Anyone who is concerned today with the leap into self-employment in the area of e-commerce will not be able to avoid the topic of drop shipping. After all, this business model is a particularly inexpensive and low-risk way of acquiring your own company. But how is the structure of larger assortments structured in DropShipping? Are diversity and drop shipping mutually exclusive here? We get to the bottom of this question and also provide you with practical tips for an optimal range development for DropShipper.
DropShipping: Probably the best online concept of our time
The independence in the on-line trade stands with many founders still highly in the course. Most prospective entrepreneurs are interested in finding a start-up concept that does not require a great deal of capital on the one hand and involves as little risk as possible on the other.
In classic online trading, capital is needed above all to acquire the first inventory. Similar to a local trader, you need a certain stock of goods to start selling. It is easy to see how high this chapter requirement is if you want to trade in a wide range of high-quality products.
Let’s imagine a shop that wants to offer its customers 500 different articles with an average purchase price of 35 euros. Even if only two articles per product are purchased, the purchase costs already amount to 35,000 euros. However, such an amount must first be able to be pre-financed. This makes the foundation process very difficult.
The DropShipper has a clear advantage over the dealer who buys in advance
If one considers the risks that can be associated with self-employment, then these are above all dependent on the running costs, which must be raised independently of the turnover. Here, too, the dealer who buys in advance is clearly at a disadvantage. The total of 1,000 products from our example must be stored appropriately. This requires a fully equipped warehouse on the one hand and the necessary personnel on the other. One can well imagine that in this way several thousand euros in expenses come together each month, which first have to be paid from the current profits. If the revenues are not sufficient, then these costs still continue and quickly lead the trader into a dangerous downward spiral, at the end of which the bankruptcy often ends.
The DropShipping trading model shows us that there is another way. In this case, the retailer completely foregoes the advance purchase and thus saves a lot of money. Since his products simply remain with the connected suppliers, he neither has to pay for them nor store them. In addition, the costs for storage and the necessary logistics personnel are eliminated. Drop shipping is always carried out by the supplier who sends the ordered goods directly to the end customer.
In sum, two essential negative features of classical online trading are omitted: no special capital is required and the running costs are significantly lower, which leads to a considerably lower risk. With these two aspects, no founder in the field of e-commerce can avoid dealing with the topic of drop shipping today. It would be negligent not to deal with this concept before deciding on an independent career in online commerce.
Mass or Class: Importance of Assortments in Online Commerce
If you restrict the online trade to its really important components, then you will quickly realize that the most important thing is the assortment. Of course, the success of a shop depends on its theme, its design, its user guidance and its service. Ultimately, however, there is only one reason for customers to deal with your web shop at all: You want to buy the offered products.
This makes it quite clear that the assortments in online trading are of major importance. In this respect, by the way, this form of trade is no different from its stationary counterpart. Also in the shop everything revolves around the question which products are offered here. If the offer leaves something to be desired, then the customers will soon also fail to appear.
Time and again, online retailers ask themselves on what basis they should actually develop their product ranges. Is it rather a matter of providing a small and handpicked selection or should one rather position oneself universally and offer customers as wide a range of products as possible? So the question is: mass or class, when it comes to setting up your own product range.
The question cannot be answered without including the topic of the shop and the target group. This clearly shows us how important it is to develop a concrete business idea on the one hand and to define a concrete target group on the other. Only when both have been achieved can we begin to assess which approach is the better one for our customers. In this respect, the DropShipping trading model does not differ from classic online trading. However, DropShipping offers the great advantage that very extensive assortments can also be displayed here, which would lead to considerable capital requirements for conventional Internet retailers.
How to build up your own huge product ranges
DropShipping thus offers the possibility of building up very large assortments if required. Since the products do not require advance financing, the delivery program of a drop-shipping shop can be almost unlimited. However, this should not tempt you as a trader to actually bet only on size and volume. The quality and careful selection of products are the most important factors in the development of product ranges.
In practice it has been shown that the use of DropShipping.de offers a very valuable support. Here, the DropShipping dealer has direct access to approximately 750 wholesalers and manufacturers who are willing to supply him with more than 4.2 million different products under DropShipping business models. This eliminates the time-consuming search for suppliers on the Internet and, of course, the tedious work of informing manufacturers and wholesalers about the advantages of DropShipping, which often enough does not work.
