Dropshipping is an option that is becoming more and more attractive as a successful business model for online stores. This distribution model is closely linked to online sales and relieves the e-commerce owner of logistic tasks. Therefore, before dropshipping is analyzed and how it can help online shop, let’s look at some basic facts.
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Dropshipping and e-commerce
For some years, e-commerce in Europe has been rising rapidly. In fact, according to IAB Spain and Elogie, 74% of internet users in Europe buy online, which means three out of four people! There were times when people did not have a good sense of paying with their credit cards online.
Of course, this was noticed by those who took care of the business, and they created online stores that were supposed to answer this important question with their potential customers. They have opened thousands of electronic stores that have become part of everyday life of their users with different levels of success.
And while one of the main advantages of the online store is a significant reduction in fixed costs (you do not have to pay rent for premises, there are no sales staff, nor do you have to pay water and electricity bills) both online and offline entrepreneurs have the same common problem: inventories. To sell, you need to store your product so you can prepare it for shipping to your customer. This can inflate the costs of your online store and reduce its benefits from physical trading. But keep the calm blood, here’s the dropshipping!
According to Salvador Esteve, co-founder of BigBuy, the dropshipping is a “business model that enables the launch of an e-commerce website with thousands of products without the need to store any stocks at all.” And when you overcome the ‘blockade’ everything else will go much faster. At BigBuy, we take care of everything regarding the storage and preparation of each order, and for the whole related packaging and sending to the customer. Now let’s look at this in a bit more detail.
Dropshipping: what is and how it works
Dropshipping basically represents the following: the consumer buys the product in an online store and the distributor receives the order. Once the order is completed, the dropshipping supplier itself sends the consumer his product.
To clearly explain what dropshipping is and how it works, let’s look at an example:
Steve wants to buy perfume online and deliver it to his home address. In Google’s search engine “Men’s Perfume Armani”, he finds an online store called “Perfume Amelie” and decides to buy. Make a payment and indicate your shipping information.
Marta, who owns Perfumery Amelie, receives Steve’s order. She works with BigBuy, so she does not need to send anything. Simply visits the BigBuy website and orders Giorgio Armani perfume at a lower, wholesale price.
When BigBuy receives the order, it is packed with the name and the address of Perfumery Amelie as the sender. Once done, the shipment is sent directly to Steve.
Steve receives his perfume at the appointed time and does not know that BigBuy has been involved in shipping. She gives a positive assessment for Perfumerie Amelie and recommends her girlfriend and her family to order perfumes there.
Marta has a new satisfied customer and receives as a profit the difference between the wholesale price at BigBuy and the retail price paid by Steve when buying a perfume.