Dropshipping Guide | What Is Dropshipping & The Different Types of Dropshippers
The online marketplace is huge. You can find virtually anything you could ever want online and have it shipped to your home.
But you may have heard somewhere along the way the term “dropshipper.” What is a dropshipper?
If you’ve ever purchased items from an online retailer but had an item fulfilled somewhere else, the place that fulfills that order is known as a dropshipper.
Sound confusing? This article will answer the question “What is dropshipping?” guide you to some popular fashion, jewelry, and home decor dropshippers, and provide some dropshipping business-starting tips.
Dropshipping Definition: So, What Is Dropshipping?
The process of dropshipping can seem confusing to those who are new to purchasing online.
Therefore, this article sets out to answer the questions, “What is dropshipping?” and “What is a dropshipper?”
In basic terms, a dropshipper is a supplier who receives forwarded customer orders and then fulfills those orders.
What is a dropshipper actually doing? The dropshipper is the one who packages and ships the final order. They can be a large company, a solo individual, or anywhere in between.
What is a dropshipper? There are many types of dropshipping companies. They often focus on one particular type of product. For example, there are furniture dropshippers, fashion dropshippers, home decor dropshippers and jewelry dropshippers.
ModMade, for example, is one of the furniture dropshippers that focuses solely on letting retailers use its dropship furniture service to offer their furniture for sale.
Benefits of Dropshipping
Now that we have answered, “What is dropshipping?” you might be thinking “What is dropshipping beneficial for?” The main reason retailers choose to dropship is because they can save significant amounts of money on inventory.
For example, imagine how much money a retailer could save by dropshipping clothing.
Instead of having hundreds of each article of clothing in different sizes that it lists on its website, it can send orders to fashion dropshippers that have the inventory in stock.
When a retailer sends orders to apparel dropshippers, the retailer is only purchasing the inventory needed to fulfill that order.
The retailer would have a partnership in place with clothing dropship suppliers. Retailers who partner with electronics dropshippers, jewelry dropshippers and furniture dropshippers can, especially, save a lot of money by only purchasing inventory when it is needed to fill an order.
Using this on-demand method, an online shopping website that uses the dropshipping method can typically afford to have a much wider product selection than those who fulfill orders directly.
What is a dropshipper example famous for its wide selection? Amazon, which has a seemingly endless variety of products. Although a vast majority of products are fulfilled by Amazon, Amazon also lists products that third-party sellers fulfill and ship. Amazon sellers dropship jewelry, electronics, toys, media products and more, allowing Amazon’s selection to continue to grow.
Another benefit to dropshipping is not needing a specific location. What is a dropshipper if not flexible? A dropshipper can be based in any location because they do not need a warehouse to store inventory. Anyone can dropship furniture or dropship jewelry as long as they have access to a computer and internet.
All-in-One Change Management Tools
Top Rated Toolkit for Change Managers.
Get Your Change Management Tool Today...
Negatives of Dropshipping
When answering the question, “What is dropshipping?” we see a lot of benefits. But there are some sizeable drawbacks to dropshipping as well. There are negative aspects to dropshipping that affect either the customer or retailer.
What is a dropshipper drawback? Possibly the most important drawback to mention is the lowered level of brand experience for the customer. For example, a customer orders a beautiful name-brand ring from an online retailer. The retailer, however, uses jewelry dropshippers to fulfill the order.
The customer never gets a chance to interact with the actual brand or have any kind of customer-to-brand experience. The retailers who dropship jewelry or other items, in turn, also have little control over this experience and could end up with dissatisfied customers.
Another negative aspect of dropshipping is issues and errors that can stem from the supplier. For example, a customer orders a specific laptop from an online retailer. The retailer’s electronics orders are outsourced to electronics dropshippers. However, the electronics dropshippers that received this order did not update the inventory and actually sold out of this laptop. Now, it is the retailer’s duty to inform the customer that his order is out of stock. Inventory issues are now the responsibility of the retailer.
Additionally, using apparel dropshippers or any other kind of dropshipper can affect the timeliness of an order. When an order is shipped straight from a retailer, there are few leaps and obstacles to maneuver; using a dropshipper can cost a retailer more and can also take more time to reach the customer.
Consider a customer who orders five clothing items from an online retailer. The retailer has to use two clothing dropship companies to fulfill the order. The retailer incurs two different shipping costs, but only charges one to the customer. One order might arrive in three days and the other order arrives in a week. Sending the order to fashion dropshippers can possibly delay the order for the customer and cause the retailer to incur extra charges.
