Two popular models, ecommerce and dropshipping, offer promising approaches for success to burgeoning entrepreneurs.
How can you tell which choice is right for your new online business?
First, you’ll need to understand the difference between each. This will help you choose the option that best matches your skills and experience. By understanding the pros and cons of dropshipping and ecommerce, you can set realistic goals and hit the ground running toward profitability.
Understanding Dropshipping
Dropshipping is an online business model where the entrepreneur, or store owner, doesn’t keep any inventory or handle the physical products themselves. Instead, they partner with suppliers who handle manufacturing, storage, and shipping on their behalf. This frees the entrepreneur to focus on tasks like marketing and customer service.
Starting a Dropshipping Business from the Entrepreneur’s Perspective
To help you understand some of the pros and cons of dropshipping, here’s a general outline of what starting a dropshipping business from the entrepreneur’s perspective looks like:
1. Choose a Niche and Find Suppliers
You will first need to identify a niche that’s profitable and accessible. Ideally, you can find a product you’re passionate about and can market with experience.
Then, you’ll need to locate a supplier or manufacturer they can rely on to deliver a high-quality product to customers.
2. Create an Online Store
Since dropshipping is an online business, creating a robust online presence is critical to success. You will need to set up your store on ecommerce platforms like Shopify. Ideally, you will list your products across a diverse range of platforms that will allow you to reach as many customers as possible.
3. Marketing
Once you have selected a high-quality product, marketing the product is your biggest challenge. You’ll need to focus on content marketing, social media, search engine optimization, and email campaigns to get the word out and attract as much traffic as possible to your online stores.
4. Order Placement and Fulfillment
Dropshipping fulfillment is straightforward, which is one of its most significant advantages.
When an order is placed, you must be ready to handle crucial details like payments, forwarding order and shipping information to suppliers, tracking information, and customer service.
Understanding Ecommerce
Ecommerce is a simple business model that refers to the buying and selling goods online. As an entrepreneur venturing into ecommerce, you’ll be responsible for the entire sales process from start to finish. This includes product sourcing, inventory management, marketing, and customer service.
Ecommerce from the Entrepreneur’s Perspective
If you’re thinking of starting an online ecommerce business, here’s how the process will look so you know what to expect:
1. Sourcing Products
You’ll need to find a profitable product to sell first. The difference will be that you’re selling these products rather than just forwarding orders to another business.
You’ll still need to find high-quality manufacturers and suppliers to work with. But, with ecommerce, it’s also possible you might be creating your products. So you’ll need to locate a profitable niche and a market need that isn’t being fulfilled to succeed.
2. Managing Inventory
As an ecommerce business owner, you’ll need to develop the skills to manage inventory. This means understanding how and where to store your products while they await shipments, maintaining an accurate inventory count, timely reorders, and safe product handling.
3. Creating Online Stores
Like dropshipping, you’ll need a widespread online presence on ecommerce platforms like Shopify, WooCommerce, and Magneto.
4. Marketing and Promotion
A significant success factor is the ability to market your products to a broad audience. To effectively sell your ecommerce business, you’ll need to check all the boxes: a user-friendly website, search engine optimization, content marketing, social media, and intelligent use of paid ads.
5. Order Fulfillment and Customer Service
Once a customer purchases using your online store, you must prepare the package and create a shipping label. Then, you’ll ship the product yourself using your chosen carrier.
Once the order is delivered, you’ll be responsible for customer service and returns.
Dropshipping vs. Ecommerce
To help you decide whether ecommerce or dropshipping is right for your business goals, here are the answers to some crucial questions you might be asking yourself.
What is the Main Difference Between Dropshipping and Ecommerce?
The main difference between dropshipping and ecommerce lies in inventory management and shipping responsibilities. In dropshipping, entrepreneurs partner with suppliers who handle inventory and ship products directly to customers. In ecommerce, entrepreneurs manage inventory and shipping themselves.
Is Dropshipping or Ecommerce Better for Beginners?
Dropshipping may be more accessible for first-time entrepreneurs. This is because it requires lower start-up costs and less hands-on involvement.
Can I Combine Dropshipping and Ecommerce?
It’s possible to combine dropshipping and ecommerce in your online business by offering a mix of products you manage yourself alongside those dropshipped by suppliers. This hybrid approach is an excellent solution for flexibility and a diverse product offering.
What Are the Main Challenges of Dropshipping and Ecommerce?
The biggest obstacles you’ll encounter when it comes to dropshipping are low-profit margins, limited inventory control, and potential supplier issues.
Ecommerce challenges include potentially high startup costs, complex inventory management, and physical storage requirements.
Each model will share marketing, customer service, and reputation management challenges.
Using the Right Tools for the Job
Regardless of which online business model you choose, your business can benefit from utilizing comprehensive digital tools that can make buying, selling, and fulfilling orders easier.
DigitBridge is an example of an ecommerce and dropshipping platform that streamlines the process of conducting online business. DigitBridge is an all-in-one platform designed by industry insiders who understand the needs of at-home entrepreneurs.
Our platform can simplify the process of warehouse management, inventory management, integrations, and managing customer shipping and order information.
If you’re ready to automate the time-consuming operations that keep you from marketing and growing your business, get in touch with DigitBridge today and request a demo to see how we can help you succeed.