However, the immense selection of suppliers and products in the DropShipping database should not tempt you to compile true giant assortments. Keep in mind that your shop should always follow a certain theme and that it must be possible for your customers to keep track of the selection of products. Otherwise you will quickly lose your profile. As a result, your visitors and customers will no longer be able to remember your shop and will seldom return to you. So make sure that your shop always keeps a clear face despite all the variety and selection.
With tips and tricks to the successful DropShipping-Shop
DropShipping is a science in its own right. You have to know a little about the business in order to achieve good or very good results on the basis of this business model. However, this is a very comprehensible and simple concept. As a founder, you benefit from expertise on the one hand and experience on the other. The following five practical tips, which we have compiled for you, give you both. The tips and advice will help you build a successful DropShipping concept with a market-driven product range.
It is not possible without a fixed product range
Many dealers make the mistake of not clearly defining their product range at the beginning of their independent career. With regard to the business idea to be developed, you limit yourself to the fact that you want to deal with e-commerce. However, this does not become a business idea until it is limited to a specific topic. Therefore, you should take the trouble at an early stage to decide on a very specific product area and to adjust the concept of your company accordingly.
You will only have a chance in the market later on if your visitors and customers can clearly recognize which products you stand for and what they can expect from you. The more clearly you define the product area, the better for your future business and market opportunities.
Big or small – the truth often lies in the middle
What is better, a small and clear assortment or a large and versatile assortment? There is no clear answer to this question. Much depends on the specific product area. Some topics just need a lot of products to be complete. For others, a smaller selection is enough to satisfy most potential customers. Therefore, in the first step, always try to find out which assortment size is appropriate for your individual product range.
You can also let yourself be inspired by your future competitors. A look into the shops of your direct competitors is very useful. In general, the truth often lies in the middle: Create assortments that are large enough to fascinate your target group and still keep the clarity.
The development of the product range is difficult without support
A shop is only as good as its assortment. And in the DropShipping area, many retailers have problems creating and developing truly high-quality delivery programs. This is mainly due to the fact that drop shipping dealers always assume that there are very few manufacturers and wholesalers who are willing to supply online dealers on the basis of drop shipping. This impression comes from the fact that as a shop operator one repeatedly collects the experience that many suppliers have never heard of DropShipping and are therefore not prepared to offer corresponding services.
And indeed: Those who are looking for the right business partners in this segment on their own are often disappointed. So it is much better to rely on a strong partner like DropShipping.de. Here you will find a database with about 750 DropShipping suppliers who will not have to convince you of the advantages of this model.
Dynamic work on the assortment is indispensable
Let us come to another mistake that many dealers make with regard to their assortment. They assume that the development of the delivery programme is a one-off effort. Once the assortment has been completed, it remains permanently unchanged. This is about the same as a local retailer who never changes his shop window for years and then wonders why the number of his customers is slowly but steadily decreasing.
Don’t let it get this far, but make it your habit from the very beginning to work on your assortment dynamically. Your primary objective should be to keep your product range as attractive as possible for your customers on the one hand, and to shape it in such a way that your sales and profits can be constantly increased on the other. By the way, it is also absolutely essential to always part with products in good time that stand out due to a high return rate.
Eyes open for new products and innovations
There is one thing you should also consider in relation to your assortment. Depending on the product area, the market changes again and again due to innovations and current novelties. Your customers rightly expect you to stay up-to-date at all times and to carefully adapt your product range to new developments. A little effort is needed to achieve this.
It is essential that you always keep an eye on what is happening in the related markets. Your suppliers are a first source of information. Check actively regularly with your manufacturers and wholesalers for news in the assortments. In addition, you should also use the Internet for research and go in search of interesting innovations from time to time, at the latest every three months. This will keep your assortment attractive in the long term.
You now know that the variety of ranges and DropShipping go well together. But how does the drop-ship business interact with large bulky products? Read herehow you can use the trade with bulky products perfectly for yourself and profit from it, especially as a DropShipper.
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