Dropshipping: What is it and how does it work?

dropshipping is a business model that allows selling online products without physically possessing them. When clients buy a product from a seller’s dropshipping shop, the order is forwarded to the supplier who takes care of the storage, shipment and delivery of the product on behalf of the seller himself.
The logic behind dropshipping is easy: why not buy the goods to be resold only after finalising a sale? In this way a number of advantages can be summed up in one fell swoop:

• Avoids the problem of inventory in stock;
• You DON’T pay the goods in advance;
• Above all, the warehouse (with all the necessary charges) is no longer needed! (Only the one of the supplier remains)

So, the seller/ trader has to focus on marketing related to the products on e-commerce and then a whole new series of online promotions with specific mechanics that are different from those of a physical store. The seller will also has to take care of creating a clear and adequate shop window regarding the product sold and here comes DiCOmo that, with his knowledge and effective / efficient solutions, will help your Marketplace to take off!
Finally, once orders begin to arrive, the seller’s task is to order the goods purchased by his customers from a supplier who will then send the products to the initial customer.

Such a business model could not exist without advantages for both the seller and the supplier, of course. Here are some of the respective benefits that dropshipping can bring to such subjects and – perhaps – also to your business:

• The main advantage for the seller is to open a low-cost and potentially very profitable business, without the need to invest significant capital for the purchase of products, logistics, etc./li>
• The supplier, on the other hand, will be able to increase its turnover, benefiting from a greater capillarity of market penetration, mainly online, under competitive conditions.

At first, it all looks fantastic but there are still potential risks. Here are the biggest ones:

• Seller’s risk of low profit (although the percentage is variable and fluctuates between 5 and 30%)
• It is not a “no cost” activity; in fact, it is necessary an investment in marketing and other promotional activities specific to Internet’s world.
• Relations with unreliable suppliers and in stock products running out. Any problems with availability and delivery of the products directly damage the reputation of the seller, leading to a loss of appeal of its commercial offer on the market (negative reviews / stars). In addition, the seller should regularly ensure that the products offered for sale are available from its supplier.
  For all the above, it is essential to find professional and qualified suppliers and DiCOmo, with its wide experience and knowledge, can help you!
• Competition in the dropshipping field is getting higher and therefore, with our collaboration you can distinguish the offer from the one of other competitors with a well-defined and well-considered strategic plan, to avoid embarking on unsatisfactory adventures.

It seems so simple that I could do it alone, why should I rely on DiCOmo?
It’s true. Managing a store, shop window or marketplace in dropshipping seems very simple but unfortunately, as listed above, there may be problems to manage and that is why DiCOmo’s support can relieve you of many duties by helping you to know and understand the risks, obligations, commercial logic and hidden costs.

Our team will take care of:

• Daily management of the orders coming from various sites
• After-sales management
• Reviews management – essential for building your own business on the Internet
• Partners’ selection: they have to ensure availability in terms of time, competitive prices and product quality, qualities that are necessary to start the business
• Advice and strategic, upstream and downstream commercial support
• Consulting and/or marketing management both for the shop window and for the related visibility

It is convenient to start a dropshipping business?
To sum up, it is a business that has a number of undeniable advantages and some specific problems, to be known up-front and to be learnt to manage. However, if you want to open a business at low cost and with reduced risks, dropshipping in 2021 remains a valid choice and with DiCOmo’s leadership it will be even easier to undertake it!