When you hear the word "dropshipping," you might think of products from China, shipping worldwide, and websites like AliExpress.
But there are actually four ways to do dropshipping. Even if you prefer international dropshipping, it's good to know about other ways to get products to your customers.
Retail Arbitrage: Retail arbitrage became popular with eBay and Amazon. It works like this:
- You find products, like shoes, selling on eBay for $65.
- You buy as many of those shoes as possible for $65.
- Then, you sell those shoes on Amazon for $100, making a $45 profit.
This method involves finding products cheaper in one place and selling them for more somewhere else. People often buy items from stores like TJ Maxx or Marshall's and sell them online. It's not super-efficient on its own, but apps like Amazon's can help you find profitable items in physical stores.
Benefits: Easy to start, quick money.
Downsides: Against Amazon's rules, tax issues, and not a great long-term strategy.
International Dropshipping: This is one of the most popular types. Here's how it works:
- You use platforms like AliExpress to order products from manufacturers in other countries.
- The manufacturer sends the products to your country.
- Depending on your agreement, they might send items to a warehouse, 3PL (third-party logistics), or directly to customers.
This method is known for its affordability and wide product selection.
Benefits: Cheap products, more variety, easy to start.
Downsides: Shipping takes longer, quality control can be a problem.
Domestic Dropshipping: Some local businesses prefer this method:
- You work with manufacturers in your own country.
- They ship products faster (1 - 3 days), resulting in happier customers.
- Quality control is better because you have one trusted manufacturer.
Benefits: Quick shipping, better quality control, access to more products.
Downsides: Higher costs, a middleman, and you must qualify as an Approved Dealer.
Hybrid Dropshipping: This combines both international and domestic approaches:
- You stock some top-selling products locally.
- You also sell a wide range of products from international distributors.
- When orders come in, you split them between your local inventory and outside distributors.
This method helps you stay in stock more consistently.
Benefits: Better control, fewer stockouts, faster shipping, and bulk buying.
Downsides: Requires complex coordination and technology.
In conclusion, dropshipping has different methods. You don't have to stick to just one. Trying something new might lead to success.
