E-commerce is probably one of the most effective businesses you can start today. According to Statista, the industry revenue hit nearly $5 trillion in 2020 alone. By 2020, it could grow to $5.4 trillion. There’s no better time to be part of it than today.
However, you may be someone who doesn’t have any experience in running a business, more so e-commerce. You are also worried about where to buy the products, keep your inventory, and market your goods.
You’re in luck because, today, you will learn a secret a growing number of entrepreneurs use to break into e-commerce: dropshipping.
What is dropshipping? The process is similar to buying goods from a manufacturer or wholesaler. You place an order based on your needs, forecast, or market data. Then the vendor processes it for you. But here’s the thing: they don’t ship the goods to your store.
Instead, they deliver the items straight to your customers, with the products bearing the name and even the logo of your business.
For this reason, dropshipping offers a lot of advantages, particularly for first-time e-commerce marketers. First, you can control your spending. Usually, you will receive the orders from consumers first before you inform the vendor or supplier.
Second, you can forget about renting space to keep your inventory or buying physical products. You can run the business in the comforts of your home.
Most of all, you can use a lot of tools to make dropshipping easy:
1. E-Commerce Platforms
Before, when you want to set up an e-commerce store, you needed to begin from scratch: build a site or use a content management system, like WordPress. For beginners with only basic or zero technical know-how, this process was already complicated.
Although you can still use the old method today, especially if you want to have greater control over the look of the site, you also have another option, which is to use an e-commerce platform.
What is an e-commerce platform? It is usually a comprehensive application that includes all the plug-ins and features you need to run an online shop. Examples are:
• Products page, where you can upload photos, add descriptions, and allow customers to place their orders
• Payment processing, which provides customers different payment options from credit cards to e-wallets
• Marketing, which may include integration of your social media accounts
• Auto-calculation of shipping fees
• Creation of discount or promo codes
• Integration of third-party apps like Oberlo
One of the best e-commerce platforms is Shopify. Currently, it already has 1 million users around the globe. You can also select your pricing plan, which you can upgrade as your business grows.
2. Returns Management
In dropshipping, delivering goods to consumers seems easy. Returns can be more complicated since the recipient may not know that you are not the manufacturer. If something happens to the item along the way, or if the product is deficient, the customer will process returns with you, not with the dropshipping supplier.
How do you do it? Fortunately, you can also find a Shopify returns management tool. This platform may help you with reverse logistics, which just refers to the movement of goods from customers back to the seller.
Returns can be costly for both the customer and the business, especially if the agreement between the manufacturer and you says that you will end up receiving and handling such products. A smart reverse logistics strategy, though, can minimize the losses by allowing you to resell the products in a different way.
3. Social Media
Social media remains one of the most effective methods of e-commerce marketing. According to HubSpot’s collated data, over 400 billion people are active social media users during the first quarter of 2020.
Some of the biggest generations are also here. In 2019, almost half of the baby boomers had a social media account. Meanwhile, 77.5 percent of the users were Generation X while over 90 percent were millennials. In other words, social media teems with target users.
Moreover, more than half of social media users use the apps like Facebook or Instagram to research products and services. In fact, this activity is so popular that social media sites are taking notice.
Facebook already allows business owners to run ads, and Instagram is planning to boost its video capability to offer better marketing techniques to users. You can also use sites such as Pinterest to sell goods.
Apps such as Shopify will allow you to integrate social media accounts, which creates a more seamless way of marketing your goods. Note, though, that to make these channels work, create a business account instead of using your personal profile.
Like any business, dropshipping comes with challenges and problems. The good news is because the infrastructure and process are already in place, running your first e-commerce site will be less difficult.
