What is dropshipping?
In the world of virtual stores, dropshipping or green sales are the sales of products that are not physically available. That is, where the seller does not actually possess the product at the time of purchase. The question then arises: who owns the product?
At the moment the customer makes the purchase, if the website is functioning properly and manages APIs, the data should be stored and sent to the brand's supplier so that they can ship the product to the store and then to the end customer. This handling of stock and inventories has several very interesting implications from a digital marketing perspective because the website only functions as a pivot for the end seller.
Characteristics of Dropshipping
Green sales are generating an immense impact on the e-market due to the proliferation of new stores. Regarding the relationship between online store and supplier, it is a win-win. Because the supplier manages to sell their products and the store manages to sell its products, it becomes a modern division of electronic labor.
The Store
The online store is dedicated to doing significant marketing work in the development of its infrastructure and web design, incorporating new concepts such as user experience (UX) as well as applied neuromarketing trends to improve its conversion rate (sales per visitor). Regarding investments, these generally include strengthening through understanding user behavior, improving SEO, and direct investment in Google Ads or Facebook Ads (without getting into obscure topics such as remarketing).
The Supplier
For its part, the supplier is dedicated to developing a B2B (business-to-business) system that allows the purchase and display of products from the store in question. Today, some suppliers still work by sending Excel spreadsheets to their distributors via email, primarily due to ignorance of automated methods. Another supplier profile is one that doesn't indicate actual stock quantities, but only their availability, missing out on all the benefits of automation.
Generally, these are companies that create products based on imported prototypes or small franchises that serve the e-marketplace.
Difficulties
The most common difficulties are delivery times, because dropshipping between Santiago and Puerto Montt is technically possible, but logistically makes no sense, especially if the buyer lives in the north. Without going into too much detail, this reveals that capitalization models occur less frequently in the periphery.
Another problem developers face is managing availability: How does the store update the supplier's stock in-store? For high-demand products or suppliers who handle many products but in low quantities, achieving efficient synchronization can be difficult. However, solutions today are available through APIs, even if you use an ERP.
Advantages
Leaving aside the disadvantages of this method, its advantages can be very beneficial for a fledgling project. On the one hand, the store can offer a larger quantity of products, and the investment in stock purchases can be zero, avoiding the typical problems of product stagnation and lack of liquidity.
In this sense, retail companies and large giants like Falabella and Ripley have been proposing alternatives like banking for years to provide a lifeline. Today, the task is for small stores to develop systems that are up to par and not die of success, as a friend says.