Dropshipping, Its Advantages and Disadvantages | Scope of Dropshipping in India | Dropshipping vs Affiliate Marketing

Dropshipping, you should have heard the word very often on the internet as it is trending and becoming a major source of profit and income for many of the Digital Marketers. Many of the netizens confuse it with building your E-Commerce store or creating Affiliate Website but it is bit different from them. We will be discussing What is Dropshipping in details and we will also address some other aspects of the term in details.

 

Dropshipping in India

In this Blog we will be discussing about the following topics :

1. What is Dropshipping ?
2. Scope of Dropshipping in India
3. Advantages and Disadvantages of Dropshipping
4. Difference Between Dropshipping and Affiliate Marketing
5. Conclusion

 

What is Dropshipping ?

 

Dropshipping simply means to act as an intermediate between a seller and a consumer. The traditional Dropshipping now a days is trending and becoming a way of earning money online. 

Take an example that there is a product available on a big E-commerce website say abc.com for $4 and you create a website xyz.com on that product and sell it for $10 on your website. After someone orders from your site you take $10 from the consumer and order on xyz.com for $4 and keep the remaining $6 profit, this is called Dropshipping.

 

Also for better understanding suppose you have a shop in a market for T-Shirts but there is no T-Shirts present in the shop only images of T-Shirts are present. And when customer comes to your shop and buys any T-Shirt then you will contact the factory owner for the designed T-Shirts which your customer selected and the factory owner will send the T-Shirt to the desired location. If you take $20 from Customer and pay $10 for the T-Shirt to the factory owner, you earn $10. This full model is known as Dropshipping.

 

In Dropshipping retail customers are present majorly. Also for the better Dropshipping model, the vendor of the product must be the manufacturer or inventory stockists because the prices will be much lower than from any other segment.

 

 

 

Scope of Dropshipping in India

Dropshipping in India has also been in trends from last couple of years. The impact definitely came from western countries where Dropshippers have made millions using the model and now more and more Indian Dropshippers are getting into this field. If we want to talk about the scope of Dropshipping in India, it will include Indian products which can be Dropshipped in India as well as other countries and the other aspect is Indian products getting shipped in india only.

 

Indian Product - Indian Market

In India there can be variety of products found in a lower price which can be sold directly to Indian as well as foreign market. But if you think to do Dropshipping by finding a product on any Indian website then it will be difficult to pursue. So if you talk about Indian products the Dropshipper needs to find a manufacturer who can directly ship its products across India.

Taking an example of the model, suppose you have reached out to a local shoe manufacturer or distributor which has agreed to all your terms and will be shipping the product as per your orders. 

Now you have created your Dropshipping website on any of the available platforms and advertising in India through Facebook Ads. After you get the order from the website, you divert them to the manufacturer or distributor for shipping in India.

Now some of the cons for pursuing Dropshipping in India can be that people here prefer COD i.e, Cash on Delivery which can make you invest more bucks in the business. Also trusting on a random brand seen on the internet is difficult in India, so the advertisement cost may be high. 

But the good thing is that the average CPC is less as compared to other countries in India. Also one can find variety of products from local vendors and distributors.

 

Indian Product – International Market

The scope of Dropshipping in India includes shipping the Indian products in the International Market. You can collaborate with any manufacturer or distributor in India who can provide you very cheap products and selling them in International Market can make you more profit as compared to the Indian Product – Indian Market model.

The challenge in this model is to find the vendor who can ship its products internationally in different countries as per your target audience. The CPC spent on advertisements may be high in foreign countries as compared to India. But if you can create a goodwill for your brand in the market you can earn sufficient bucks from Dropshipping.

 

In the conclusion to Scope of Dropshipping in India, we want to tell you that in the future more and more Digital Marketers will be pursuing Dropshipping in India and many of the Indian Digital Marketers will be Dropshipping Indian Products in the foreign countries. 

Also if one is doing Dropshipping in India then you will find less variety of products as compared foreign vendors like in china etc. So according to us doing Dropshipping in India with Indian products is bit difficult but doing Dropshipping Indian products in International market can be worth doing.

 

 

 

Advantages of Dropshipping

• The major advantage of Dropshipping is that the dropshipper does not require any inventory for the product.
  
  
  
• In Dropshipping you do not need to ship the product to your customers, your vendor of the product can directly ship it to the desired shipping address.
  
  
  
• As Dropshipper does not require any inventory management or owning the product so it requires less capital to start. But Dropshipping is very difficult to start with zero capital.
  
  
  
• Returns will also be managed by your Vendor of the product in Dropshipping.
  
  
  
• In Dropshipping, variety of products can be sold from your website.

 

Disadvantages of Dropshipping

A ) Lead Generation Platform - It is not really the disadvantage but is one of the aspect i.e, in Dropshipping you need a lead generation intermediate which is majorly a website on which you can list your selected products. So Dropshipping requires some initial investment to pursue. 

