The search for profitable business and the boom in online sales have made Dropshipping a sales model that is currently gaining more and more followers.
The advantages of this method of selling products online make it a very profitable alternative that, as I will demonstrate in this article, does not require as much investment as an offline or physical business for those who decide to do it.
Today I will show you the benefits and drawbacks of Dropshipping, but first I'll define this term so that you can understand exactly what it's about.
In addition, at the end you will find a series of recommendations about what I see as the best Dropshipping modules that will let you get started using this sales technique in your PrestaShop store.
What is Dropshipping ?
Dropshipping is an intermediary model of online sales in which a merchant (the retailer) creates a platform or online store from which they sell the products of a third party (wholesaler or Dropshipper) and which are not kept in the retailer’s stock.
It is the wholesaler or Dropshipper that handles the shipment of products sold in the store directly to the end customer.
Now you're probably wondering:
What exactly is a Dropshipper and what role do they play in the sales process?
The Dropshipper is a wholesaler or main supplier of the products that will be sold to the end customer by the retailer.
The Dropshipper is responsible for sending all these products directly to the customer, with or without a trace identifying their real origin.
In other words, they act as an intermediary in the process.
What are the major benefits of Dropshipping?
Among the benefits offered by this business model, we can highlight the following:
1. Dropshiping does not require warehouse storage
One of the most popular advantages of this method is the lack of product storage.
The cost savings due to non-storage of merchandise is high. If you're the creator of the online store, you won’t need to rent storage space, nor will you need to pay people to handle the merchandise.
So the advantages related to the non-storage of merchandise are:
- Savings in warehouse rental space.
- You don’t need staff to handle merchandise.
- Aspects like traceability, things being out of stock, special storage conditions or loss carry high costs which are assumed by the Dropshipper or wholesaler.
2. A simple and easy sales process
When you have a Dropshipping-based store, your sales process is limited to receiving an order and passing it along to your supplier, who takes care of the rest of the process.
3. The Dropshipper handles shipment
By eliminating the process of shipping our eCommerce, we are also eliminating the following factors:
- Packaging of products, including both packaging materials and the preparation of packages.
- Negotiations with shipping companies: from the point of view of a retailer, the back-and-forth and negotiations with shipping companies can prevent us from getting competitive shipping prices and can make our pricing noncompetitive.
- Yet a Dropshipper, with higher shipment volume, can get better prices to apply to the shipment of the merchandise.
Yet a Dropshipper, with higher shipment volume, can get better prices to apply to the shipment of the merchandise.
4. Savings in labor costs
If we compare the labor costs needed for a store, whether physical or eCommerce, we see that the salaries corresponding to warehouse storage, packaging and management “disappear,” as already mentioned, since the processes are radically simplified.
What are the drawbacks of Dropshipping?
Despite the many benefits offered by this model, we can’t ignore several drawbacks that should be mentioned:
1. Poor supplier choice
This drawback could apply to any business, since a poor supplier could sabotage any eCommerce outfit.
But in a model like this one, in which the processes are so streamlined, it is especially significant.
2. Lack of communication
It’s extremely important for communication with the supplier to flow freely.
We have to make sure that both we retailers and the Dropshipper establish the necessary communication channels so that customers can promptly obtain the necessary information regarding their order and shipments as if in a conventional model.
3. Lower profit margin
In most cases, competition and the success of this business model reduce the profit margin of the products, leading to margins starting at 10%, depending on the industry.
4. More than one shipment per order
If our Dropshipping store includes more than one Dropshipper, a customer could make a single order with various items but receive multiple shipments, one from each supplier.
5. Online marketing investment
One of the most common errors is failing to give the needed importance to the proper development of digital strategies.
Taking advantage of the savings and benefits that we've mentioned MUST go hand-in-hand with a special effort in:
- Building an easy and intuitive online sales platform, with Dropshipping-specific features.
- Developing techniques to optimize internal factors relating to SEO positioning which ensure that our platform appears in Google results to attract potential customers.
- Offering useful information to visitors/customers through a blog, which consolidates the relationship of trust and loyalty.
How do I get Dropshipping suppliers?
The choice of a good Dropshipping supplier is essential for this type of business, since we delegate to them the main part of the sales process that our customers have begun.
Based on this, you might be wondering:
What makes a good Dropshipping supplier?