Want to Start a Dropshipping Business? Begin Here!
Now that we have covered “What is dropshipping?” you might be considering starting a dropshipping business of your own. Many people have created their own business by using dropshipping and avoiding inventory cost. It is possible to start a business of your own with just internet and computer access.
What is a dropshipper business, and what does it look like? People create dropshipping businesses completely online. You need to have a website to showcase products, a supply of products to sell, and a marketing plan.
You should also know whether you want to have a wide variety of products with several dropshippers or stick to just one type of product, like those sold by home decor dropshippers, for example.
Those with basic internet and website knowledge should not run into many hiccups starting their business. However, what is a dropshipper to do if he or she has little internet experience? Luckily, the internet holds a vast amount of free information on setting up and running your own website.
After you set up your website, you should gather information about the products you want to sell. Beginning with your own interests and knowledge is a good place to start. For example, if you have expertise with antique jewelry and feel confident enough in your knowledge to successfully sell antique pieces, you should consider jewelry dropshippers for your business.
Search through companies that dropship jewelry once you list the brands you want to sell. Make sure your jewelry dropshippers have these brands and specific pieces in their inventory.
Marketing Your Dropshipping Business
What is dropshipping business marketing? It is the process of marketing your retail website showcasing the products you offer for sale. If you are new to website marketing, you will want to read some free online material to learn about Search Engine Optimization, advertising, social media marketing and other strategies.
Then, you will need to learn about your audience. Since you don’t have an audience yet, you need to understand who you are trying to target your products to. For example, if you want to dropship furniture for college dorms, you want to market your website to high school and college students and their parents. A good place to advertise to this group might be Facebook ads.
Regardless of the type of business you create, marketing is what gets your business out there for the world to see. Soon, you will be on your way to becoming a dropshipping entrepreneur and answering the question, “What is dropshipping?” yourself.
Popular Article: How to Build Business Credit & Get a High Business Credit Score
How to Find Legit Dropshipping Companies
Next comes searching for your supplier or suppliers. What if you want to dropship clothing for a children’s apparel store? Or, perhaps you are looking specifically for electronics dropshippers to sell the latest video games and gaming systems. A Google search for your particular interest might not lead you to many specific suppliers. Instead, try dropshipper listing websites like DropShipSites. This website lists dropshipping suppliers in a variety of categories, like jewelry dropshippers and home decor dropshippers.
After you draw up a list of a few potential dropshippers, it is time to narrow it down. Remember, the idea as a retailer using dropshipping is to limit your costs. If you use only one or two dropshippers, you are lowering your shipping costs. The more dropshippers you use, you are also increasing the risk of dissatisfied customers. All fashion dropshippers, for example, are different and may have varying shipping costs and schedules.
Here are some important points to consider before settling on your final dropshipping suppliers:
- Does the supplier provide good service? You as a retailer are also a customer of the dropshipper. If you need to ask a question about a specific clothing dropship, you will want to get a hold of the supplier as quickly as possible. Make sure it has 24/7 customer service via phone, live chat, or e-mail so contacting the supplier is never an issue.
- Take a look at its delivery times. You certainly want your customers to be happy with your shipping service. But your shipping service depends on the dropshipping company you choose. Jewelry and apparel dropshippers might have fast turnaround times, but it can take several days or weeks to dropship furniture. Do your research to find a supplier that aligns with your shipping goals.
- Do the product and shipping costs make sense for my business? You know the amount you want to charge your customers for products and shipping. You should research your potential dropshipping supplier to ensure that its prices are reasonable and fit within your projected costs. Electronics dropshippers, especially, can have high price tags on products, so choose wisely.
Once you feel you have successfully narrowed down your list, it is a good idea to place your own small order before setting up a contract with a dropshipper. For instance, if you want to dropship clothing, place an order with your top two or three suppliers.
Make sure it is a similar order so you can test the quality versus price, shipping cost, and the packaging. This quick test might help you pick the best clothing dropship companies for your business.
AdvisoryHQ (AHQ) Disclaimer:
Reasonable efforts have been made by AdvisoryHQ to present accurate information, however all info is presented without warranty. Review AdvisoryHQ’s Terms for details. Also review each firm’s site for the most updated data, rates and info.
Note: Firms and products, including the one(s) reviewed above, may be AdvisoryHQ's affiliates. Click to view AdvisoryHQ's advertiser disclosures.