Dropshipping in India?Understand before you start!

Almost all of us are eager to start our own business and earn money. Right? And you might have come across a lot of ways to earn money.Drop shipping is also one of the method that can help you earn money and has potential to make you rich! But wait…..Just like any other business Dropshipping also has a catch! So lets explore……….

What is Drop Shipping?

Let us consider a manufacturer who makes a product X.This product is passed through a chain where in each step the price increases as it passes through retailer.Retailer is a person or a business that sells products or goods on a small scale.Local shops that are in your area are also retail shops, Big Bazaar is an expanded version of retails shop and is the best example of it.

To understand Drop shipping consider the following fig:

Drop shipping.png

As depicted in the above figure the price of a product increases when it goes up in the pyramid and this is where drop shipping comes into picture.In drop shipping you direct a product directly from the manufacturer and gives it to the customer.I used the word direct because you don’t actually buy the product and store it, rather you direct the manufacturer to deliver the product to the customer.You pay the delivery charges to the manufacturer  and your profit is the difference between the retail price( price that local customer pays) minus the manufacturing price.

So if a retailer gives a product in price x whose manufacturing cost was y then your profit will be Y-X-Shipping charges.

(Read till end to know all aspects of dropshipping before getting into any conclusion!)

Ways to do it:

In  the previous section I explained what exactly is Drop Shipping. Here we will talk about ways to do drop shipping.Here you go:

  1. The method I mentioned above can be used in cases where you know few manufacturers who sell on amazon, flipkart, ebay etc.You can convince these manufacturers to provide you shipping service for the customers coming on your website or a blog or say any social media pages or groups.
  2. Some people just copy product specifications form amazon or flipkart and copy it on e-bay or aliexpress or vice versa and sell it for much higher value( Higher then the sum of shipping charges plus product charges)  and the difference is their profit.You can gift wrap a product on Amazon and ship it to the customer on eBay who is looking for thay product at a higher price
  3. You can also use shopify.com or aliexpress to start your business in dropshipping.This topic requires a separate blog and I will soon write on this topic

In most of the cases above three methods are used.But there are many more ways to implement Dropshipping.Just like any other business dropshipping also requires experience and good marketing skills.

Why you should do it!

Dropshipping is beneficial because you dont need any space to store any product or purchase it.Only thing that you have to do is create a contact between manufacturer and consumer.

It is easy to implement.You only need an internet connection and a laptop/smartphone or a PC.Rest depends on your marketing skills, your strategy, and your understanding of online market.

Many people who are strategically planning this are earning a lot through dropshipping. You can do it too! Just wait – learn – think and then implement .Most important part is funds management and keeping patience.

Keep reading the end is most important!

Why you should not jump into conclusion!

Dropshipping has gained popularity in India and many people are already investing into it.As the competition is increasing ,people are reducing their profit margin to survive in this situation.Product purchased at 100  ₹ are sold at 105 -150 ₹ (Just for example-generally profit is more or in this range).

Moreover you have to consider shipping charges which varies a lot! You must be aware of these factors while getting into dropshipping.

Most important is your customer.If a person buying a product at X ₹ from your website and that person finds the same product at much cheaper rate on other website than from next time that person wont come back to you from next time.So your rates should be very genuine to retain the customers.

Also in most of the cases drop shipping gives a very short period income and is not very beneficial for long term growth (This definitely depends on your marketing strategy and your financial intelligence)

Also if you are directly giving the data to the manufacturer without channelizing the customer through your website then in that case you wont be able to create customer database and hence wont be able to trace the customers next expected purchase.

Conclusion: Before taking any step into dropshipping THINK about all the aspects and study the market.Understand from others mistakes and work on it to build your empire.So just WAIT- LEARN – THINK – IMPLEMENT

To know more about a particular topic you can put the requirement in the comment section or mail us at neotechsters@gmail.com

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