Dropshipping is a business model where a third party, usually the supplier or manufacturer, ships a specific, usually custom-made, product directly to the customer following an order via the seller’s online store (usually your website). Simple, right? While it may sound so, there is a lot to dropshipping that you should understand before going into it. So let’s get into the details.
A Detailed Look into Dropshipping
Firstly, it’s important to understand that the supplier stocks the products (yes, you don’t) and keeps track of inventory for you. So you can focus on maintaining your online store, keeping up with new trends, promoting the products, and converting as many leads as possible. That flexibility is the main advantage of dropshipping. Any orders that you get will be automatically sent to the supplier, who will take care of packing and shipping the product to your customer. Easy, peasy!
This business model has grown exponentially due to its many benefits for all parties involved, including up to 18% higher profits for manufacturers, up to 50% higher profits for retailers, and less constraints between suppliers and sellers (e.g. dependance on space, inventory limits, exclusivity, etc). It is a sustainable model that can be pursued long-term with only a few, minor risks. These include control over product quality, delivery, and time management – all of which can be resolved by finding the best supplier.
Even so, many other potential issues are easy to redress if/once they do happen. For example, losing a supplier/retailer won’t hurt your bottom line. There will always be more to choose from. Similarly, if one supplier is out of stock, you can quickly have another one fill in the gap. Also, it’s less likely you’ll run out of inventory, and you can even provide some customization without needing any special equipment.
While there are many benefits to this business models, there are also a few points to consider before deciding to go into it. Firstly, it is an additional responsibility for your team. While a dropshipping option doesn’t usually take a lot of time to set up and maintain, you might want to consider your staff’s workload before jumping into it. There will likely be some back-and-forth communications, additional website updates, and some experimenting before everything flows by itself.
On top of that, you need to keep in mind your goals for dropshipping. Since it is highly competitive, you might have to increase your offering both in terms of product variety and the quantity offered. This could require additional market research and customization. However, if you find the sweet spot between those two, then you will likely hit the jackpot; otherwise, you might end up with small profit margins which won’t be worth the backend work of setting this up.
We, at Valigara, understand the ins and outs of this eCommerce strategy, within the jewelry industry, and want to help you make the most out of it. So we have extended our services to include and facilitate dropshipping for you! If you’d like to know how we can help your business with this selling method, then keep reading.
How Valigara Can Help with Your Dropshipping Business
Choosing the right supplier(s) is one of the biggest challenges of dropshipping. Getting this point right will address most of the risks associated with this business model.
As a professional e-Commerce platform, Valigara has established an online catalog of the most experienced and reliable online suppliers, who sell no fake gems or metals and have kept a proven track record in the industry, including millions of dollars in sales throughout major marketplaces. These suppliers are not accessible to everyone, outside of our customers (you) and we regularly update and grow this list, so your business never stays stagnant.
That is why, if you’re ready to expand into this new territory and learn how you can grow your revenue, learn more about Valigara’s dropshipping options or get in touch with us to discuss any questions or concerns you may have. We’re excited to hear all about your plans and goals!