The trends for consumer products have proved that the products in dropshipping business are in high demand. With growing technology and trends in the market, people have steadily shifted to online shopping and online business. With businesses entering the online market, drop shippers in India have also gained popularity and momentum. This kind of setup is a relief to the sellers as there is no issue of maintaining inventory.
What is Dropshipping?
Dropshipping in India can be stated as a business where the seller does not maintain inventory or products. In this kind of set-up, the seller uses the services of a manufacturer (third party) who produces and delivers the product.
The seller does not have to manage the inventory. In the dropship process in India, he takes orders from the customers and informs the manufacturers, and then the manufacturer delivers the product to the customer. Most of the time, the seller does not even see the product. It is directly delivered to the customer by the manufacturer.
Unlike traditional online retail businesses, dropshipping companies in India have to select products, then perform marketing strategies to promote the product and provide after-sales services. The age-old practice of manufacturing products, inventory management, and shipping and delivering business has taken a setback.
Every Dropshipping business has one standard flow of the process that is normally followed by every drop shipper in India. The process can be briefly mentioned as follows:
- Select Products
The dropshipper can select products for the prospective business from independent suppliers. Integration with a dropshipping market is also possible these days.
- Online store
The products that are selected can be now imported to the online store with or without prices. The supplier does not have any stake in the prices and profit margin since this decsion is up to you.
- Order of Customers
The customers browse through your store, check out the products and pay and purchase.
- Notification to the supplier
The order received from your customer is then notified to the drop shipper supplier, and you also have to make payment to them on behalf of the shopper.
- Shipping and delivery through supplier
The drop shipper supplier now ships and delivers the product directly and informs the tracking number. Many suppliers also offer white label shipping. In that case, you can ask the supplier to get your branding done on the product.
Pros and Cons of Dropshipping
There are many questions in the minds of beginners for dropshipping business such as how to do dropshipping in India, is dropshipping legal in India, is it really beneficial, and many more. Every activity would have its pros and cons. The same can be summarized as follows:
Pros of Dropshipping business
- Setting up an online store is very convenient in this business. There is no stress or cost of inventory management for the products. The drop shipper only selects the product and the payment method, and the online store is inaugurated.
- The product line is extensive as it is not limited only to ones that you can manufacture or trade-in. You can add a variety of products from all over the world to the online store.
- There is no cost for inventory management and storage. The production, as well as storage, is handled by the manufacturer or the supplier.
- The drop shipper can focus on expanding business through marketing and other means as the operational budget is considerably reduced.
- The operation of the business is not limited to any specific place. With the internet facility in hand, the drop shipper in India can operate the business from anywhere and cover the entire horizon.
- When you source the products from the suppliers, it implies that you can easily change the inventory as per the taste and preference of the customers and the latest trends. Therefore the inventory of the products is highly flexible and can be quickly adjusted.
Cons of Dropshipping Business
- Product quality is one area where the drop shipper does not have any control. However, dealing with a trusted and single supplier or suppliers from reliable sources such as Sprocket or Modalyst can reduce the risk to some extent.
- Customer service or after-sales service can be tricky and hard. As there may be queries arising from the customers of which you may not be aware. This can be overcome through keeping an in-depth knowledge about the product and getting regular updates from the supplier.
- The exchange and returns may also be managed by the drop shipper and not by the supplier. Also, the refund process needs to be handled by the drop shipper at times.
- The shipping cost is a major issue many times as the supplier may be from a different place than yours. And the shipping cost will be calculated from the supplier’s warehouse to the customer’s place where the prices can vary based on different circumstances such as an increase in tax etc.
Also Read: Top 10 Business Ideas After Lockdown
How to start a Dropshipping business in India
The eCommerce business is booming day-by-day, and with the same, there has been a tremendous rise in the evolution of Indian drop shipping companies. To answer how to start a dropshipping business in India is actually very simple and easy. It requires minimal cost and investment, no space constraint; only internet and a few dedicated hours are required.
The step by step guide on how to do dropshipping in India is mentioned below:
1. Online Store
To initiate the dropshipping business, the person can start from any of the eCommerce websites. There are innumerable online store templates available on the internet. Also, register the domain name to publicise your store.
2. Selection of Products
There are different views on selecting the products first or the suppliers first. Some theories suggest that it is beneficial to select a supplier first and then sell the products he offers, while the others suggest selecting a trending product and then deciding on the supplier.
