Before we dive into how to start dropshipping business in India, let’s understand the whole concept of dropshipping first. Rapid innovation in the Information Technology field has led to a major transformation in the way the market operates.
In recent years online shopping has become an unstoppable trend. The online market is growing. There are many ways anyone can start an online business in India and start a viable income source. One of these online business ideas in India is – Dropshipping Business.
How would you feel if I tell you that you can start an online retail business from scratch by creating an online store without holding product inventory and shipment cost? Sounds Great? It is possible to start such an online e-commerce portal through a business model known as “Drop Shipping”. If you want to familiarize yourself with this drop shipping concept, continue reading this article.
We, will, get to know
- 1 What is Dropshipping?
- 2 Dropshipping Model Vs Classic Or Inventory Model
- 3 How Does Dropshipping Work?
- 4 How to Start A Dropshipping Business From Home in India?
- 5 Benefits of Dropshipping in India
- 6 Disadvantages of Dropshipping in India
- 7 Summary
- 8 FAQs
What is Dropshipping?
Dropshipping is not a new word in online business. Marketers are already acquainted with the dropshipping model. It is a unique way to run an eCommerce portal without having to deal with inventory and shipping costs.
‘Dropshipping is a business model that allows you to run an online store where customers order a product and that is shipped directly to customers on behalf of you. In the dropshipping business process, you sell products directly to customers without keeping in stock of these products.’
You don’t need to hold any responsibility for inventory and shipping products to customers. It is a great business model that offers to make online business easier than traditional inventory style.
I will try to make it simple for you to understand. Suppose you run an online store, where you are selling imported products through Alibaba. Now, every time a customer places an order through your portal, you will simply forward this order to Alibaba. And then they ship products directly to the customers. You will get no hassle for shipment and packaging. Most importantly, you can set the price of products according to your profit margin.
You can also promote someone else’s products through your online eCommerce website. Suppose your friend is running a business of t-shirts in a physical location. Now, You can promote his business through your online store.
You can add t-shirt images and product details on your eCommerce portal and you can run paid advertising for marketing. Now, if someone places an order for t-shirts on your website then you can simply forward details to your friend. He will hold packaging and ship products to the customer.
For example- If per t-shirt cost is INR 250 and you are selling those t-shirts for around INR 500 on your eCommerce website. Now someone placed an order for that t-shirt. Then you will simply forward the customer’s details to your friend and pay INR 250 per t-shirt plus the shipping charges to your friend.
Your friend now contacts the dropshipping partners to fulfill orders for the customer. It is known as an offline dropshipping method. After shipment, the whole profit will be yours.
Dropshipping Model Vs Classic Or Inventory Model
The big difference between the Dropshipping business model and the Classic or Inventory model is that the seller doesn’t keep products in stocks and he does not ship products to the customers. But in the Classic Inventory Model, the seller purchases products from the merchants and stores products. Later when any customer places an order, the seller has to take responsibility to package and ship orders to the customer.
Let’s try to understand how Dropshipping differs from the Traditional Inventory model.
If you have a traditional store, you will follow these steps:-
- Firstly, you will purchase the goods from the merchants, which you want to sell.
- You will also store these products in various variants.
- Then, to start selling online, you will make an eCommerce portal and do marketing for it.
- Now, when customers place an order, you will track the analysis and will contact the shipping company to ship orders to the customer’s address.
In this case of the inventory model, you would need to invest more in storage and shipping on products. Which reduces the profit margin for your business.
If you don’t want to open a traditional store and you want to sell products, it can be possible through the Dropshipping business. You will see more affordable options to run an online eCommerce website without holding inventory and shipping costs. Lets a dive deeper and learn how to start dropshipping business in India:
- First thing is to decide what goods do you want to sell?
- You design your online store on Shopify or other dropshipping platforms according to your needs.
- Add the products on your eCommerce website or you can import products from Aliexpress or Amazon, and other networks. (You can research online about these platforms.)
- Add the product price on the eCommerce portal according to your profit margin.
- When someone places an order, you simply forward those details to the suppliers.
- Now, those ordered goods are sent to buyers by the supplier.
In dropshipping, you don’t store products on any physical location. You just promote products to the audiences with the help of social media platforms and other digital marketing techniques.
How Does Dropshipping Work?
We discussed at the top of the section that Dropshipping is a mutual collaboration process between sellers and the dropping service providers. To learn how to start dropshipping business in India, you should familiarize your self with the process of the dropshipping model.
In dropshipping business model sellers just manage their concerned online store. When someone places an order, the online retailer forwards the details to drop-shipping partners to ship the product to customers. In short, it provides a way for retailers to conduct hassle-free retail business online. If dropshipping still sounds complicated, I’ve broken down in a few easy steps:-
Step 1. A Customer Makes An Order On Your Online Store/ Website:-
In this step, customers reach you on your online store and find products they like. Then they place the order online through your eCommerce portal.
Step 2. Retailers Contact Dropship Suppliers:-
When sellers receive an order on their eCommerce portal, they forward the request to dropshipping partners to ship the products to their online buyers. You may have to pay a fee to your dropshipping partners to fulfill the order manually.
