E-Commerce And Dropshipping (The Pros And Cons)

Source: DHgate, Tag: Dropshipping

Want to set up your own online business? Discover the pros and cons of e-commerce and dropshipping, and kick-start your online entrepreneurship.

The world today is interconnected, thanks to the internet. Through this connectivity, many ideas have emerged; one of such ideas is the business concept of e-commerce dropshipping, which allows entrepreneurs and sellers to sell a product with the traditional storefront. The most exciting thing about this concept is that retailers can sell; products without holding any inventory.
Dropshipping business concept can at times be confusing for some people who are new to the field. Some people at times confuse dropshipping for e-Commerce. However, dropshipping has a different fulfilment method and concept different from e-Commerce.
In this article, we will expand on both the idea behind dropshipping and e-Commerce. We will give some insight into the difference between the two; we will look into the fulfilment concept of both business models.
Finally, we will discuss some of the best places to dropship online, give you some insight into why DHgate is one of the best places to dropship and details on the benefits of dropshipping on DHgate.

The e-commerce concept
The more interconnected the world is, the more the demand for people to see what's going on worldwide. This also influences our taste and commerce. It is usual to buy the clothes you see on your friend in France while living in the US. With such interest comes online payment, which allows you to pay for anything from anywhere you are.
With the growth of online payment and the more secure they become, businesses started selling more products online to cover more markets. Since their users can pay them immediately online, the process becomes effortless. Therefore businesses focus on creating ways for potential buyers to see their products across the world and buy them from anywhere; this is the true meaning of the e-commerce concept.
The exciting thing about e-commerce is that it is a growing industry, and that's because it is effortless to join in on the business. Anyone joining has all the resources they need to do so, and most of the resources are free.
Many businesses across the world that run traditional brick-and-mortar businesses have transitioned into online stores. First, because it is less expensive, the covid related movement restriction has shown the need to create a sustainable and safer business system. And while there are many types of e-commerce business models, dropshipping and e-commerce fulfilment has become the most popular.
E-commerce fulfilment concept
The eCommerce fulfilment business concept revolves around buying items or products in bulk and wholesale and selling all these products online while fulfilling the order from your home. Using this business model, the retailers have to hold inventory of the product they are selling.
Business owners using the e-commerce concept can use online tools to brand themselves through the website; for example, they can use WordPress to build up their digital storefront and add all the plug-ins they need. Over the years, WordPress has become robust enough to build anything. You also have tools like Shopify, which is very popular for eCommerce building. Square space is another tool that can be used.
When starting an e-commerce business, you can easily use a spare room in your home to store your goods and fulfil them. You can also use your garage or storerooms; that's has been the story of most successful e-commerce entrepreneurs. But as time goes and your business becomes big, you will need to rent a warehouse to store your goods and fulfil your orders.
Dropshipping business concept
Dropshipping is an exciting business model that has become very popular. Dropshipping means the online store owner does not own or have the inventory of the goods or items sold in their homes or any store; they instead automate or outsource their sales.
The business model is very similar to e-commerce, but the significant difference here is how the orders are fulfilled; one holds the inventory and fulfils orders from their store. While the other does not have the inventory.
As a drop shipper, you will have your online store and brand. You will manage users and give them support and create a great customer relationship. Still, dropshippers do not manage the fulfilment of their orders. This concept has made the business model very interesting because you can quickly go into the business with a very minimal amount of capital; that's because you don't have to pay for any product until you have sold it.
The process is as simple as displaying some products and information about a product you source from DHgate and then placing the product on social media with your price tag. If anyone orders that product from you, you then go to your supplier on DHgate, order it from your supplier, and tell them to send it to your buyer's address. You can even tell your supplier to add your brand name to the product package.
Dropshipping vs. E-commerce Fulfilment
Any of these business concepts can be a success, and there have been many people who have done any of them and made good money from these concepts. Another angle is that we have heard success stories of those who started as dropshipper and later became more of a mixture of both eCommerce and dropshipping.
Pros and cons of eCommerce fulfilment
Fulfilling orders as an e-commerce business have its advantages and disadvantages; it can work for some people while it can be difficult for some other people. You have to use what works best for you.

• 1. The e-commerce fulfilment business system is suitable for anyone who sells their product. This can be the product they build themselves or the product they sourced and branded themselves; whichever option it is, this business model can work greatly.

  2. The e-commerce business model allows you to brand the product better, and you can easily brand your company using this concept as well, for instance, you can add products into branded plastic with your logo and name.

  3. Another advantage of e-commerce is that you have total control over fulfilment, no surprises or disappointment if you handle everything from your basement. Still, if you hire a third party to do the fulfilment, you might have a little less control, but you can still have more power than dropshippers.

