What is Dropshipping
definition

For some time now, we have seen sites /lists on the net dedicated to what would be the eldorado of E-commerce: dropshipping (or drop-shipping). Késako ? dropshipping is a sales method where you are not the shipper of the product, you simply sell and completely subcontract the supply chain (from purchasing to shipping and storage).

In order to correctly explain the principle here are the 3 actors of the chain: the Internet user, the wholesaler (the one who has the products) and the seller, or reseller, (the one who generates sales)

Dropshipping is generally offered by Chinese wholesalers (but not only) who buy/manufacture a range of products and publish an online catalogue available to all retailers. The main advantage for the seller is that he does not manage a stock of products, which considerably reduces the company's operating costs. This advantage allows to have a negative working capital all the time (it is good) and requires little investment, whereas in traditional e-commerce the working capital tends to be positive and the capital needs very high to buy the stock.

That sounds great, I'm going to start Dropshipping right now !

Yes dropshipping really has many advantages if you know how to sell on the Internet, or if you want to test a new range of products without investing too much at the beginning. If, for example, your e-commerce site is running well but your financial strength does not allow you to find new products quickly, before Christmas for example, dropshipping can be a good solution to generate extra turnover. If your agreement with your wholesaler provides for payment in 30 or 60 days (or more) you will even have cash on hand throughout this period if your Internet users pay you in cash!

You can also set up an e-commerce site based 100% on dropshipping by selecting products from several suppliers, for example around a theme, without spending a lot of money, which makes it very easy to launch into e-commerce, as a self-employed entrepreneur for example. It is moreover since the entry into force of the auto-enterprise, since 2 years, that dropshipping has really taken off in France.

But be careful, Dropshipping is not just about benefits

Indeed, in dropshipping, the wholesaler is not responsible for the order, it is the seller who is legally bound to honour it, the sales contract being concluded between the Internet user and the seller, the wholesaler does not appear to him anywhere in this agreement. If you don't want to be responsible for the orders, you have to make the connection in the purest style of the marketplaces currently in vogue (Pixplace, Rueducommerce, Amazon etc...). This responsibility in the sale is important because since it is the seller who "sells" the product and the wholesaler only manages the catalogue and the logistics, the seller is very dependent on the quality of his wholesaler! If you do not trust your wholesaler as a seller and he does not fulfill your orders, you will have problems with YOUR customers.

In other words, the lists of Chinese wholesalers doing dropshipping sold on the net are pure scams and you will have more problems to go through them than advantages. The relationship of trust and the balance of power between the two actors must be proportionate. There is no point in having a dropshipping contract with a wholesaler handling millions of packages a day if you only give him a few a week, you will quickly be abandoned or abandoned in favour of big sellers.

Some tips for dropshipping with peace of mind

As you are probably an E-merchant, or future e-merchant, I can only advise you to do some dropshipping sooner or later but with some precautions in order not to have bad feedback from your customers:

• Select products that match your niche.
• Meet your dropshipper and negotiate a contract, if this is not possible because of pre-determined contracts, automatic CGV to accept, no contact by phone/ skype etc.... go your way!
• Test the dropshipper with a few products at first and then increase the width of the assortment once the system is running in.
• Do not do 100% dropshipping EXCEPT if you have full confidence in your supplier(s).
• Remember that the products return to YOU if the customer retracts and count 10% return rate at departure.
• Make sure of the quality of the products before you sell them to your customers!

If you are already an established e-merchant with a well-functioning supply chain you can also consider putting your products into dropshipping, the only condition being to know how to export your product flow (with stocks!) regularly as well as how to ship a package under another name (that of the seller).

Feel free to use the contact form to tell your dropshipping experience, whether positive or negative, or to ask your questions.