Step 3. The Dropshipping Partners takes the Orders and Send to customers:-
When you forward the shipping details to drop shipper partners, they receive the orders and complete the further processing of delivering the goods to the customers.
In case, customers need any help, they will contact you. As a seller, you are responsible for assisting your customers to solve their issues. It helps you to build trust among your customers.
How to Start A Dropshipping Business From Home in India?
Dropshipping is just another name for an online retailing business. The difference between online retail business and traditional retail business is that in the online retail business you don’t need to have a physical store.
You can start an online retail business from anywhere, even from your home. All you will need is a good laptop, basic knowledge of computers, and a good internet connection. Everything else, you can learn online. Let’s see how to start dropshipping business in India from home:
1. Find a platform where you want to sell your products with a website or without a website
There are two ways you can start selling your products through eCommerce portal like Amazon, Flipkart. Or if you want to start an eCommerce portal then you can make a website. Or you can also start your business by setting up a virtual store with a Dropshipping partner portal such as Shopify.
2. Select the products you want to sell
Now that you have decided on which platform you will sell your products, it’s time to select the type of products you will sell through your store. To pick up the products, first, find a niche or micro-niche for your dropshipping business.
You should consider a profit margin and as well as your interest in the niche and in products. This will help you with your marketing process.
If you are not passionate about selling products, It can not bring major profits to you. Hence take time, research and research more about the type of products you want to sell.
If you choose the right products to sell by doing research and taking time, it will direct your marketing in the right direction which will help you maximize the profitability of your online retail business.
3. Find a supplier who will Dropship for you
After Identifying the products you want to sell at your online store, you need to find a supplier that will do dropshipping for you.
Running an eCommerce online business with the wrong suppliers can bring a downfall for your business. You should look for two things to find the best supplier- Dropshipper partner’s reliability and delivery time.
If your dropshipping partner provides short delivery time to the customers, it gives customer satisfaction. Before registering on dropshipping online platforms, you should consider the performance of dropshipping platforms and it’s reliability.
Alibaba is one of the largest online dropshipping platforms in the world, for you to consider it as a dropshipping partner.
4. Promote Your Business with the help of digital marketing
Suppose you are running a website where you have great products but it is a waste if no one is buying those products from you. That’s why you have to find an innovative and less cost-effective way to promote your business.
Here digital marketing will work for you to attract relevant online audiences towards your business. You’ve already heard about digital marketing.
So don’t overlook Digital Marketing’s importance for growing your online business. You can run advertisements using paid online promotions such as Facebook Ads and Google Ads. There are multiple ways you can promote your online retail stores and sell on social media platforms like Instagram shoppable tags, Facebook pages, Whatsapp business, and Pinterest.
5. Once someone placed an order through your store forward the customer’s details to your supplier
Once you receive an order that a customer placed through your online store and makes payment. After confirming the sale forward the order details and address of your customers to your supplier immediately. The dropshipping partners will ship the order to customers directly.
You have an advantage as a seller. You can put the price of products more than it is picked up from vendors like Alibaba. So you can make a profit margin for you. Dropshipping business is the time-saving and faster way of business because here you don’t have to keep products in stock.
6. After forwarding customer’s details to suppliers you must follow up with the order
After the sale and forward the details to the drop shipper partner, you must follow up on the orders. Because you sold the products to your customers and they are receiving it on your behalf.
Your customers would want to know where their orders are and when they will receive them. They will contact you because they paid you. It is your responsibility to assist them and resolve their problems regarding their orders.
Until the customers get their products within the estimated delivery date and are satisfied with the products, you must follow up on the sale. If customers are happy and satisfied with your service, they will for sure come back again to your online store.
Benefits of Dropshipping in India
Dropshipping has become a great business model for entrepreneurs who want to start their business with less investment. Dropshipping is one of the largest business models in India.
Lots of marketers are doing business with dropshipping and they are earning lots of passive income with the drop-shipping model. There are many benefits of Dropshipping some of them are listed below:
- Less Investment is Required
- Easy to start and manage
- Don’t need to stock products so low overhead
- Flexibility of location
- Scale-up business with less monetary
- Low monetary required in Marketing
- Import a wide range of products
1. Less Investment is Required
The best thing about the dropshipping model is that you can launch your virtual store without investing a lot of capital and effort. You free up taking stress to open an inventory where you could store your products.
With the dropshipping model, you don’t have to buy products from the merchant. You provide sourcing for these products on your website.
In the Drop Shipping model, you need very little investment. There is a lower risk in dropshipping than the traditional retail business model. It is much accessible for sellers to track the products until customers get it.
2. Easy to start than a traditional business
Most entrepreneurs want to start their online retail store but they don’t want to handle the storage, packaging, and shipping of the goods. That is why dropshipping is one of the best options to run an online retail business. In Dropshipping, you don’t need a warehouse and pay rent.
It is pretty easy to start online, just set up an online store with Shopify and start selling the products. To run a dropshipping business, you will only need to have a laptop and invest some money in Google Ads and Facebook ads.
Online dropshipping business is much easier than Traditional business because:-
- You don’t have to look to buy or pay rent for a warehouse to store the products.
