Tammy : People spend more time on the computer nowadays, maybe studying, working or doing business, it’s just that the rate of people spending time on the internet is getting higher every year. That’s why we are here to help you build your own start up ecommerce business, giving you ideas on what is trending or is on demand in this competitive market. What we’re going to share is one of the most demanded ecommerce businesses that will help your products grow worldwide. It’s drop shipping. So if you don’t have any idea or want to learn more about this, I am here with Ray Ng the founder of Unipro Consulting Limited and we will be sharing ideas about this topic, Hi Ray, thank you for being with us.
Ray: Hi Tammy, Thank you for having me today, and I am glad to share ideas about this drop shipping as a start up business. First, can you tell us more about drop shipping?
Tammy : Yes, of course I am happy to discuss this with you and our listeners. Well, dropshipping is a retails fulfillment method where a store doesn’t keep the products it sells in stock.
Ray : So you mean they don’t need a place to store the products?
Tammy : Yes Ray that’s correct, instead , when a store sells a product using the drop shipping model, it purchases the item from a third party and has it shipped directly to the customer. As a result, the seller doesn’t have to handle the products directly.
Ray : That’s great! This is very hassle free as you don’t need to to inventory as well.
Tammy : yes! Actually, The biggest difference between dropshipping and the standard retails model is that the selling merchant doesn’t stock or own inventory. Instead, the seller purchases inventory as needed from a third party—usually a wholesaler or manufacturer—to fulfill orders.
Ray : In the previous topic we discussed, I remember about the LAZADA logistics in Hong Kong, is that similar?
Tammy : Yes, This is actually similar to logistics in Hong Kong for LAZADA, what sellers do is to send their item as bulk in Hong Kong, and the logistics will take care of it. You may check our LAZADA podcast about that. So actually you can do dropshipping anywhere in the world.
Ray : Can you tell us why we need to consider drop shipping as a start up business when there is a lot of business offered in the online platform?
Tammy : Well, first of all, online drop shipping is a stress free way to build an online business, since you don’t need a stock or handle the items you are sellings, you don’t need a lot of money to start your online business. Limited funds is okay for a start up.
Ray : Okay, so you mean if you don’t have much money and wanted to start a business, this is possible?
Tammy : Yes Ray, this is possible with those who have limited funds. However, hardwork and perseverance is a must if you really want to be successful. Well of course, this works in all businesses.
Ray : I agree with you that of course, when you start your own business, whether small or big, online or brick and mortar, hard work is a must!
Tammy : Yes, to summarize what really drop shipping is all about, and why people should consider this as a start up business — To someone who is new to the online business world and looking to break into the ecommerce scene, as it is really booming. If you already have a supplier and know their products, you might want to start selling them. You don’t need to maintain an inventory, a warehouse to store your products as I mentioned, or even having to ship your products to your customers yourselves. What you only need is good marketing and an online shop and of course a good internet connection. To better understand how drop shipping works, First, The customer places an order for a product on the retailer’s online store. Second, The retailer automatically or manually forwards the order and customer details to the dropship supplier and the third, The dropship supplier packages and ships the order directly to the customer in the retailer’s name.
Ray : Okay, now that you explained what drop shipping is all about, is there advantages and disadvantages for this business?
Pros and Cons of drop shipping
Tammy : Well, of course there are Pros and Cons,
Let’s talk about the Advantages :
Easy to set up – it essentially involves just 3 steps—find the supplier, set up your website and start selling the goods! To someone who is new to the ecommerce industry.
The Cost of Setting Up Your Dropship Business is Next to Nothing – because all you have to pay for is the associated costs of running your website (hosting, theme, apps, etc.).
You Don’t Have to Worry About Exorbitant Overhead Costs – The fixed costs of managing the website is all that a business owner has to worry about.
The Risk of Dropshipping as a Business Model is Significantly Lower – If the business doesn’t sell products it still doesn’t lose anything, so there is little to no pressure about having to sell your inventory.
The Business Can be Run from Anywhere & is Location Independent.
There is Lots of Variety When it Comes to the Products You Want to Sell – You can actually do anything under-the-sun.
More Time & Resources to Scale Your Business – With dropshipping all you have to do is send more orders to your dropship supplier and then let them handle everything else while you earn the profit and are left with more time to develop your business plans and scale!
Reduced Losses on Damaged Goods – Since the shipment goes directly from the supplier to the customer, there are fewer shipment steps involved which drastically reduces the risk of damaged items while moving from one physical space to another.
Ray : Hearing this advantages, gives hope to people who are interested in this business. As you can run this business anywhere in the world. You just need a good connection and a supplier for your products. A great online business. What about the disadvantages?
Tammy : So of course, if there are advantages, there are disadvantages.
It is not easy to find a good, reliable drop shipper that does not serve thousands of other merchants.
You don’t control anything except your prices and the products that you “offer”.
Potential quality control issues
Risk in offering and selling products that are no longer available from the drop shipper supplier resulting in potential customer service issues
Overcrowded market, with the dropshipper supplying the same products as you have to thousands of other drop ship sellers like you.
Your store is only as good as your ecommerce platform
Ray : Drop shipping really needs hard work. It is not just setting a system that runs itself, orders come in, manufacturer ships and you pocket the difference. Since you may be just one of the merchants working with the same drop shipper and hustling for the same dollar, you need to make every effort to differentiate your business from the others.
Tammy : Yes Ray, that’s correct, with every business needs hard work, effort and time to be successful. Plan properly your business before you operate to avoid wasting time, effort and money. This is just one of the example to start your own ecommerce business in this booming online business. I hope you get ideas with this and start your own. If you have any questions or needs consultation, you can visit our website found in the description below or message us directly and we will be happy to assist you.
Ray : Thanks Tammy for this topic, this ecommerce business example is actually a low cost for a start-up. It will be a great start to those who have limited funds and would like to do a start up business. Thank you for sharing this to our listeners, they can research more about this, and if they are ready to start their own business, they can register their company with us anytime.
Tammy : Yes Ray, once again, thank you so much for listening, i hope you get ideas from us. Thanks Ray!
Ray : Thanks Tammy!