Jeff Bezos’ once said that, on the internet, there was space for tens of thousands of companies and more — he wasn’t wrong. At first glance, the saturation of the market is good for the customer since they now have more options than ever — but more possibilities also come with more confusion. After all, the human mind can only handle a limited number of options.
If you want to know how drop shipping works, then here are the things you need to know before you embark on this journey.
The democratisation of online commerce
Before drop shipping, to sell on the internet you had to join one of the e-commerce giants like Amazon. This was limiting, but at the same time, it guaranteed basic standards that the customer could expect such as reliable shipping and secure payment methods.
By democratising online commerce, the door has been opened to all kinds of businesses. This means that the customer now has more options than ever, but it also means that it has become increasingly more difficult to distinguish the good stuff from the bad.
The regular customer is not interested in where a product comes from as long as they can get the best quality at the best possible price. But because of the unlimited number of online shops – it is every day more and more difficult to choose the best possibility.
As e-commerce entrepreneurs, it is our responsibility to offer the best possible experience for our clients.
Dropshipping removes all kinds of geographical dependence. Nowadays anyone can manage an online store from anywhere (as long as they have an internet connection, of course) and serve customers anywhere in the world.
For the merchant, this means a wider market and for the clients, the ability to buy international brands with ease. This supposes great freedom of both parties but also entails, at times, complex planning.
What is drop shipping?
Drop shipping is a business model that consists of a direct shipment from the supplier to the customer. Here, the merchant only acts as a meeting point between the two. In other words, it never comes into contact with the product.
Normally, stores have inventories that they must organise and keep up to date but thanks to how drop shipping works, there’s no need for any of it. In this case, the merchant works as a window that showcases the available products. They can curate the products they sell but never has direct control over them.
The process is the following:
- The customer arrives at the merchant’s web
- The customer makes a purchase
- The payment is processed
- The merchant notifies the provider of the transaction
- The supplier ships the item to the customer
The trader is the one who sets the price, and therefore the margin, but the provider also gets a cut. Normally, this is a fixed rate that changes depending on the product.
As we already mentioned, the big difference to other types of online stores is that, here, the merchant does not have an inventory to manage. Although it may not seem like it at first, this opens up a lot of options and opportunities. When there’s no product to be managed, then there’s more time to spend on other parts of the business such as marketing or the design of the articles themselves.
How drop shipping works
This business model has only become popular in recent years thanks to the development of new technologies. These allow immediate communication between all parties to coordinate production and shipment.
Today there are many companies that offer drop shipping services such as Printsome On Demand. Each one has its particularities but, in general, they work in the same way.
Usually, the site offers you a software (or app) that can be installed on an online store. This creates a direct connection between the shipping systems and the shop’s transactions. These drop shipping brands offer compatibility with the most popular online shopping platforms like Shopify.
In addition to easy installation, drop shipping companies offer their services at a small price or even for free as long as certain requirements are met. For example, Printsome On Demand only charges a fixed fee per item sold. This means there are no monthly or subscription payments.
With the ease with which you can create a virtual store today and the offers of the dropshipping companies. Anyone can have a direct shipping business in a short time.
Hypothetical business – Custom T-shirts
Custom T-shirts are a lucrative yet, at the same time, highly saturated market. To stand out in this sector the merchant must pander to a specific niche and invest in important marketing efforts to be successful.
Not too long ago, in order to run a T-shirt printing business, you had to buy clothes in bulk and invest in printing machines. Not only are these printers expensive — especially the new ones — but they also take up a lot of space.
Perfect for entrepreneurs
Thanks to drop shipping, anyone who wants to start a career selling merchandise, can do so without the need to invest in machinery. This business model is perfect for entrepreneurs who wish to concentrate on the scaling of the business and leave the production details to others.
It is also very popular among YouTubers and other types of influencers who want to monetise their content through merchandise but do not have the time or capacity to manage a store.
Not only does this model offer an opportunity to manage your own online clothing store without the need to buy shirts in bulk, but it also allows for an almost unlimited number of designs. The number of available articles will only be limited by the platform of choice and the options it offers.
From printing to shipping
Thanks to the evolution of digital printing (DTG), T-shirts have become an ideal business for ‘drop shipping’. Unlike screen printing which requires to print bulk orders to be profitable, this technique makes it viable to produce one shirt at a time.
DTG works like a regular office printer with the only difference being that it prints on to fabric instead of paper. To start production, the only thing that’s required is a digital file with the design. DTG’s high fidelity with colours and intricate details also makes it possible to print almost any design.
Print on Demand
Here at Printsome, we’ve always supported creative endeavours which is why we’re proud to announce our brand new ‘print on demand’ service.
Thanks to our five years of experience in the apparel-printing industry, we were able to design a platform catered towards the needs of artists and designers who want to start their own T-shirt line. Printsome’s ‘Print on demand’ service has no minimum orders and can print any design with no colour limitations.
From the moment you connect your online shop (like Shopify) with our platform, anyone can buy one of your designs. We deliver all over the UK, Europe and the rest of the world. Drop shipping has never been this easy.
Why worry about inventory or logistics when we can take care of that? We deal with the boring stuff so you have more time to do what you love. To find out more, simply visit our brand new website.