Many business owners are unsure whether to use e-commerce or drop shipping. However, E-commerce and drop shipping are two different online business models, and it’s crucial to know the difference. E-commerce means selling products online through your website. On the other hand, dropshipping is when you sell products without holding any products yourself. This blog will help you understand the difference between e-commerce and drop shipping. So, you can determine which one better suits your needs!
Key Differences between E-commerce and Dropshipping
- E-commerce stores must have a website to sell products. The E-commerce store’s website will require its hosting, domain name, and design. In addition, you will also need to create your product listings and manage your e-commerce store.
- Dropshipping businesses do not require a website of their own. Instead, you can list products for sale on other people’s websites and dropship them directly to your customer’s doors. When someone orders a product from your listing. You will purchase the item from the supplier and ship it to your customer. Because you are not holding any inventory yourself, there is no risk of overselling or running out of stock.
- Another significant difference between e-commerce and drop shipping is the amount of work required. E-commerce requires much more work than drop shipping, so it is not for everyone. To run an e-commerce store successfully, you must manage your inventory levels, and deal with customer service issues. Moreover, handle shipping logistics yourself or hire someone else to do them. You also need the technical skills required to create your e-commerce website and list all your products on that site.
- Dropshipping businesses are much less hands-on because they do not require any product listings at all. As long as there are third-party marketplaces online where you can sell items (such as Amazon). Then you’re ready to start a successful dropshipping business. Furthermore, you also don’t have to worry about other responsibilities taking up your time. Such as running the actual storefront itself!
Pros of Dropshipping over E-commerce
- One disadvantage of e-commerce is that it can be more expensive to get started. You will need to create a professional-looking website that represents your business. Furthermore, you will need to invest in an excellent domain and hosting plan. Lastly, you will need to create your product listings. Manage your store’s inventory yourself or hire someone to do it.
- Dropshipping businesses are much less expensive to start because they do not require any of these things! All you need to do is find a supplier willing to drop ship products for you. Also, list their items on an online marketplace like Amazon. This way, you don’t have to risk buying stock, and you won’t need a place to store your inventory.
The scales favor drop shipping with the maximum ease and minimal risk offered by drop shipping.
Deciding which to pursue
Dropshipping is an online business model in which e-commerce entrepreneurs sell products without carrying any inventory. Instead, when a store owner receives an order from a customer. First, they contact the supplier, then ship the products directly to the customer’s address.
Additionally, dropshipping apps like Oberlo let you add products from various suppliers into your shop to fuel your product offering.
However, on the other hand, E-commerce requires entrepreneurs to invest in and manage their stock. This means that e-commerce businesses need to track and manage their stock levels and invest in storage and shipping solutions.
E-commerce also requires more upfront investment than dropshipping. For example, e-commerce stores need to purchase or build their website and payment processing system. Whereas dropshipping businesses can start selling products with just a few clicks.
How does Dropshipping work on Shopify?
The Shopify dropshipping process is simple: you sell products, and then they’re shipped directly from your supplier to your customer. With no additional work on your part.
Shopify makes it convenient for anyone to start an online store by providing all the tools needed in one platform. It’s perfect for entrepreneurs who want complete control over the design and branding of their stores. Without having to worry about stocking inventory or shipping orders themselves.
Furthermore, they also offer competitive pricing, 80% less than other e-commerce platforms.
When you dropship on Shopify, you’ll never have to worry about excess inventory. As, you’ll only ever order the necessary amount of products to meet the demand from your customers. This system is unlike a typical commerce business, which involves manufacturing or purchasing products from a wholesaler in bulk.
How to choose the Best Dropshipping Suppliers?
Choosing the best dropshipping suppliers can be a complex process. There are many factors to consider, and it can be hard to know who is the best supplier for your business.
It would help if you began by determining what you are looking for in a supplier. What products do you want them to sell? What kind of quality do you expect? Also, What is your budget? Once you have a good idea of what you are looking for, you can research different suppliers.
There are many ways to find dropshipping suppliers. The most popular methods are online directories and search engines. You can also find suppliers through social media platforms like Facebook and Instagram. Another great way of finding suppliers is through supplier review websites.
When researching suppliers, be sure to read reviews from other businesses. Checking supplier reviews will give you a good idea of each supplier’s quality of products and services. Furthermore, it is also important to compare prices. Be sure to choose a supplier that offers competitive prices without compromising quality.
Once you have found a few suppliers that you are interested in working with. It is time to narrow them down. Unfortunately, this can be a complicated process as well.
Questions to Ask
How do you know if suppliers have the capabilities and resources to help your business grow? The best way to find out is by asking questions during an initial meeting or phone call.
During this conversation, ask about their experience in the industry and what they can offer your business. For example, how long have they been working with other businesses? How much experience do their employees have? Which methods/products are used to manufacture their product or service? How quickly will orders be processed and shipped to customers?
Once you find a supplier that offers precisely what you need, it is time for the final negotiations. How much will they charge for your product or service? How long is the lead time? Moreover, How are returns handled? It can be helpful to create a list of questions ahead of the meeting. So, that you do not forget anything important.
It becomes clear how difficult it is to choose the best dropshipping suppliers during this process. However, if you take your time and ask the right questions. You will find a supplier that is perfect for your business.
When choosing a dropshipping supplier. It is vital to consider the quality of their products, the prices they charge. Also, how efficiently they can process and ship orders. Try to ask many questions during your initial meeting. Do your research to find the best supplier for your business.
Dropshipping for Beginners (FAQS)
What type of E-commerce is Dropshipping?
Dropshipping is a means of wholesale fulfilment. Where a retailer will purchase products from a wholesaler and have those products shipped directly to the customer. The advantage of this method for retailers is greater flexibility. As they can offer goods from different suppliers along with their private label or other goods without having too much upfront liability.
Dropshipping focuses exclusively on selling. It doesn’t require any inventory or warehouse space. Because it operates as a distributor to retailers by selling products from suppliers.
Is Dropshipping Easy?
Drop shipping’s strengths lie in simplicity and speed. You won’t need much more than your computer and an internet connection to get started. Furthermore, it’s easy to see why many entrepreneurs would want to try out drop-shipping as part of their overall e-commerce strategy. Which includes other third-party profitability models like affiliate marketing and online arbitrage deals.
Why is Dropshipping Bad?
Dropshipping can be a great way to make extra money, but it has its downsides. One major downside is the high shipping costs associated with this business model. Shipping can end up double what you charge for a product. In addition to that, many drop shippers face low-profit margins and little quality control.
Is Dropshipping Legal?
Dropshipping is a legitimate order fulfilment method. It’s a smart alternative to purchasing your inventory. Storing it in a warehouse, and trying to anticipate what customers will want each month. Instead of carrying the risk of investing in a stock that isn’t going to sell. You can have distributors ship items from their warehouse when an order comes in.
The downside could be that doing business with a fishy supplier can put you in a difficult position. As, they may take your product and refuse to ship it to the customer. Unfortunately, there’s no recourse if that happens, or they can abuse your terms of service or just disappear out of existence.
So which business model should you choose? Ultimately, the answer lies in your situation and goals. If you have the time and resources required to run an e-commerce store successfully. Then e-commerce may be the best option for you.
However, dropshipping is a better choice if you don’t want to deal with any of the extra work involved or you’re not confident in your technical skills. Thanks for reading! We hope this blog has helped you understand the difference between e-commerce and drop shipping. If you are keen to know more about Online business then read our blog Difference Between E-Commerce and M-Commerce now.