What Is Dropshipping?

Dropshipping. It's a business model which continues to grow in popularity, serving both fully-fledged enterprises and small, part-time operations. Whether you want to launch a multi-vendor marketplace, dropship from larger wholesales, or build an additional revenue stream in your business, here are a few things to consider.

What Is Dropshipping?

Dropshipping is a type of fulfillment model whereby a seller lists a wide range of items for sale in their online store, without having a physical warehouse full of stock waiting to be sold.

When a purchase is made, the customer's order is routed back to the supplier of those products, who then ships the item straight to the customer on behalf of the seller, often white labeled with the original seller's branding, for a seamless delivery experience.

The Benefits of Dropshipping

Investment and Risk

One of the key advantages of this model is that the seller does not hold onto the inventory - the 3rd party vendor handles both the inventory and the delivery. Due to this fact, the initial investment needed to create a dropshipping store is far lower than more traditional methods as costs related to inventory management and distribution are greatly reduced or eliminated entirely. Therefore, companies can divert more resources, like time and money into growth.

High Scalability

Due to its unique properties as a business model, dropshipping is highly scalable. As the popularity of the website increases, so do the opportunities to forge stronger partnerships with a wider range of suppliers, allowing companies to further expand their product catalog. Without the expenses of traditional overheads such as rent or distribution, more money can be invested into growth.

Operational Flexibility

A core advantage of the dropshipping model is the flexibility it can offer to your distribution operations - as the end supplier handles delivery, the need for storage space on your end can be greatly reduced. While it can save you money, it can also be useful when it comes to industry disruption or when choosing to pivot in a new direction, making it easier to handle such situations.

Recommendations For Retailers

Quality Is King

When setting up a new dropshipping store, it can be tempting to list vast selections of different products in an attempt to appeal to as broad an audience as possible.

However, this may have the exact opposite effect and ultimately deter potential customers. The reality nowadays is that the modern consumer doesn’t have the time or the inclination to browse massive product inventories. The best approach is one of curation - of carefully crafting your product catalog to appeal to a core target market. By choosing to target one particular segment, you are far more likely to be successful rather than stretch your efforts too broadly by targeting multiple customer profiles.

Focus on high-quality, hand-picked products, chosen with your customers in mind. Take the time to understand your customer base and tailor your catalog and site towards them as much as possible.

Blend dropshipping with in-house fulfillment. Many of the most successful dropshipping businesses offer both dropshipped products and products which are fulfilled in-house. This may give you an edge over your competition in terms of shipping times. With Onport, you find dropshipping platform software that will allow you to maximize your product offering and streamline your entire marketplace operations.

Focus On Automation

It can be tempting for those new to dropshipping to try to manage everything manually, but as your operations scale, this will becoms more and more difficult. If you focus on automation via a dropshipping platform from the start, you’ll never have to worry about shipping rates, inventory problems, or accounting. You’ll have plenty more time to focus on your marketplace, ensuring your images, product descriptions and website are fully optimised for conversion. Automation can also empower companies to focus on refining and reinforcing their value proposition and USPs.

Choose A Future-proof Solution

As with any business venture, it is important to support it with the best available assets to ensure success. When it comes to running a dropshipping operation, it’s vital to have a robust dropshipping platform for gaining a full and in-depth operational overview.

While this may seem obvious, there is also the need to pair this requirement with that of flexibility, enabling you to pivot faster in a different direction should it be required. Recent global event have only compounded this requirement - your operations may need to adapt quickly to rapidly changing macro environmental conditions. It will pay off in the long term to take the time to investigate the best dropshipping platform for your particular business objectives.

Having a dropshipping platform which offer you such flexibility can be crucial in ensuring that your business remains viable in difficult circumstances.

Onport - Your Core Partner In Dropshipping

Onport is an ecommerce marketplace and dropshipping platform enabling companies to centralize the core areas of backend marketplace dropshipping operations using next-generation composable technology - inventory syncing, order routing, shipping workflows, payment automation, and returns management.

The Onport Platform can accommodate both those seeking an out-of-the-box solution and, through an API with +3.000 endpoints, those who require a more flexible implementation.

“With Onport, we were able to launch in less than three months, which we just couldn’t have done, had we built the system ourselves.”

Frank A. Ricciardi | Founder & CEO at Maavee

From growing SMBs to well-established enterprise-level companies, its composable and adaptive infrastructure was designed to be a reliable partner for the growth of any company operating in the e-commerce marketplace and dropshipping space.

Over 200+ companies in the e-commerce space are future-proofing their business with a solution trusted by brands such as Stadium Goods, Cupra, Ivalo, and Naduvi.