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Dropshipping: a little-known method of online sales

Dropshipping is a well-known name in the online retail industry. Yet few people really know the subject. However, this commercial practice remains pure e-commerce, surrounded by preconceived ideas and assumptions. The only notable difference is that the seller does not own the stocks of the products he offers for sale. Delivery to the final customer is delivered directly by the supplier, who owns these stocks. If the client does not always know, some feel that this practice flirts with illegality. And yet, when it is well supervised, it remains totally legal.

Dropshipping requires a solid knowledge of the basics of e-commerce

It is not uncommon to hear that dropshipping is a way to make a profit easily, without having a single knowledge in the sale. And yet, these assertions are not entirely true. While not having stocks can be used to severely limit spending, dropshipping still requires a significant foundation in e-commerce. Because before selling products, you have to have a website that allows it.

From nothing, achieving the result yourself without knowledge is impossible. For budding sellers who want to get started, they can train in dropshipping with Business Dynamite. This niche market has advantages for today’s traders, above all time and economy. No stock to store in a premises, nor shipment to be expected; it only takes a high-performance functional e-commerce site to sell its products, within a formalized legal framework.

With the COVID-19 pandemic, online sales have increased dramatically: 24% according to FEVAD in 2020. For e-commerce, there are three major dedicated platforms: Shopify, WooCommerce and Prestashop. They are used by all e-commerce sites in the world, whether they practice dropshipping or not.

The latter allow to build the foundations of his business, as on the model of a traditional shop. The customer browses a product catalog, chooses the one that suits him, pays online. The supplier then takes over and sends the order to the address indicated, without going back through the seller. A triangular relationship that works, provided you set a fixed frame beforehand. Because if the practice has advantages, it can also cause drifts.

Dropshipping, a framed and thoughtful practice

Dropshipping is a good alternative for traders who no longer have a premises. With the pandemic,non-essential businesses are among the first to be affected by the restrictions and are losing valuable revenue. So much so that many abandon their premises and turn to online sales, the only way to keep selling. Dropshipping allows you to focus on your strategy, including online traffic analysis, or see how customers fill their shopping cart… And no longer focus on the purely logistical aspect, which the supplier takes care of.

Dropshipping therefore reduces the company’s investments and operating costs, while collecting profits. These come in particular from the margins applied on each product sold. On the other hand, this practice is also freer for the choice of supplier. The latter can be found anywhere in the world… From the moment the seller announces actual delivery times to the customer. Because a commodity shipped from French soil will not have the same cost or the same shipping time as a commodity from China.

But this practice sometimes leaves room for abusive practices. Some players practice dropshipping so as not to be liable for taxes like VAT… Or to save customs fees. However, this practice is illegal, and does not reflect the majority of sellers who practice dropshipping. In order to remain within a legal framework, the seller must therefore know the full legal formalities for his activity. This allows it to protect itself against the failures of its website, but also against those of the supplier or in the face of a default on the part of the customer.

An dependence to be prepared between the seller and the supplier

The main advantage for a seller who wants to start a dropshipping business… This is the variety of products it can offer its customers. With dematerialization, it can sell everything, without restriction. Provided that he provides all the appropriate legal documents on his website, accessible by all clients. This includes the dropshipping contract, the Terms and Conditions (Buy and Sell) or a notice on the return policy, legal mentions…

But it is still highly dependent on its supplier, which is the master of sending products. Hence the importance, beforehand, of setting the operating conditions, the time to process orders, margins to be applied… A practice that seems simple, of course… but you still have to prepare carefully!

Sources:

E-commerce in 2020: Internet sales reach 112 billion euros thanks to the accelerated digitalisation of retail trade. FEVAD study published on 4 February 2021

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