* Dropshipping Business Model. *
One of the online opportunities to consider as you plan your journey into multiple streams of income is the Dropshipping Business. It is easier than most people think. You can begin to earn as soon as your store is launched and all things put in place.
Let’s walk through a quick guide on this amazing business.
What is dropshipping?
It is a retail business where the retailer does not have a physical stock of products. Instead, when a customer orders and pays for a product, the retailer having confirmed the order(s) then orders it from a third party who after confirming payments and other information from the retailer ship the product directly to the customer. As a result of the above the retailer never sees or even handles the product sold.Highlight!
The retailer only buys item which customers have already paid for.
The picture below explains further, how the dropshipping business works
A glimpse into the supply chain
The Business Dictionary defines the supply chain as; “Entire network of entities, directly or indirectly interlinked and interdependent in serving the same consumer or customers.
However, for the sake of this lesson, I will constrain it to the Manufacturer, Wholesaler and Retailer.
The Manufacturer – Creates the products and sells in bulk to the wholesaler
The Wholesaler – Buys in bulk from the manufacturer and sells to the retailer
The Retailer – Buys from the wholesaler and sells to the public;
If you are interested in engaging in this type of business, you fall into the retailer category
What do I need to start ?
Listed below are primary requirements, although not listed in order of priority but are most essential to get you started with your business;
- Determine your niche products
- Find the right suppliers
- Set up an online store
- Get equipped with gadget (laptop and Internet access) and tools to keep in touch with your store
Why Dropshipping Business stands out – The Benefits
- Low Start-up capital and running cost
Traditional retail business needs to invest upfront in stocking the products but with dropshipping model you don’t need to tie up huge amount of capital to get started. - Very easy to start
e-commerce business is generally much more easier to start. You do not need to break your neck about getting a brick and mortal store/warehouse, no need to worry about loading and off-loading of goods and the associated logistics etc.. - Flexibility
With dropshipping business, your store is situated everywhere you are. With your laptop or mobile device and a good internet connection, you carry your business everywhere you go. You can respond to customers and manage your store anytime anywhere.
Dropshipping Business Process
(Ordering process)let’s say your store is www.storefizcos.com the customer places order for an item, the customer and your store receives an email confirmation automatically generated by the store software. The payment is also captured during the checkout process, money automatically been deposited into storefizcos account.
Next, storefizcos places order with its supplier either automatically or by simply forwarding the order confirmation email of the transaction (the supplier already have a way of closing transactions with storefizcos) or storefizcos pays as it orders, depending on the dropshipping terms.