- You don’t have to take responsibility for packaging and shipping but you have to keep track and follow up till the last stage of the delivery process with the collaboration of drop shipper partners.
Overall, Starting a dropshipping eCommerce business is much easier than starting the traditional retail business.
3. Doesn’t need to stock of products so low overhead
With the dropshipping business model, your overhead expenses are low. Because in the dropshipping model, you don’t need to keep products in stocks and various variants. You only have to add product images to your eCommerce portal to show it to the audiences. If they order then you forward the details to the suppliers.
4. Flexible Location
In a traditional retail business, you can not be connected through your business from anywhere. You have to be available there yourself. But you can access your dropshipping business online from anywhere with the help of an Internet connection.
You can communicate with drop shipper partners and customers directly. With an online dropshipping business model, you can also track and manage your business anytime from anywhere.
5. Scale-up business with less monetary
To scale up such a dropshipping business you will need less money than a traditional business. Because in the dropshipping business you don’t need to maintain stock at any physical location. If your customers order items that you don’t have in your warehouse, you will need to either cancel the order or purchase that item in bulk from your merchant.
But this won’t be a problem with the dropshipping business. You can import these items through your dropshipping portal like Alibaba. It solves the problem of organization and storing of your stock.
Today is the world of online audiences, so you can target online audiences to convert them into paying customers.
6. Low monetary required in Online Marketing
For marketing your virtual store, you can run the paid advertisement to drive traffic to your portal. You can show your audience an exclusive offer on your products.
Digital or online marketing requires less money in comparison to traditional marketing methods. So with less money, you can actually gain a significant amount of profit from your online dropshipping business.
7. Add Wide Range of Products
You can easily add a wide range of items to your eCommerce website or you can import from Amazon or Alibaba. These dropship suppliers provide more products to you that you can show on your portal.
When someone places an order on your website it is delivered to customers by suppliers. You don’t require to purchase the goods that you aren’t ready to sell. It is one of the best features in the dropshipping business.
Disadvantages of Dropshipping in India
Along with the advantages, there are certain disadvantages associated with the Dropshipping business in India. You should know about these certain risks before starting a dropshipping business in India.
- There is a lack of trust among online buyers in India because of a lot of online scams. Some retailers in order to gain quick benefits charge higher for an item, which isn’t worth that much. This instilled a lack of trust among online shoppers.
- It is very hard to find reliable Dropship partners in India. Most of them are not actually the suppliers, they are the middleman between retailers and wholesalers. They don’t have any products of their own to sell. This cuts the profit for retailers in the dropshipping business.
- Back-ordering is the most common issue faced by online retailers. When a customer places an order and the retailer asks the dropship partner to fulfill it, then sometimes the wholesaler doesn’t have it in stock. Which causes a long wait for customers and dissatisfaction among customers.
Dropshipping is an online retail business model that does not require sellers to keep products in stock. It fulfills the orders of the customers on behalf of your store. It works like chain management between customers and retailers where customers place orders and retailers send the goods through dropshipping partners.
Dropshipping Model Versus Classic Model
- In the dropshipping model, you don’t need to buy products, you have to buy the products through the merchants in the classic model.
- You don’t need to keep goods in your stock in the dropshipping model, but you have to manage the goods in your store in the Classic model.
How Does Dropshipping Work
- A customer Makes An Order Online.
- Retailers Contact Dropship Suppliers.
- The Dropshipping Partners takes the Orders and Send to customers.
How to Start A Dropshipping Business From Home in India
- You will need to find a platform where You Want to Sell Your Products With Website or Without Website.
- Now choose the niche products you want to sell.
- Then you will need to find a supplier who will do Dropship for you.
- To increase brand awareness, you will have to promote Your Business by SEO, Paid Marketing Tools.
- As soon as customers order items through your store, you will have to send the customers details to your drop shipper partners.
- Follow up the orders and provide customer service.
Benefits of Dropshipping in India
- Less Investment is Required
- Easy to start
- Don’t need to stock products so low Overhead
- Flexible Location
- Scale-up business with less monetary
- Low monetary required in Online Marketing
- Import a wide range of products
Disadvantages of Dropshipping in India
- Lack of trust among online buyers
- Hard to find reliable dropship partners
- Back ordering issues.
How much does it cost to start dropshipping?
To start your eCommerce portal, you need a platform where you can host your eCommerce store. Its cost may differ according to the platform. If you choose Shopify to build your online eCommerce store then starting minimum price to start dropshipping will be around $29/ Month.
Do I need money to start dropshipping?
Yes, you will need a small amount of money for a startup costs program. But unlike a traditional retail business, you don't need to invest thousands of dollars to start your business.
How profitable is Dropshipping?
Suppose you import a product from alibaba that price is $20 and you sell it for $60 after cutting the shipping cost and paid advertisement cost. Lastly, you get actual profit over the sold items is $15. So you earn $15 as per items. It can drive more profits as the business grows.
Can I Dropship on Amazon?
Yes. You can use amazon as your dropship partner. For this, you will have to join Amazon Program throughout reading their sign up conditions.