  4. The most common disadvantage of e-commerce fulfilment is capital intensive; you have to invest money in building your digital storefront. Buying the inventory and delivering it can also cost you overhead at times. Therefore the capital pulled into this business makes it difficult if things don't work out.

  5. Another disadvantage is that for you to scale this business, you need to do good planning; growing will lead to more pain points and expenses.

  6. However, the e-commerce fulfilment system allows you to have more profit because of the time and effort into sourcing for the right price so that it might be worth it.

• Pros and cons of dropshipping
  Dropshipping has a lot of advantages, but it also has its disadvantages. While this business model might work perfectly for some people, it might not be easy to pull this off.

  1. The concept of setting up a dropshipping business makes it so interestingly easy to start and less expensive because you don't have to pay for any inventory or have any store. All you need is to set up your website and start selling.

  2. Because a dropshipper does not hold any inventory, you will only pay for the website and paid ads. When you are trying to scale, you must ensure that your vendor or supplier can scale with you. If not, you might have to source for another supplier.

  3. Because of the low overhead, you can carry out some experiments when doing your paid ads, and you cant test your user's response to a different product., and if it all fails, you have not lost much.

  4. Dropshipping is a business concept that allows you to work anywhere, just with your laptop and internet connection.

  5. However, there are downsides for dropshippers. One of the most notable ones is that, as a dropshipper, you don't have total control over the handling and fulfilment of the product you sell to your customers.

  6. Building your brand also becomes difficult as a dropshipper; although you can do that from your website, you need to put in more effort.

  7. The profit margins are lower for dropshippers because you want to ensure that the price difference from your website is not far off. And unlike the e-commerce concept, dropshippers don't get their prices at a wholesale price.

• Dropshipping with DHgate
  DHgate is a leading and international B2B marketplace located in China. The platform connects China manufactures, suppliers, and buyers across the globe. The website is famous for selling quality products, and there are no minimum orders before purchasing items. You can order as low as one item and below $1, depending on the products.
  DHgate has varieties of product categories plus over 22 million product listings in their inventories. It has 650,000 committed China-based suppliers and over 3 million buyers from over 230 countries and regions. It offers incredible wholesale prices, and you can save more and buy at low prices when you make bulky orders. DHgates offers fantastic benefits and top-notch services.

  1. Buyers' protection after order confirmation

  2. Guaranteed Secured and mobile-friendly payment

  3. Offers a refund if the customer's item is not delivered or does not match the description.

  4. Exclusive and flash deals up to 50 per cent on products, fashion, accessories, and jewellery.

  5. Excellent QC teams, products are certified to be in good condition before shipping.

  6. Over 20 warehouses in countries like the US, UK, and France, Shipping within these countries guarantees you a fast delivery within 2-5 days.

  7. There is an on-time delivery badge for tracking and delivery services, which means you can trust your supplier to deliver your orders on time.

  8. The platform offers world-class standards of China wholesale product sourcing. Best suppliers and excellent customer service tag is added to products on the website.

  9. Partners with top courier companies such as DHL, FedEx, American Express

  10. Transact in over five multilingual languages like German, English, Fresh, Arabic, Italian, etc. You can always communicate in a comfortable language.

The above characteristics place DHgate as one of the best places to source suppliers and manufacturers either for your e-commerce business or your dropshipping business. The platform is set up for you to be successful using any of these fulfilment models.

FAQ
Which of these fulfilment models should I pursue?
The opportunities in both dropshipping and standard e-commerce business models are enormous, and you can choose anyone you desire. The one you choose should depend on your capital, resources, interest, and long-term business goal. Most people see dropshipping as the more straightforward approach because it cost lesser to start than the e-commerce fulfilment approach. Still, then you can grow toward the standard approach without much financial cost.
Where can I dropship?
Many websites online to drop ship; some of the most popular are DHgate, Alibaba, Aliexpress, Madeinchina, Amazon, Indiamart, and many more. However, DHgate has all the resources to help you become successful as either a dropshipper or standard e-commerce business owner.
How do I market my online business?
Marketing your online business should be one of the most significant parts of your business planning. For your dropshipping or your eCommerce digital storefront, you can quickly market them on social media like Facebook, or Instagram, where you can funnel your customers and convert them.
Which of the two is the most profitable?
The profitability of any business depends on your approach and planning, and you can make a profit from any of the two fulfilment approaches. However, the standard e-commerce fulfilment approach helps you become more profitable. You can source your product from a supplier that offers a lower cost and buy at a discount because you are buying in bulk.