Whichever way it is, initiate with the niche products that target a specific audience. Tools such as marketplace and Google trends assist in conducting research on shopper’s interests. Trending products would always be sold more, bringing in high profit. However, this is an absolute benefit of dropshipping in India that as soon as the trend changes, the person can change the product or the supplier. There is no stress of overstocking the inventory.
Selecting that one supplier from hundreds of available ones is a real hardship. It is essential to have a trustworthy supplier and provide the utmost value that you are looking for. Also, the products should be genuine and of high quality.There are no set rules, but while selecting a supplier, you can look at some of the pointers such as:
- It is recommended to choose a supplier who himself is a manufacturer as it would be difficult to track the long chain of purchase. It will be more authentic and also such suppliers would have a large inventory in-store.
- Before finalising the product and the supplier, it is essential to study the profit margins and the pricing of the product. Higher the margin higher would be the profitability. However, it is essential to understand the supplier’s perspective as well. So it is better to discuss the same before finalizing the supplier.
- Delivery time is one more crucial issue that needs to be discussed with the supplier. In the Dropshipping business, you are entirely dependent on the supplier for the shipping and delivery of goods. The customers would always prefer prompt delivery and earlier than what other eCommerce platforms offer. So ensure that your prospective supplier adheres to this.
- Enquire if the supplier provides white-label products that can be arranged for your customers. This would add to the trust and authenticity of the customers when your brand is affixed to the products.
- There may be certain charges or deposit money may also be charged by the suppliers, such as set up fees, monthly subscription fees, or even minimum purchase quantity.
4. Get GSTIN
Before finalising, the supplier essentially discusses the GST (Goods and Service Tax) requirements. If the supplier requires it mandatorily then get the GSTIN (Goods and Service Tax Identification Number). This would also be beneficial for availing of the GST credit that may be charged by the supplier.
Design a website for the online store, so that people know where to get in touch with you. A beautifully designed website would get you maximum responses. The website should give an impression to the customers that you sell quality and trending products, while also establishing trust and authenticity. The only thing in the dropshipping business in India is the revelation of the strong technical side of the drop shippers in India. Also, add all types of payment modes that you accept.
6. Products to Online Store
Add the Products to your online store with as much creativity as possible to reveal the minutest details about the product. You can also add images and videos to support the product. Share the shipping rules and price. A price that is affordable to the customers and also covers a good amount of profit margin should be placed.
The products should be so placed that it is easier for the customers to find out the product they are looking for. The products can be categorized keeping in mind the genre they belong to.
7. Promotion of Business
Once the online store is all set with the products you are offering for sale, now it is time to market the products and the online store. Word should be spread about your online store amongst all the target shoppers. The promotion can be done keeping in mind the following elements:
Branding of your store can be done by following a particular colour tone or a logo that resembles your store. The language used on the website should be easy, fluent, and one that touches the heart of the customer.
- Search Engine Optimisation
SEO is very important to make your website accessible on the Google platform. Therefore, you should use relevant keywords and key phrases on the web pages and the blog content of the website.
- Email marketing
Email automation is one such tool that keeps on reminding the customers about you day in and day out. However, keep it only to the extent that it does not irritate the shoppers.
- Social media
Marketing campaigns such as customer testimonials, promo videos, product photos, tips can be made viral on social media platforms to keep your presence fresh in the mind of customers.
- Paid advertisements
Targeted paid advertising campaigns on search engines, Instagram, Facebook, and other platforms let you reach new customers.
8. Accepting Orders
With the online store all set, you receive orders from the customers, accept the same with required details from the customers. The customers make the payment through any of the channels of payment.
9. Notification to Supplier
Notify the supplier of the product for the order. You may also have to make the payment to the supplier on behalf of the customer to confirm the order. The supplier would then prepare to deliver the goods to the customer and will send the tracking status to you. In this way, you can keep a follow-up of the order.
10. Completing the order
With this the order completes and you can also add a thank you gift or message for the customer as a gesture. However, if there is an issue with the order either with refund or exchange, prompt after-service should be provided for resolving that issue. This will lead to long-term customer retention.
It is not necessary that the first product launched on the online store appeals to the customers. But then there is no reason to get disheartened about it. There can be several reasons for the failure such as inferior customer service, boring media and website messages, lack of variety, wrong target audience, substandard selection of products, ineffective marketing strategy, or something else.
Research and understand how to start a dropshipping business in India. Take your time to plan and build strategies before executing the business to garner successful results. But once you kickstart there is no looking back. With gradual variations, improved strategies, and choices, the dropshipping business gets profitable day-by-day.