- Respect for retailer/end customer confidentiality: let’s not forget that all the effort of our business model is aimed at achieving sales, which we channel through the Dropshipper, so the danger of the wholesaler accessing the end customer would be the end of our business.
- Optimization of the process of capturing orders and shipping items.
- An information channel that allows tracking the status of orders: our customers must have this information at all times.
- An optimized product catalog with good information about the merchandise.
- Channels specialized in Dropshipping that facilitate retailers’ access to products and stock.
Where can you find your Dropshipping supplier?
There are various options for choosing your supplier, but currently you can find specialized portals providing lists of more-or-less known suppliers you can choose among.
If you make your choice carefully, your online business may be successful.
10 best PrestaShop modules for implementing Dropshipping into your business
In this section I will recommend some of the modules you can implement in your PrestaShop business for an online sales model with Dropshipping.
1. Dropshipping – Supplier and Shipper Emails Module
This module automatically sends your orders to corresponding suppliers and shippers.
With this PrestaShop module you can automate your business's most complex process, allowing you to save time and prevent errors.
There are many options allowing customization concerning order status, email content, etc.
2. CSV / TXT / XML Cron Import / Dropshipping Module
This module enables you to import or update products, categories, manufacturers, suppliers, customers and combinations with a cron job.
With the CSV / TXT / XML Cron Import module, you can update the entire stock of products, process, etc. every day or hour, or whenever necessary.
It’s even possible for you to schedule tasks so that you never forget!
3. DreamLove Import Module
- Automatically import DreamLove products.
- If there are new products, they are added with each import and are also updated automatically.
- If you’ve changed the descriptions, these will not change: the description is inserted only once.
- Stock updating and automatic availability.
It therefore allows you to remain linked to your logistics partner at all times and stay informed.
4. AliExpressApi Module
With this API module you have the possibility of easily searching AliExpress products and importing whichever ones you want in just one click and with all information.
AliExpressApi imports all images and data related to the product, as well as SEO data.
5. Dropshipping Wizard Module
Some of the benefits of using the Dropshipping Wizard module are:
- When your customers order one or more articles in your PrestaShop store, it doesn’t matter whether these items are from a single or multiple suppliers. Up to now, you had to manually resend the different orders to the right supplier.
But now, the module does it for you.
- As soon as an item's status reaches “Paid,” an email is automatically sent to the Dropshipping supplier with all relevant information and data (i.e., customer ID, packing slip in PDF format, etc.).
6. Dropshipping Advanced Module: Sending emails to supplier and shipper
One of the benefits of this module is its ability to speed up stock replenishment with suppliers.
This is done through automation of shipment orders based on sales in your store.
With the Sending emails to supplier and shipper module you will save a significant amount of time due to the complete information in each command which can be automatically transmitted to the different suppliers.
7. Catalog Exporter for Official Importer Module
Now it’s time to mention the module developed by PrestaShop Partner Innova Deluxe, whose reliability is well known.
While you can’t fully create your Dropshipping business with this module, it will allow you to export your whole product catalog so that your customers can import it to their platforms and indirectly sell your own products.
The only limitation of the Catalog Exporter for Official Importer module is that it does not export prices.
8. Personalized Customer Reference on Order Module
Developed by Profileo, another of our associate and partner agencies, it is also compatible with all PrestaShop versions, so that whichever type of CMS eCommerce you have, you can use it without any problem.
It facilitates B2B business within the scope of your store, which will be highly beneficial to you.
The Personalized customer reference module, while it won’t let you create your Dropshipping business from top to bottom, will allow you to perform functions like order tracking using a personalized code, which will allow you and your customers to know order status at all times.
9. Export Catalog in CSV Format Module
The Export catalog in CSV format module enables you to export your entire catalog in CSV format.
This is capable of extracting more than 250 fields, which facilitates the collection process for sending to a supplier who is awaiting your order.
It is a complementary tool for your business model like Dropshipping which will make your daily life much easier.
10. MSX Dropshipping Manager Module
This module is a bit unusual in that it is specialized for sex shop eCommerce business. It will allow you to easily import all products that are part of the order.
With MSX Dropshipping Manager you can even program these exports, making your work easier and less tedious.
I hope you now have a better understanding of exactly what the Dropshipping model is. It's simply a new way of seeing the eCommerce industry that will unleash even more benefits of the traditional online model than you thought possible.
So get started by thinking of different ways of integrating Dropshipping into your PrestaShop store – a new way of selling your products.
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