At IXYCOM, we’re getting more and more requests for dropshipping online stores.
Is this just a passing fad, or is it the unstoppable solution that has enabled everyone to become the new Amazon, offering tens of thousands of products for sale?
A recent survey shows that many French people dream of becoming their own boss.
Let’s take an objective look at the strengths and weaknesses of the dropshipping ecommerce approach.
Advantages of a dropshipping online store
There’s no denying that dropshipping has its advantages.
- no goods in stock
- no major investment and great working capital requirements
- an extensive product offering
- new products on a regular basis
- beautiful photos for your products
- complete information (weight, description, manufacturer’s reference, etc.)
The biggest advantage is certainly the total absence of stock. So you’ll never have to sell off products from the previous collection (clothing), or worse, throw away perishable merchandise that’s past its sell-by date. The second advantage, which follows directly from the first, is that the initial investment is minimal. Let’s be clear, I’m talking about the stock you don’t have to buy to get started, not the design of the dropshipping online store. And why is working capital great? Simply because the end customer pays the store, and only then does the store pay its supplier. Your banker will be happy. Last but not least, you benefit from a huge, comprehensive and regularly renewed product catalog. Having worked with data from CDiscount, Pixmania and a few others, there’s no shortage of products, to say the least.
Disadvantages of dropshipping
- Data quality
- The same products as your neighbor
- Potentially ridiculous margins
- Often cumbersome processes
Data quality
As we saw earlier, you have a lot of products in a dropshipping online store, but the more products there are, the more chance there is for an error to creep in. On many occasions, I’ve found descriptions of televisions instead of printers. You have lots of photos, but lots of errors too, and the photo doesn’t always match the product. I even remember a dropshipping store where I regularly received duplicate or even triple products. This depends very much on the supplier, and there are a lot of suppliers out there, so don’t settle for a poor-quality catalog. The choice of supplier for a dropshipping online store is certainly what will make or break your success.
The same products as your neighbor
Last Sunday, it was barbecue time at the neighbors’, and what do you learn? Your neighbor is in the middle of a career change. He woke up yesterday and wants to sell top-of-the-range mattresses, just like you. You guessed it: he knows someone who knows someone, and pow, your supplier. Now you both have the same products, the same descriptions and the same photos. Google will be happy! If you’re not familiar with “duplicate content”, it’s high time you consulted us for an SEO service!
Potentially ridiculous margins
We’ve just seen that, if you choose the wrong supplier, your catalog will be of poor quality. We’ve also learned that your neighbor could suddenly become your worst enemy. But are you taking all these risks just to make a nice profit? Not so sure. Ask yourself why I’d buy my next iMac from your store rather than Apple. I don’t know your store or your brand. And even if I did, could it compete with the drawing power of a giant like Apple, Amazon or FNAC? Maybe your price is right, but you’ll never be as competitive as a company buying iMacs by the trainload (okay, I’m exaggerating, maybe). A dropshipping online store must therefore focus on service: impeccable pre-sales advice, fast, secure shipping at an attractive price, and easy returns just in case.
Often cumbersome processes
Once again, it all depends on your supplier. Some are very easy to work with, while others can be complicated. The ideal situation is for your supplier to provide you with a module for Prestashop or Magento, to name but two platforms. This module will act as your interface. Once set up, your dropshipping online store fills up magically and updates itself as your supplier’s stock fluctuates. If, in addition, the Prestashop module triggers a supplier order for every order placed on your ecommerce site, it’s America (#expression-oldschool). Unfortunately, this type of interface is rare, and most of the time you’ll have to work with a CSV file. If this file can be processed automatically, you may still be able to get by with some custom development, but I recently came across a supplier who required the merchant to manually upload the CSV file to their customer interface and then import it into their store. Needless to say, this process is not viable. Stocks or prices will have already changed before you’ve finished importing the CSV file into your store.
Conclusion
As you can see, in my opinion, a dropshipping store is a complicated project. Like any ecommerce site, it’s difficult to get off the ground, especially if you don’t include a search engine optimization (SEO) program. The choice of your supplier is crucial, so don’t hesitate to ask your partner for a trial period. Finally, even if the dropshipping solution isn’t ideal, it does have the advantage of existing.
