What is Shopify Dropshipping? Shopify Dropshipping Concept & Advantages and Disadvantages

Dropshipping is an operating model that allows Shopify stores to store inventory without having to ship their own shipments!

Shopify Dropshipping

If you want to open a shop in Shopify, you will definitely be exposed to Dropshipping. What exactly is this? This article will give a detailed introduction around “Dropshipping”.What is Dropshipping?

1.What is Dropshipping?

Dropshipping, a foreign trade term, is a method in supply chain management. Retailers do not need merchandise inventory, but give customer orders and shipping details to the supplier, who delivers the goods directly to the end customer. Retailers earn the difference between wholesale and retail prices. Putting it on the Shopify store operation to explain, Dropshipping is an operating model that is used when the seller opens a store on Shopify. Through this mode of operation: Shopify stores do not need to stock inventory, nor do they have to use it. Packing and delivery is equivalent to being a middleman, connecting suppliers and buyers. After receiving the buyer’s order, the supplier will be shipped to the consumer according to the order information. The advantage of adopting the Dropshipping model is that the seller does not have to deal with inventory, logistics, etc., so that you can focus on marketing and research on how to increase sales.

2.Dropshipping process

The first stage: the seller will put the product information provided by a supplier supporting a service to their own Shopify shop.

The second stage: the buyer goes to the seller Shopify shop to place an order, and the Shopify seller sends the buyer’s order information, as well as the ordering cost and shipping cost, to the supplier who supports a service.

The final third stage: Shopify sellers earn the difference after “buyers’ payment – supplier’s payment – shipping”.

3.Advantages of Shopify Dropshipping

The door is low, there is no need to have a product supply chain, you can sell anyone’s products, no need to stock, no delivery, fast delivery, fast.

(1) There is no need to spend too much money. The seller does not need to invest tens of thousands of dollars in inventory to operate a Shopify store, avoiding the risk of traditional cross-border e-commerce consuming large amounts of funds to purchase inventory and generating inventory backlog.

(2) Low management costs. In general, sellers only need to run Shopify stores at home or in the office. Basically, the monthly management cost is less than $100.

(3) A wide range of products, no need to buy the products in advance, you can provide a series of products for your potential customers, customers can order the goods to ship.

(4) The average customer price is relatively high (the profit ratio is higher in China), the consumption level in Europe and the United States is higher, the buyer is less sensitive to price, and the purchasing habits are exactly the opposite in China.

4.Disadvantages of Shopify Dropshipping

(1) Intense competition

Because DropShipping is extremely easy to use, every seller who opens a store on Shopify uses this mode. So if they use the same supplier, the same product, then the profit will not be too good, although the pricing is up to you, but when customers search for product names online, they will come out with a result, the same product must be Whoever has a lower price has the upper hand.

(2) Transportation complexity

Goods may need to be transferred several times to reach the customer, and the cost of shipping will also increase.

(3) The dependence on Facebook ads is too high, there is no customer accumulation, repurchase rate, brand precipitation.

5.Shopify Dropshipping summary

Although the Shopify store uses the Dropshipping operating model to help sellers, it is not an automatic money-making tool that requires us to work with other tools to achieve better results.