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Detailed Guide To Setting Up Magento Drop Shipping Business

There is no doubt that ecommerce has proved itself to be the best source for selling niche products. Whether you own a startup or an established ecommerce store that is swamped with orders, there’s always room to grow business. In the midst of ecommerce competitiveness, as a store owner, you must always find a business model that doesn’t require high capital, something that is convenient to manage and offers flexibility in product sourcing.

One of the finest ways to grow your ecommerce store is Drop Shipping. Drop Shipping is a great way to expand your product line, streamline your inventory and orders, or even kickstart your new online startup. It gives ecommerce entrepreneurs the freedom to stay on top of the current trends and generate some serious profits from their online stores.

Introduction to Drop Shipping

Drop Shipping is a popular model where store owners import products from third-party vendors (usually wholesalers or manufacturers that store inventory) and sell them on their ecommerce stores. This model can help store owners in cutting the costs and liabilities of stocking the merchandise themselves. The best part of this model is that the local supplier becomes invisible. Your customer will receive the item as it was directly shipped from you.

Drop Shipping can be described in 3 simple steps:

  1. Sell an item on your storefront
  2. Forward the order information to the supplier
  3. Supplier ships the order to your customer by your name

One of the most significant benefits of Drop Shipping is its straightforward process to manage it. You can ship products to your customers with only a few clicks. You can even run a Drop Shipping business while you are traveling the world.

Advantages of Drop Shipping

There are various benefits of Drop Shipping. Some of the prominent ones include:

  • You don’t need to worry about storing and managing product inventory. Think of acting as an intermediary.
  • You have zero to the low overhead cost which will ultimately save you from paying rent and maintaining warehouse to store your stock.
  • With Drop Shipping, you can sell different kinds of products. This allows you to serve a niche market or expand your product line with ease by selling anything.
  • It can be a hassle to deliver outside of your country or region because of high shipping rates, time constraint, and additional costs. Instead, you can strategically partner with different vendors that are closer to your audience and can deliver to your customers’ doorsteps faster than ever.
  • With all these advantages it is easy for store owners to launch an ecommerce business in no time. With little upfront cost, you can set up your store and start selling anywhere your vendors reach.

Disadvantages of Drop Shipping

While there are significant advantages, Drop Shipping has some cons too:

  • When you’re competing in the market, you will have to lower your prices to attract customers. This can cause you to sell at very low price markups and sometimes at a break-even too! It all depends on the products’ type that you would like to sell.
  • It can be a tough job to find and establish a partnership with reliable suppliers and get the best price. You might have to scan each and everything thoroughly because the vendor is invisible to the customers and ultimately it is your responsibility to deal with uncertain situations.

Drop Shipping for Magento

So far we talked about almost everything that you need to consider before developing a Drop Shipping store. However, the most important thing is to choose the right ecommerce platform that can help you in setting up everything efficiently.

Magento Platform is explicitly developed for ecommerce businesses. It has the power to support all kinds of online stores. The platform has various features that give out-of-the-box support. These features stand out when we compare Magento with other available platforms in the industry.

Why Choose Magento for Drop Shipping

Drop Shipping using Magento can have a significant impact on your business and its bottom line. The main reasons for choosing Magento platform for creating a Drop Shipping store over other ecommerce CMS(s) like BigCommerce or Shopify are:

  • No commission fees charged for every order
  • Self-hosted data
  • No hidden/extra charges
  • No limitation on the number of orders

Drop Shipping can be a tricky and confusing process to implement. Now that we have discussed the pros and cons of Drop Shipping, let’s look at some examples of a few Drop Ship solutions that can be used with a Magento store.

Drop Shipping Orders Manually

For a Magento startup that only processes a few orders a day, you can Drop Ship the orders manually. This means that when you have an order on your Magento store, you can manually send an email to the specific supplier for shipping it to the customer.

This method can help you in trying out new or multiple suppliers. In this case, you won’t have to invest much in any technology until you have everything set up perfectly and you’ve decided that Drop Shipping is the best solution for you.

Magento Drop Shipping Extensions

Once your store scales to the point that you can’t handle orders manually, there are many Magento Drop Shipping Extensions that can allow you to achieve your goal. An extension will directly help you in focusing on the Drop Shipping part of your business, and you will be able to save time and efforts.

However, before looking for a Magento Drop Shipping Extension, here are some aspects to consider:

Reliable Source: Make sure that you use only trusted Magento extensions from reputable sources.

Price: Pay only for what the extension is worth. Always compare the features and pricing with other extensions too.

Integrations: Make sure the extension has secure integration method. It should also integrate the orders across all of your sales channels too.

Feedback/Rating: Looking up others’ experiences gives a fair idea about the extension. Check out the feedbacks and ratings of the extension. They can point you in the right direction.

Here’s a list of some of the renowned Magento Drop Shipping Extensions. Give the following a try and let us know about your experience.

Conclusion

Drop Shipping is a unique method in which the store owners don’t maintain stock. Instead, they forward the orders to the suppliers who ship products directly to the customers. As a result, the store owner never handles the product inventory but the delivery is made through them.

Drop Shipping is easy to get started with and requires much less capital and efforts. If you plan on starting, make sure you read everything mentioned above and share your experiences and thoughts with us by commenting below.

Fayyaz Khattak: Fayyaz is a Magento Community Manager at Cloudways - A Managed Magento Hosting Platform. His objective is to learn & share about PHP & Magento Development in Community. Fayyaz is a food lover and enjoys driving. You can email him at m.fayyaz@cloudways.com