Choosing an E-commerce Infrastructure for Dropshipping
Finally, it’s time to tackle the good things: selling. If you’ve gotten this far, you’ve got a lot of administrative information along the way and you’re ready to set up your real store. I have said before that we are surrounded by different sales channels.
This is such a big topic that I have devoted a section to it. The sales channel is a platform you use to sell your products. This could be a Shopify store, your own dropshipping website, or a seller account on a product site like eBay.
The sales channel is another essential element for a dropshipping business. The platform you use to sell will determine your sales.
The flexibility (or lack of flexibility) of your channel and the audience you reach (and how you reach them) will be highly dependent on the sales platform you choose. As you can imagine, there are many options available here.
This is mostly a good thing, but you are confused about what to choose. Each sales channel has its own advantages and disadvantages. That’s why you need to make a good judgment before making a decision.
You can use multiple sales channels if you want, but you will have to balance all the different roles and responsibilities. In most cases this is not too difficult to do, but you may want to start with just one sales channel and then start using others.
You will find that one of them is the best option for you.
Dropshipping with Amazon
When you need to choose a dropshipping website, Amazon seems like the easiest choice. It is one of the largest online marketplaces in the world and a reach for dropshippers.
Most of the products you see listed on Amazon are actually sold by third-party sellers. But is Amazon really that good for dropshipper?
Although there is no doubt that Amazon is advantageous in many ways, it also has its own problems. In some ways it is convenient, in other ways it can be really harmful to dropshippers.
If you are thinking of using Amazon as your first dropshipping platform, here are some advantages and disadvantages to look out for.
Advantages of Dropshipping on Amazon
It presents its products to a very wide audience. By listing your products on Amazon, you can reach millions but millions of people instantly. It’s the kind of interest that you would have to spend years doing before you could do it yourself.
And since many Amazon customers buy from third-party sellers, you get almost a tremendous amount of free traffic guaranteed no matter what you’re selling. It is reliable.
These days, people see Amazon as a local mega-store. Shopping on Amazon has become a daily affair and often the place to buy and go as many products as they want.
This means that their customers can regularly browse Amazon to buy the products they need. You can get access to Amazon FBA. With FBA, retailers first send products to Amazon and then orders are sent.
FBA can give you an additional revenue stream if you have your own products to sell. It’s not a big income, but it’s nice to have.
Disadvantages of Dropshipping on Amazon
Quotation fees are substantial. Amazon, like eBay, charges quite hefty quotation fees, usually around 10 to 15 percent. This is well above the $ 39.99 base fee. If your profit margin is already low, paying this fee will greatly reduce your profit.
But it’s a fee that you will have to pay if you want to potentially reach millions of buyers. Competition is very high. Amazon’s popularity is a double-edged sword.
On the one hand, it means that many people will see (and hopefully buy) their products, on the other hand, there is a lot of competition. It doesn’t help most third-party Amazon sellers who automate their listings to constantly adjust their prices to the lowest.
This creates price wars that are bad news for dropshippers. Lowering prices is not always a way to stay in business; therefore this is a real problem for dropshippers. Payment terms are not ideal for everyone.
There are two big problems with how Amazon deals with payment. First of all, it does not accept PayPal. This is clearly a big problem. Because PayPal is the method millions of people prefer to pay for.
Second, vendors only get paid every two weeks, which is less than ideal for most entrepreneurs. In addition, Amazon’s dropshipping policies are very strict, so it should be well understood by dropshipping.
Dropshipping with eBay
Simply put, eBay is a huge sales platform. Many people trust eBay and millions of people use this platform to shop and buy products. It is similar to Amazon in many ways, and the two sites share many of the same benefits.
However, since eBay is an auction site, it differs slightly from the other two options. It can be very valuable to beginner Dropshipers, but – literally – it comes at a price.
Advantages of Dropshipping on eBay
It is huge. One of eBay’s most attractive features is its size. Dropshipping on eBay provides instant access to millions of customers whose wallets are in hand and ready to buy. This means less digital marketing and more investment in the platform itself.
It’s easy. Dropshipping is easy to set up on eBay. You can easily manage everything yourself without the need for assistants or team members. If that’s not enough, eBay makes payment processing and finance matters a lot easier.
It is reliable. Customers rely on eBay for its seller protection policies that benefit new dropshippers. Many buyers will buy from new sellers because they know they are protected when something goes wrong.
This makes it easier for you to attract customers and gain a positive reputation.
