If there’s one online business which never stopped since its beginning, that would definitely be drop shipping. The basic idea of drop shipping is the natural evolution of white labeling sales: buying a product and, by applying a branding campaign to it (whether if it’s digital or direct) making a bigger profit from it.
What you will read in this article:
The Setup of the Drop Shipping Model
Shopify is a CMS (Content Management System) which was born exclusively for eCommerce businesses. In 2016, the American company Oberlo launched their Shopify application which was entirely focused on drop shipping.
In fact, Oberlo is a simple tool which automatically lists products (with your added description and title) from another online supplier.
Oberlo was born (originally) as a tool which would have helped companies with products listed on many different portals like Amazon and eBay to centralize their products on a single portal, but it quickly developed into the biggest form of online drop shipping.
The Online Version
Back when IKEA started to use drop shipping as its main business tactic, the whole process was entirely “physical” and the branding part was simply done by using direct marketing strategies (back in the days, in fact, the internet wasn’t that big and paid social ads were not even born yet.)
With this in mind, things have drastically changed: with Shopify and Oberlo. In fact, it’s possible to instantly drop ship products from Chinese suppliers like Aliexpress, Taobao or Alibaba, without even physically dealing with the supplier itself (unless it’s for thousands of orders).
This sophisticated form of “online reselling” or “white label rebranding” is probably the go-to source of income for the savvy online entrepreneur, who runs dozens of stores at the same time, each one focusing on a particular niche.
What Changed From 2018
Drop shipping is easy to set up and, therefore, extremely competitive: there are, in fact, thousands of online stores with thousands of paid ads running which are using this business model.
In 2019, drop shipping has definitely become more skill based and the success of such stores isn’t simply relying on picking the right, “winning” product from the above-mentioned Chinese suppliers.
In fact, picking the right audience via paid social ads and monitor the ROI of such advertisements is indeed crucial for the modern drop shipper.
Several Forms Of Ads
As said above, online advertisement is the core part of such a business model, given the fact that the income from those products’ sales comes from a branding process which applies the store’s name to the actual product.
With this in mind, there are many forms of online advertisement which could be used in order to improve sales, ranging from paid social ads (sponsored posts on Facebook, Twitter, and Instagram), SEO strategies and Influencers.
The last one, in particular, has been proved to be one of the most successful ones, given the fact that the ad will be placed on a platform which already has high-level organic traffic.
Even if drop shipping is (by now) one of the most commonly used forms of “online entrepreneurship“, it will most likely remain solid throughout the entire year.
With this in mind, especially if young, starting a drop shipping business could be a fantastic learning experience for the future successful entrepreneur.