Drop shipping: the gateway to online shopping

By Sophie Foggin April 12, 2018
Drop shipping online business

Image courtesy of Shutterstock.

These days, huge retailers have shown us how easy it is to turn over millions of dollars by simplifying the process of online purchasing down to just a few clicks. Despite this, it’s still a well-known fact that to be able to succeed in an increasingly competitive market, businesses must adapt their services to suit their clients’ individual needs.

Regardless of whether you have experience in the world of e-commerce or not, it’s no secret that in this tech-savvy age, it’s a whole lot easier to start selling products over the internet. Thanks to drop shipping, many more people are deciding to set up online shops, allowing them to enter the world of virtual shopping and own their own business.

With the help of fairly well-known platforms, everyone is now capable of setting up an online shop. Globalisation is keeping the whole world connected, but it’s not just these companies or individuals who sell their own products that are benefitting from this. Recently, drop shipping has become increasingly popular. For those who don’t know what it is, it’s based on an online sales model that doesn’t require shops to have a stock of products.

As opposed to investing in a huge stocktake, storing it, packing it and sending it to the client when they place an order, drop shipping eliminates this whole process. This way, when an online shop using a drop shipping model offers a catalogue of products, what it is really offering is a list of products from a supplier. It works like this: when a shop sells a certain product, the supplier buys the product and in the majority of cases it’s the same supplier that sends it directly to the client. This way, the online shop never has any actual contact with the product, meaning that in reality, drop shipping businesses end up being an intermediary between the client and their supplier.

In terms of the profitability of working with this business model, you have to bear in mind that this can vary according to the number of clients that businesses manage to bring in, as can the profit margin that each shop makes, which varies according to the suppliers’ prices. This is because, in some cases, the suppliers can charge differently according to the number of regular orders a shop makes. In other words, the greater the sales, the larger the profit margin and the larger the rate of return for the shop.

In Mexico, drop shipping businesses have the total support of specialised and well- recognised companies like Shopify, that also make it easy to create your own online business in a simple way. Shopify also has all of the tools you need to be able to drop ship and offers complete guides which cover all the things you need to know in order to be able to run your own drop shipping business.

Entrepreneurs have not been the only ones to benefit from this model of online shopping. Of course, all of this also has a fairly positive impact on a country’s economy. In Mexico’s case, retail sales via email surpassed $4.4 thousand million in 2014, and $13.3 thousand million is predicted in sales for the year 2019.

There is no doubt that this business method offers huge advantages when it comes to setting up your own business and working for yourself, allowing you to create a personalised business without large investments or financial risks. However, it’s clear that in order to succeed in this area, your sales spirit must be able to work well with the idea of setting up your own business.