What is dropshipping

And what should you pay attention to?

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Wat is Dropshipping?

Dropshipping is a form of e-commerce where the webshop ships products directly to customers without inventory. The customer orders a product in the webshop. The product is then ordered from the supplier, who then ships the product directly to you. Because the webshop itself doesn't hold any inventory, they save on costs and expensive logistics investments.

Advantages of dropshipping

Dropshippers place products from dropship suppliers in their online store. These suppliers are usually manufacturers or wholesalers from the Netherlands or abroad. Dropshipping has several advantages for the entrepreneur (and a disadvantage for the customer):

  • They hold no inventory. So renting or purchasing storage space is not necessary.
  • They incur no purchasing risk. They only pay the supplier after a customer purchases a product in the webshop. The sales price consists of the purchase price, costs for processing the order and shipping by the dropship supplier, plus the profit margin.
  • They don't need staff to pack and ship the order to the customer.
  • They don't have to deal with unsellable surplus stock.

Disadvantages of dropshipping

Dropshipping seems like an easy way to make money with minimal investment. But dropshipping also has disadvantages, especially for you as a customer:

  • They are responsible for providing proper customer service when resolving issues during delivery. For example, if a package arrives late, missing, or damaged. If the dropshipping supplier makes a mistake, it damages their reputation. Unfortunately, they often don't have good agreements with the supplier regarding issues like warranty and delivery times, product returns, and inventory availability.
  • Dropshipping suppliers often sell their products to other online stores as well. A possible consequence is that competing online stores offer these products at very low prices.
  • The online store cannot verify that a product is in good condition when the supplier ships it to the customer. They also cannot be sure that the supplier is delivering the correct product to the customer.

Research

Research shows that 85% of dropships come from websites like AliExpress, Temu, Wish, or similar. This explains why delivery times sometimes take 3-8 weeks. It's also becoming increasingly common for dropshippers to be unresponsive or difficult when something goes wrong. It's also often questionable whether the goods have a CE mark and whether excessive chemicals were used in the production process.

Are you better off?

It's worth doing your own research. For example, we found a beautiful men's watch online, discounted from €79.00 to €59.00, with free luxury gift packaging, a 1-year warranty, and a new battery. Sounds good, right? Well, not really. A quick search on AliExpress quickly yielded several results, including one in particular:

Titanium-look men's watch: €3.50 including shipping.

Titanium-look men's watch with luxury gift packaging: €5.40 including shipping.

All in all, a good deal for the webshop, but not for you as a customer. For the price you pay in the webshop, you could easily buy 10 of these cheap watches. And that 1-year warranty? It'll last a year. And if it breaks within a year? No problem, we'll send you a new one within 4-8 weeks!