market analysis, product finding, sourcing, shipping, etc. Dropshipping will give you the basic knowledge to confidently enter new markets. School is more difficult.
Evaluate the advantages and disadvantages of the Dropshipping model
As above, you already know what the dropshipping model is, who is the right person to do dropshipping,... Next are the advantages and disadvantages of dropshipping that Proship recorded:
Advantages of Dropshipping
Dropshipping has outstanding advantages such as:
- When you start a business, initial investment costs are low. If you grow a large system, costs start to increase. But still much lower than traditional business;
- No worries about inventory, no case of importing a bunch of goods that cannot be sold, no need to find a store to rent;
- Easy to start, fast capital turnover time, Flexible, Suitable for business beginners, students, newbies;
- Commissions are received immediately after completing each order. No need to wait for third-party review.
Disadvantages of Dropshipping
Besides advantages, dropshipping also has disadvantages such as:
- Competition is huge, so expanding the scale of operations is a difficult problem;
- If you don't know how to set up an account at Amazon, Ebay will easily get suspended. If you want to set up your own webstore, you must have knowledge about Web, Domain,...;
- Is it difficult to manage the quality of goods sent to customers? Where to source products, who to sell to, how to analyze market demand to find products?
- How to use online Marketing channels (pay traffic, SEO) to increase sales up to N times;
- When encountering difficulties, how to solve them such as: How to take care of difficult customers, choosing the wrong unreliable supplier, buying or selling accounts being blocked, etc.
* In summary: In the retail business, Drop shipping is NOT the best business model. It has many benefits but also has many limitations that, if not sufficiently resolved, will become big outstanding problems. If your business plan is carefully and thoroughly built, it is possible to overcome the limitations of this model to create a successful Dropshipping Business.
What do you need to prepare before doing Dropshipping?
To be successful in doing business using the Dropshipping model, you need to prepare:
Identify goals
You need to define clear goals before doing anything, participating in any form. Some notes when setting goals with the dropshipping model:
- Goals must be short-term, medium-term and long-term;
- Setting goals must be based on resources, resources are things you have at the present time (such as time, capital, skills, relationships,...). If you set your goal too high, you will quickly get bored, and if you set your goal too low, you will not be able to develop your full potential;
- Once you have identified your goals, you need to make a detailed plan of time and work to accomplish. Then you must make every effort to pursue that goal.
Bank account, Visa/Master card
You need to prepare at least one bank account and Visa/Master card to be able to do dropshipping business.
Prepare yourself mentally, have the right Mindset
Dropshipping is a career that creates a stable income for you, helping you not have to sit in the office from morning to night. And if it's a profession, you have to invest money, time, and a serious attitude to learn and do.
Prepare capital and time
For beginners, a capital of about $100 - $200 is enough. As for time, with different goals, the time spent by each person is also different. In general, if you need to give a relative number, you need at least 1.5 hours/day to learn and make money with dropshipping.
Sequence of implementation steps of the Dropshipping model
Proship answered what Dropshipping is and pointed out the advantages and disadvantages of dropshipping,...And to be able to make money by Dropshipping, you need to do:
- Step 1: Find products, choose suppliers, negotiate with them about price, choose shipping method according to price and shipping time. This is an important step that determines 90% of the project/campaign's success;
- Step 2: Choose a sales channel. You can post products to your Store on Ebay, Amazon, your own website...;
- Step 3: Customers will come to your store to buy goods, pay you via Paypal, Payoneer account or a Paygate accepted by your place of sale;
- Step 4: Purchase and send to customers;
- Step 5: The supplier will package and ship the goods to the customer. You will follow up with customers and perform customer care;
- Step 6: Summarize after each month of sales to know how much profit is earned for each product. Review and optimize sales steps to increase profits in the next sale.
Everything you need to know about Dropshipping ; The advantages and disadvantages of Dropshipping, etc. have been shared by Proship above. If you are preparing to do business online or just starting a business, you can refer to it to know how the dropshipping model works...And when you need to use the inter-provincial shipping service, contact us. 0909 344 247 for advice and direct support.
