The eCommerce industry has grown exponentially ever since the dawn of the COVID-19 pandemic. In 2021, global eCommerce sales amounted to over $5.2 trillion, and current trends predict that this figure will balloon to $8.1 trillion by 2026. Luckily, the shift from brick-and-mortar shops to online stores means an influx of opportunities for both veteran and aspiring entrepreneurs.
If you’re planning to start an eCommerce venture, you should know that shipping services will be one of your vital needs. Whether running a retail store or a food and beverage brand, operating your business online will be difficult without a reliable logistics partner.
The good news is that the local logistics industry has seen rapid development recently, with players like Grab asserting their relevance for businesses and consumers in the Philippines. Today, businesses in the country now have a wider range of options for addressing their logistical needs. One option that’s gaining massive traction in the Philippines and other countries would be drop shipping.
Drop shipping is a way of fulfilling orders without the business owner managing their inventory. Instead, drop shipping companies buy products from third parties and send them to customers. On the other hand, as the entrepreneur, you oversee the order processing and generate profit by marking up the items you’re selling.
After processing orders, the third-party suppliers do everything on your behalf. That means you don’t have to stock or bulk-buy products, significantly reducing operational costs. All you need to do is buy wholesale from existing vendors with the inventory and space before they ship them off.
Before attracting customers to your online store, you need to find a drop shipper first. Ask how much the wholesale price is for products, how the shipping process works, if they have a handling fee, and how they’ll charge you for using their services.
Shop between drop shippers and compare their fees to see which ones fit your business and your costs. Also, check if the shippers provide live tracking for customers, returns, and refunds. These are quality-of-life necessities that can have customers coming back to your store.
Once you’ve decided on your partner, you either register for their services using an app or sign an agreement with them.
Now that you have a drop shipping partner, customers can visit your store. You can serve different industries depending on your expertise level or the potential profits you can get.
Once a customer finds a product they like, they make an order. They pay the set price determined by you, which is the wholesale price plus the markup. Depending on your agreement with the drop shipper, the price may include a handling fee.
If all goes well, the customer safely receives their order. Depending on your shop’s platform, they may leave a review and a rating, encouraging future users to purchase the same product.
Drop shipping works through various channels like your website or social media. Since you’re in charge of consolidating and sending orders to the drop shipper, you can use different platforms for marketing your store and the products you’re offering.
Drop shipping is profitable depending on several factors. You need to look at your competitors within the space, the fees the drop shipper asks for, and the products in demand. Many products sold by other businesses using drop shippers have low prices, so you must ensure you keep up with them while still pulling a profit.
Yes, there are drop shipping sites that offer free trials to let you test the service. Some sites may charge a small fee whenever you sell an item, but you won’t need any upfront investment.
Yes, drop shipping is a good business for beginners because it requires minimal costs, allows you to work anywhere, and doesn’t require you to manage any inventory. Start as small as you want, with only a few items for sale, then scale up as you gain more experience.
Yes, it’s completely legal to use. Just ensure that you’re following any laws regarding online selling. Because you have an agreement with a drop shipping business, you’re selling products with their permission.
Yes, some drop shipping companies ship their products around the world. You’ll need to ask the drop shipper you want to partner with about their international shipping process, timelines, and fees per country.
Drop shipping opens many opportunities for entrepreneurs starting in the eCommerce industry. These companies shoulder many responsibilities that would typically take a lot of time and money for you to set up. Start building a successful business and launch products with extensive research and careful planning.
If you’re looking to get started with online selling, then consider Rush’s all-in-one eCommerce solutions. We help organize your website, provide you with an ROI calculator for your business, and handle logistics as you get started with drop shipping.
Book a demo with one of our Sales Champs to get started!