Dropshipping

Would you like to open an e-commerce, but the idea of setting up and managing a huge warehouse full of goods frightens you? Then we have the perfect solution for you: open your online shop in drop ship! 

Dropshipping is a retail strategy in which the seller buys items from a third party, according to the requests, delivering not to its own warehouse but directly to the customer without ever handling the product directly. Suppliers will remain invisible to the customer while having responsibility for storage and shipping. You will then only have to manage the website, marketing activities and customer service. 

Although it seems complex, it’s actually a very simple e-commerce model and used to easily start a full-fledged business. In addition, unlike other formulas, such as affiliate marketing (which we have explained here), apparently the sale will be totally on your behalf: The brand that your customers will see both when buying and receiving the package will be yours and you can really create a strong and successful brand.

The reasoning behind dropshipping is simple: why not buy the merchandise only after concluding a sale? When using dropshipping as a business model, there are a few steps followed to get the order to the end customer. 

Here is how the process is structured:

1. The product is created by the manufacturer and made available for sale
This is the work of the manufacturer: to realize what will be put on sale to wholesalers and dropshipping suppliers.

2. The product arrives at retailersNow the products are then in stock. When the customer places an order through the online shop, your store in turn places the order with the trusted supplier. 

3. The supplier sends the order directly to the customerThe supplier will take care of the shipment to the customers, who will receive the package in your name.In this way your shop can deal exclusively with advertising products, leaving to a third party the costs related to warehouse, packaging and shipping.

Now that you know better the processes of this business you can consider whether it is appropriate to apply it to your shop. Getting started is easy and involves less risk than a traditional store: no need to follow inventory and organize shipments, you have less responsibility and need less initial investment as you will purchase the products after your customer has finalized the payment of the order.  This also leaves you more room to test the popularity of different products that can be especially useful if you are new to that industry.   

Less doesn’t mean zero though!  There are in fact some risks that you can run into if you decide to venture into this world!

You may not get high gain percentages. The margin is very variable and fluctuates between 5 and 30% on average. This is the main factor that can determine whether or not to invest in a dropshipping business. It is also important to remember that, as with all online activities, you also need an investment in marketing and PR. 

A second risk could be to find unreliable suppliers and lack of products in stock. This is very important because any problems regarding the availability and delivery of the products are traced back to the seller and not to the supplier. The customer then, in case of complaints about the items or delays in receiving the package, will go to retaliate on your customer care. Therefore to choose a supplier on which to rely and that it is serious and qualified is source of gain for you, also to level of image and reputation.

In addition, you will have to deal with competitiveness! There is a lot of competition in this industry, especially when you consider the amount of online stores that exist. This is why being successful with dropshipping is not easy, especially in Italy and if you choose to sell generic products, with high prices and without an effective marketing strategy.

 Create a specific and recognizable brand that sells unique products and with an edge over your competitors (if you need suggestions on how to analyze them, read here.

Remember that being generalists, in dropshipping, does not pay… Literally!

You can find your supplier by yourself, perhaps by choosing local companies or you can rely on platforms known nationally and worldwide! Among these stands out Worldwide Brands, it is a really large directory of quality suppliers, which you can access by paying a one-time fee of 299 dollars.

Other equally reliable global platforms are:

• Oberlo 
• Spocket
• Aliexpress
• eBay
• Amazon

For this business, currently Asia is the continent that is growing faster with a view to dropshipping and hosting the highest number of wholesalers. But there are also many Italian dropshipping suppliers, here are some divided by category:

• Bazarissimo: wide assortment of tech products, clothing, sports and leisure, household products and more. 
• B2B Designer: clothing.
• LedLux: lighting and home automation products.
• BigBuy: wide range of products of all kinds.
• Lightinthebox: all kinds of products.
• Intracom: electronic, computer and office products.
• PrezzoOK: electronic products.
• Babydistribution: products for children and infants.

Dropshipping in Italy entails the need to comply with Italian tax legislation. 

We know that you are already wondering: do you need a VAT number to dropshipping in Italy? The answer is yes. A dropshipping shop is a commercial activity in all respects and requires first of all the opening of the VAT number with the Ateco code of the retail trade of products via the internet. 

Like all these businesses then serves the registration in the Register of Companies, at the Chamber of Commerce of the territory, the registration to the management INPS traders and officially communicate the start of business at the Sportello Unico Attività Produttive of the municipality. As for billing, the methods are the same of all other online shops. Don’t worry, we’ve explained all the steps you need to follow to sell online right here. 

If after all these considerations, advantages and disadvantages, you have understood that this is the right strategy to start your new brand… You just have to start selling!