Generating $85 billion of yearly revenue and responsible for 23% of all online sales, dropshipping is an industry that continues to go from strength to strength.
For some, dropshipping is a side hustle and for others, it has proved to be a lucrative way of selling online without having to factor in the overheads of selling traditionally.
So what exactly is dropshipping, and what are some key things to know about how the industry has changed for 2024?
Discover the lowdown from our web development and ecommerce experts here at Imaginaire.
What Is Dropshipping?
Dropshipping is a type of retail fulfilment whereby the store selling the product doesn’t actually stock the product themselves. Instead, placing an order automatically purchases and dispatches the products from a third party, and it is the third party who ships the product to the customer.
This means the original dropshipping store never sees, touches or interacts with the products they sell. Instead, their website merely acts as the point of purchase for the customer.
It’s possible to create a dropshipping store on several platforms, although Shopify happens to be one of the most popular options, especially with the low startup costs and overall ease of use.
You might be wondering why a third party would work with drop shippers, or even why dropshipping works given the customer could just as easily purchase from the third party seller themselves.
Simply put, drop shippers make a profit on every item they sell, and many third-party sellers treat the sales almost like an affiliate program, in that the drop shipper is sending extra business their way.
Also, not every online store has the right visibility or positioning to appeal to certain audiences. Dropshippers can hone in on certain niches and really focus on marketing and customer service, all without the cost or pressures of stocking the actual items themselves. This can result in a better experience for the customer.
Is Dropshipping Worth It?
As with any business idea, you need to do your research before jumping into dropshipping to make sure it is right for you personally. Plus, what’s needed to actually make a success of your new venture.
That said, dropshipping is considered low risk since as noted above, a dropshipping store doesn’t purchase stock in advance. Instead, orders are only placed with the third-party store when a customer makes a purchase. This also means dropshipping stores don’t have to factor in warehousing or storage costs for their goods either, which also lowers the risk of dropshipping.
Something to consider is that there is a lot of competition, and the profit margins on items can be low. This is all the more reason why taking the time to learn how dropshipping works is essential, especially when it comes to learning about the advantages and the pitfalls.
Things To Know About Dropshipping In 2024
Dropshipping absolutely is a viable way to make money online in 2024. But some common things can erode consumer trust, and ultimately mean that a dropshipping store doesn’t achieve a sustainable number of sales.
Customers need to trust the website – If a website has been created quickly ‘just to try and sell something’ users can probably tell. Therefore, they are unlikely to visit or purchase through a website that doesn’t seem legitimate or secure.
Long wait times or poor products won’t do – Dropshippers charge a higher price for the product so that they can make a profit on the original third party product. If customers receive a product that doesn’t reflect the price they paid or takes too long to get to them, this can give the dropshipping store a poor reputation. That’s why drop shippers need to research their suppliers very carefully.
Digital marketing is essential – Even if the prices are a steal, products on dropshipping stores won’t sell themselves! That’s why investment in various digital marketing strategies is essential, with SEO, PPC and Instagram Ads being some of the most effective ways to draw customers in.
Make Your Dropshipping Or Ecommerce Store A Success With Imaginaire
Are you looking to create or improve an existing dropshipping store? Whatever type of ecommerce store you own, it pays to ensure the design, development and marketing are set up to maximise conversions.
Imaginaire are ecommerce experts, having worked with businesses from across the UK and beyond, including through the creation of Shopify stores.
Allow us to help your dropshipping or ecommerce store succeed by getting in touch with our team on 0115 697 1367 or by filling out our contact form.
