Dropshipping Vs Ecommerce – Which is the Best?
In this blog, we are going to go through the key difference between Dropshipping Vs E-commerce. Dropshipping is a business model in which there is no direct involvement of the seller. This means that the seller only takes care of the order from customers and the suppliers cover the shipment part. The products directly reach customers without a stop at the seller’s house. This business model is not difficult to start and does not require a large capital. Similarly, many people are making a lot of money via dropshipping. You must be thinking that both are done via the internet so how come they are different?
Well, let look at some of the differences
Dropshipping Vs Ecommerce – Startup Difficulty
Dropshipping has the most convenient startup for new sellers. You will require a minimum amount of capital to start a dropshipping business. Similarly, the resources required to start are also less. Most important, you do not need to be a high-class business with lots of experience. All you need is an idea, a supplier, and an online shop to start running your business.
On the other hand, E-commerce is difficult as compared to dropshipping. It takes a lot of time and effort to initiate. There is so much to do in E-commerce for the initiation process only.
Dropshipping Vs Ecommerce – Initial Cost
The best platform for dropshipping is Shopify. All you need to do is buy a basic plan for drop shipping for $29 and a domain for your business. There is no need for hosting. Shopify will provide everything else for free.
However, when it comes to eCommerce you need a domain, hosting, and a theme best suited for the business. Moreover, you will need photos, descriptions, and details of the products as well. You will have to pay someone to do all those tasks. Otherwise, it will be difficult to set up an eCommerce store. Moreover, you will need the best optimization for the store.
Inventory – Dropshipping Vs Ecommerce
Dropshipping does not require product storage so there is no inventory. The products are ready and waiting with the suppliers to go out any time. When an order comes, the suppliers immediately pack the items and ship them to the customer. You do not have to buy items and store them in your inventory.
Ecommerce is also called In-House business. In this, you need to buy items and store them in your inventory. You will not receive the luxury of a warehouse for storage. You will need to make space on your own for the products. Moreover, your inventory is limited and can be out of stock at any time. Whereas, in dropshipping, the inventory is almost unlimited. So, you will need a huge number of items to start an ecommerce business.
Shipping and Delivery Time
Delivery time in dropshipping is more as compared to E-commerce. It takes about 15-20 days for dropshipping to deliver something. Whereas in E-commerce, the process of delivery is dependent on you. Whenever you decide to dispatch the item is up to you. Likewise, you can make more money by offering same-day delivery services or two-day delivery services while charging extra.
Revenue Comparison – Dropshipping Vs Ecommerce
The revenue generated by drop shipping is less as compared to E-commerce. This is because individually buying a product increases its cost.
In Ecommerce, you order a huge shipment, and that decreases the overall cost of the items. So, when those items arrive then you can sell each of the items at their original prices. This increases the profit margins as compared to that of the dropshipping.
This one is obvious. In dropshipping, you have no control over your business. Customer orders something then the seller forwards that order to the suppliers and the suppliers ship the goods directly to the customer.
There is no quality control or insurance for the safety of the product. If the customers receive damaged goods, then the one getting in trouble is you.
In Ecommerce, you control your business. You can follow the requirements of your customers and ensure a perfect product. The packing is good, the delivery time is good and the item safely reaches the buyer.
Ecommerce falls a bit behind when it comes to product limitations. You can only store several items unless you have the space and money for it. But even they will run out eventually and they cost more.
However, in dropshipping, you are free from the headache of storage and availability of the products. The products are unlimited. So, every order can be fulfilled even if there are thousands in the queue.
Moreover, for Ecommerce, you need manufacturers to make the product and that costs a lot too. But in dropshipping, the products are already made and waiting for their order.
Market Risk – Dropshipping Vs Ecommerce
You can experiment with different products while doing dropshipping. If one product does not offer the ideal revenue then you can change the theme at any time.
However, in Ecommerce, you get to make that choice only once. If you are planning to run an online T-Shirts store then there is no going back. Because the products are already made and money is paid. So, you need to sell those no matter what.
Both have their drawbacks and advantages. In the end, the choice is yours. The one that suits you the best or you have a passion for, go with that. For more information and guidance on business models feel free to contact us.