Maybe you’ve heard of a thing called “dropshipping.”
If that’s the case, you might have a clue as to what it is. Dropshipping, in which orders are fulfilled directly from a manufacturer and payment is collected from customers in advance of product shipment, is said to make it possible to run a business without ever having to handle stock.
As a result of this clarification, we may still be confused and have additional questions. Is it possible to dropship legally? In your own words, what is dropshipping? In addition, what avenues of research are available?
In 2018, dropshipping’s popularity has skyrocketed as a game-changing approach to eCommerce.
In 2019, eCommerce retail sales are expected to reach $3.53 trillion, making it a massive industry. There has never been a better time to enter the market, as projections show it will grow to more than $6.54 trillion by 2022.
Learn all about dropshipping, how it operates, and if it’s even legal in the US with the help of this article. (Warning: it’s true.)
What Is Dropshipping?
The definition of dropshipping is pretty simple: In dropshipping, the retailer does not keep inventory on hand but instead forwards customer orders and shipping information to the manufacturer or another fulfillment center, which then ships the product directly to the customer.
That eliminates the need for stock-holding facilities and the associated costs. You can manage your shop from anywhere in the world and save time by not having to worry about packaging or shipping products.
That’s pretty neat, huh? So what’s the catch? Is it possible to dropship legally?
Can I legally use a Dropshipper?
As many have noted, this is the caveat that has caused the most concern. Surely if it’s that easy, it’s against the law.
So, to answer your question, the short version is that dropshipping is not a grey area or illegal activity.
However, since it is a novel form of conducting business online, many myths have developed around it. Many people are wary of using this approach to online shopping because of misleading information they have read.
Let us put an end to the misunderstandings once and for all.
How Does Dropshipping Work?
Many new businesses find success with drop shipping. You don’t need to go all out on expensive inventory, machinery, and packaging to get started.
The first step in starting a business is deciding what kind of product you want to sell. It’s okay, you don’t have to limit yourself to one specific market. Adapting to shifting tastes is possible.
Let’s say, for the sake of argument, that you’ve settled on selling women’s apparel. You can choose a domain name for your shop, register it, and then set up shop with a store builder plugin for WooCommerce or a service like Shopify.
You start looking for products and suppliers after you’ve opened your store. For their inventory, drop shippers frequently use international marketplaces like AliExpress. A subsidiary of the Alibaba Group, it generated over $24.8 billion in revenue in 2017, or it used software to locate Chinese dropshipping products.
After you’ve settled on a product, you can start negotiating prices with your wholesaler.
Is It Only Small Companies That Dropship?
Dropshipping may sound like a shady way for small online shops to take advantage of low foreign prices. To be perfectly honest, the opposite is true.
A large number of well-known businesses rely heavily on drop shipping to fulfill customer orders. You may be familiar with several businesses that use dropshipping.
In 2012, for instance, 34% of Amazon’s product sales were made via dropshipping. Dropshipping is a viable option for your company if it can help Amazon generate nearly $14.2 billion in sales.
Dropshipping is used by more than just Amazon and eBay, however. Similarly, Wayfair.com bases its entire operation on the dropshipping model.
How Do I Get Started with Dropshipping?
Following these guidelines will help you get your dropshipping business off the ground.
Step 1: Find a Supplier
Choosing a product and market niche is the first step in drop shipping. The next step is to source a product and a reliable supplier.
Once you’ve determined the correct product, you can contact the maker via the information provided. Get a list of the wholesale vendors by asking about it. Find out if these vendors will allow dropshipping by inquiring with them.
Talking to these vendors must be done in a businesslike manner. If you send an email that is poorly written, you can forget about getting a response.
Step 2: Set up Your Dropshipping Store
After deciding on a product and market niche, the next step in starting a dropshipping business is to secure a domain name. You can use a simple WordPress site and add WooCommerce.
Using a specialized service, such as Shopify, can be more efficient at times. In order to keep visitors on your site for as long as possible, these programs offer specialized plugins.
Notifying shoppers when their peers have purchased a product has been shown to increase average order value and increase the likelihood of a sale being made.
Step 3: Get Traffic to Your Store
Bringing customers to your dropshipping store is the third and, arguably, most difficult step.
To successfully promote your online shop, you may need to employ a number of methods. This requires familiarity with a variety of advertising methods, including but not limited to:
SEO that is organic for websites
Advertising on Facebook
Promoted links on Google
Learning how to implement these strategies will aid in attracting visitors to your online store. Even though advertisements are the most common way, dropshipping businesses are increasingly turning to other channels to reach their customers.
You can use Instagram posts and videos from sites like YouTube to get people in the door. If you run an online store, one of the best ways to get people to visit it is to promote it on social media.
It’s just as important to know how to attract customers to your online store as it is to your physical one. Your shop’s fate is in the hands of how many people you are able to sell to.
This is why many companies involved in drop shipping prefer selling on marketplaces like Amazon and eBay. Your target demographic already frequents these online hubs. Therefore, the customers they send your way make the small commission they take on sales worthwhile.
Is Dropshipping For You?
Dropshipping is a fantastic new option for small businesses to enter the e-commerce market without spending a lot of money on inventory.
To answer the initial inquiry, yes, dropshipping is perfectly legal. In a word, yes.
Request our assistance if you need assistance integrating your dropshipping store into your website.