You can still create your website with free Blogger hosting, you will just need to pay for the domain charges but setting up a Dropshipping website is difficult comparatively to other platforms.

 

B ) Actual Price of Product - One of the major flaw in the concept is that in Dropshipping you are charging some bucks more than the original price from any other website and if your customer get to know about the actual price then your branding can be affected. 

In this internet generation many of the users check or compare the prices of the product on the internet first before buying. So keeping it in mind many of the Dropshippers keep a very less margin which can be acceptable even if your customer find the product with the original price.

 

C ) Dependency on Vendor - In Dropshipping model, you need to be dependent on the vendor of the product. If there are any issues arising on vendor end then it will also completely affect your Dropshipping business. For example, if the stock is not present on Vendor end then you cannot complete the orders of your own clients in this model.

 

D ) Scamming - The other disadvantage is also that there are a lot of scammers available on the internet. Similarly in Dropshipping business there are many scammers present who have degraded the field a bit due to which a new consumer always have trust issues on a random website rather than already established companies like Amazon etc.

The scammers sometimes takes the money from consumers through their website but do not deliver the product, some of them do not give after sales service or some promises kept on their website before sale.

 

E ) Returns -  Returning products are also a big disadvantage in this model as the consumer who have bought your product will apply for return on your website only, then after you need to apply for return on your vendor’s platform.

 

F ) COD – It can also be counted as a disadvantage of Dropshipping model as many of the consumers across various countries like India depends upon Cash on Delivery payment mode. This is why Dropshipping is bit difficult in these countries.

 

G ) Delivery Speed – The delivery may take some time in this model as if you are running a Dropshipping business you need to order the stuff on your vendor’s website which may take time. So many of the successful Dropshippers works on team and have specific employee taking care of this point.

Also suppose your vendor is based at China and you are advertising your Dropshipping store in USA then firstly the process of ordering from your vendor after getting the order on your website may take some time and secondly delivering the product from China to USA may take more time as compared to other E-Commerce sites.

 

  

 

Difference Between Dropshipping and Affiliate Marketing

Many on the Internet and even Digital Marketers comes up with the confusion between Affiliate Marketing and Dropshipping. Dropshipping and Affiliate Marketing are definitely different options but are nearly similar. So to understand the concept about difference between Dropshipping and Affiliate Marketing check out the below points :

1. Dropshipping is selling anyone else product on your lead generation platform on your terms whereas Affiliate Marketing is selling anyone else products on their terms by any of the online method.
   
   
   
2. In Dropshipping you can decide your margin for selling anyone else product but in Affiliate Marketing the margin is generally fixed and is decided the vendor or company only.
   
   
   
3. Affiliate Marketing is older then Dropshipping and is pursued by more number of Digital Marketers as compared to Dropshippers.
   
   
   
4. In a wide range of analysis the profit margins in Dropshipping are lesser than Affiliate Marketing across the Internet. In Affiliate Marketing the average commissions ranges from 10% to 50% But in Dropshipping the average commission ranges from 5% to 20%.
   
   
   
5. The Initial Investment in Affiliate Marketing is comparatively less than in Dropshipping. In Dropshipping one may need to pay for lead generation platform, testing product and many times for advertisements But in Affiliate Marketing one can start with even zero bucks and sometimes some comparatively lower initial investment may require.
   
   
   
6. In Dropshipping you need to give after sales service or customer service but in case of Affiliate Marketing the customer service will be taken care by the vendor or the company only.
   
   
   
7. For growing the business Dropshipping model is more based on Advertisements as compared to the Affiliate Marketing.
   
   
   
8. In Dropshipping model the payment is made way before the shipping and is faster but in Affiliate Marketing the payment will be received after an average of 10 days or even monthly in some cases.
   
   
   
9. In Dropshipping you can adjust the price of the product as per situations and demands which makes you earn more profit but in Affiliate Marketing the margin is fixed so you cannot make more than the fixed commission.
   
   
   
10. You can create your own personal brand better in Dropshipping as compared to Affiliate Marketing as in Affiliate Marketing the sellers majorly buys the product from the vendor’s website making him create his brand only.

 

 

 

 

Conclusion : In the Blog, we have shared almost every aspect of Dropshipping. We have explained specifically that what is Dropshipping with examples. We have shared with you the Scope of Dropshipping in India with different models in details. We also talked about advantages and disadvantages of Dropshipping with detailed points. Also we have shared an informative comparison or difference between Dropshipping and Affiliate Marketing.

 

So for Dropshipping you will need some initial investment for sure and for pursuing Dropshipping it is a requirement. You will need to buy the testing product so that you can ensure the quality of the product to your customers. You will also need a lead generation platform majorly website which will seek some bucks of investment.