How to build a profitable dropshipping business?

Online stores have become a very popular way to organize a business selling a wide variety of goods. Their number is growing exponentially every day. How to explain such popularity of online sales? Firstly, it is very convenient: all you need to open a resource is a computer and Internet access. Secondly, it is much cheaper to maintain an online platform than a regular store.

Analyzing the experience of modern online businessmen, it can be noted that opening an online store using the dropshipping system is a good solution for organizing your business with minimal investment. With the help of Stelvel ltd you will be able to develop it competently and systematically expand the range, the profit will grow monthly!

For sales on the Internet, you do not need to rent a room, hire staff, or purchase expensive equipment. In an ordinary store, all this is the main financial burden and requires high costs. In the case of an online store, everything is much simpler: to organize a business, you will need a room for storing goods (many people get by with their own apartment) and one or two assistants (if a large client base has been accumulated).

Advantages of opening an online store:

No need to rent retail space

Coverage of a large audience

Ability to conduct business remotely from anywhere in the world

No need for multiple staff

Minimum maintenance costs

But not everything is as simple as it seems at first glance. Opening an online store requires a fairly significant initial investment. Their volume primarily depends on the type of goods sold. To earn a decent reputation, attract new customers and retain old ones, you need to offer them great quality products that must always be in stock.

Otherwise, delivery times will be extended or orders will be disrupted. To avoid such negative moments, it is required to create an initial stock of goods. This leads to large investments that do not pay off immediately. But what about those entrepreneurs who want to organize their own business without an impressive start-up capital. In this case, a dropshipping system is used, with which you can open an online store with minimal investment.

What is dropshipping

This English term literally means "direct delivery". This is a very precise definition of a supplier based business system. With dropshipping, the entrepreneur is an intermediary who sells the goods of the wholesaler to the final buyer. A businessman earns from the difference between the retail price (which he sets on his own) and the wholesale price (set by the supplier).

This business model is beneficial to both parties. The wholesale supplier is unable or unwilling to engage in retail sales, scouting for potential buyers, and entering into "small" deals. It is more convenient for him to find partners who will be happy to perform these functions on their own, selling products. The supplier's responsibility is only to pack and ship the ordered goods.

The owner of an online store is extremely interested in dropshipping, because in order to trade, he does not need to purchase all the goods from his catalog, which reduces costs to a minimum, eliminates worries about the storage location of products, compliance with expiration dates and other nuances. The sole costs of the entrepreneur will be marketing costs and the maintenance of the online store.

Dropshipping Benefits:

No large initial investment required

There are no financial risks (since the online store does not purchase goods for the future, but settles with the supplier only upon the sale)

No need for a warehouse to store goods

Ability to work with several suppliers at the same time, expanding the range of products and increasing profits

Ease of doing business (running an online store requires a computer, internet connection and phone, while packaging and shipping is handled by the supplier)

Despite a lot of advantages, there are still risks in dropshipping. For example, a sellable item may run out, which will delay delivery or cause one or more orders to be canceled and, as a result, the loss of customers. But this probability is low and can be avoided if you cooperate with several wholesale suppliers at once.

How to set up a dropshipping business

The efficiency, development of the dropshipping business and the reputation of your online store directly depends on the reliability of the supplier. Therefore, when choosing a partner company, you should not rush, but carefully study all possible options. First you need to read the terms of cooperation in detail. Most wholesale suppliers do not require additional monthly fees. Therefore, if a company wants to receive payments in excess of sales income, it is worth thinking carefully before signing an Agreement with it.

You also need to check the quality of the supplier's service. Several important points require attention at once:

Detailed description of the goods and their conformity to reality

Efficiency of communication with the manager (the representative of the supplier should always be open to solving business issues)

Timely provision of information about goods (a reliable partner will notify its distributor in advance of the availability of products or possible delays in deliveries)

Variability in delivery methods (the supplier must be ready to send the goods by any available transport company chosen by the client)

After signing the Agreement with a wholesale partner, you must select the categories of goods that will be sold in the online store. The price for them must be indicated above the wholesale price, taking into account the desired profit. But you should not overestimate it much, as customers can buy the same product from competitors. Therefore, you should first monitor the market.

When making a purchase, the manager of the online store transfers the order data to the supplier, who packs and ships the goods to the specified address. Having received it, the client makes payment at the retail price. Then the manager transfers the funds to the wholesale partner minus the established difference. The more transactions are made, the higher the profit of the online store. Therefore, the entrepreneur should be interested in its promotion.