Disadvantages of Dropshipping on eBay
Fees are not plausible. eBay is famous for its high fees – the e-commerce giant gets 10 percent of sales (and in some cases even more). Although these fees are unwilling to sell on such a large platform, it is a situation and a trade-off incurred.
However, this situation discourages some entrepreneurs from choosing eBay as their dropshipping platform. Auctions are not always ideal for dropshipping. With a dropshipping business model, you list a product and keep that list indefinitely.
This is how eBay doesn’t work because it’s an auction platform. So there is a time limit for all lists. After their listings expire, you must re-list their products. This can be time consuming and cause you to postpone more important things.
It is restrictive. With eBay, your hands are tied. There are so many things you can’t do, for example, not being able to create a mailing list or design your own showcase. You have to play by eBay’s rules and you’re stuck on eBay with neither more nor less.
This means you won’t have many permanent customers, you won’t really be able to build an audience, and you won’t be a brand.
Dropshipping with Shopify
While it may not give you the ability to place your inventory in front of millions of customers, a dropshipping website of its own can give you advantages that you wouldn’t get any other way. You will get a lot of freedom, but you have to make some compromises.
Setting up a dropshipping website from scratch can be overwhelming, especially if you don’t have any prior experience, but it’s surprisingly easy thanks to e-commerce software like Shopify.
You can easily create a site for the store and integrate an e-commerce plugin, and this job requires no experience. Oberlo’s 3rd part of Earn Money From Home provides some information on this process.
But is this the right choice for you? Here are some points to think about.
Pros of Dropshipping on Shopify
You have total control. You can decide everything that makes up your store, from the placement of your logo to the format of your pages. Most importantly, you can convey your value to your readers, and this can give you a serious competitive edge.
You don’t have to pay excessive fees. Without a third party to be cut, you can significantly increase your profit margin. List fees of 10 to 15 percent charged by Amazon and eBay? Forget them.
Now you just have to worry about payment processor fees and the cost of real products. It is easy for customers to buy from mobile devices.
Have you ever tried using your mobile device to buy something from a sales platform like Amazon or eBay? It’s not always nice. With your own dropshipping website, you can easily make your site responsive and mobile friendly for your customers.
Better still, if you’re using a platform like Shopify, you can manage your entire business from your mobile device so you can keep an eye on events even on the go. You can stand out. Amazon pages are all the same, just like eBay pages.
Having a website of your own allows you to bring your brand to life and make a lasting impression on your audience. This can make a big difference and helps you build your brand and reach a loyal audience of returning customers.
Cons of Dropshipping on Shopify
You don’t have access to a large audience. Having your own site means building a target audience from scratch. You will need to spend more time, money and effort on digital marketing, traffic generation and promotion.
It may take a long time to get out of the ground. You won’t be able to sell right away like on Amazon or eBay. It will take some time to attract customers and make consistent sales.
How to Choose E-Commerce Infrastructure?
So ask yourself “Which dropshipping platform is right for me?” you may be asking. I can’t decide for you but I can help. To choose the best platform for your business, you need to ask some questions and evaluate your priorities.
First, consider which one is more important to you: higher profit margin or more visits. If you are interested in making the most money, you should probably consider building your own dropshipping website.
This strategy will take longer, but you will have more money in your pocket and you will be able to build a customer base. If you’re more interested in getting your product out in front of a lot of people, Amazon or eBay might be for you.
This will reduce your margins, but you will sell faster. Second, consider your long-term goals. How would you like to sell your product a year from now? What about five years from now?
In other words, how much control do you want to have in selling your products? While your own dropshipping website will give you much control, platforms like Amazon or eBay will limit you in many ways.
When it comes to controlling branding, sales, and pretty much everything, it’s hard to pass your own website. Finally, and the most important factor, consider how it will add value to your customers.
More specifically, consider which platform will allow you to provide the most value. I’ve talked about different ways to deliver value before, and you might have a few ideas.
Which sales platforms will best facilitate these ideas? Personally, I had the best experience with a custom dropshipping website paired with an ecommerce software like Shopify.
It gives you lots of control, makes it easier to sell and increases your profit margin. It also offers more opportunities for self-branding, customer retention, and digital marketing of your store.
You can easily switch to another dropshipping platform, but there is one thing to keep in mind. If you want to start on Amazon or eBay and move to your own dropshipping website, there is no way to move the customer base to your own site.
Your positive comments and customer experiences will be limited to this platform. Whichever platform you choose, you need to think about branding and digital marketing.
If you don’t have an unforgettable brand, even if you have the best products, you can still fall short. The good news is, with a little bit of technical knowledge, you can build a great brand where I can get your business out of the competition.