Expert Guide on Dropshipping vs Ecommerce

In today’s business world, online companies are growing more and more. Technology and business intelligence have brought multiple opportunities for vendors that intend to take advantage of innovative ideas and new business models instead of starting a traditional brick-to-mortar company. Thus, eCommerce and dropshipping businesses are in today’s pick!

Let’s move forward into explaining more about dropshipping vs ecommerce companies as well as expanding on their similarities and differences.

What’s An Ecommerce Company?

Ecommerce is the type of business in which the day-to-day processes include selling and buying products or services through the Internet. The order procedures take place online but the delivery of the order can be managed in different ways depending on the needs and preferences of the customer.

How Do Ecommerce Businesses Operate?

The e-commerce order fulfillment process can be separated into three key parts:

1. Receiving The Order: In this initial step, the customer places his order and the company receives the order request through its ecommerce platform.
2. Processing Order Details: The company receives the order details and processes the order.
3. Shipping Procedure: In the last step, the order is sent out and the company informs the customer about the tracking details of the order.

Ecommerce Business Models

There are several types of eCommerce business models. Specifically:

• Business to Consumer (B2C)
• Business to Business (B2B)
• Consumer to Consumer (C2C)
• Consumer to Business (C2B)

Advantages of Ecommerce Companies

As mentioned earlier, ecommerce companies thrive in today’s world! However, in order to succeed you need to invest in multiple resources such as an inventory management software, a website, warehouses for saving stock, marketing campaigns and so much more. After investing in the necessary tools, the business will take advantage of the following benefits:

1. Automation of Standard Operating Procedures:

When running an e-commerce company with the business tools needed, you will notice the automation of the standard operating procedure. In other words, processes such as inventory taking, performing tracking tasks, or writing down inventory data will be automated.

1. Business Autonomy

By running an ecommerce type of business you have the autonomy to produce and sell your own product. Furthermore, you’re involved in all the business processes from manufacturing the product to the order fulfillment so you have the ability to control the business development.

2. Enlarge Sales:

Since an ecommerce business is running through a website, it means that potential clients from all around the world have access to your store. In other words, the customer base and the target group of the business are widened.

3. Increased Customer Satisfaction:

Combining an ecommece platform with CRM tools will lead the business to increase the satisfaction of its customers. Note that an inventory management solution will play a crucial role in that. That’s because by working with such a tool you will manage the company’s inventory so as to avoid out-of-stock situations as well as overstocking ones. Additionally, by choosing an inventory management software that integrates with a shipping solution you will have the opportunity to manage the order delivery as well as the respective tracking information while also informing the customers accordingly.

What’s A Dropshipping Business?

In this business model, the company doesn’t keep its selling products in stock nor stocks its own inventory. Instead, the company or seller orders the products from a supplier after receiving the customer’s order.

How Do Dropshipping Businesses Operate?

Dropshipping businesses’ operations include multiple activities. First of all, the drop shipper receives the order from the customer. Then, the drop shipper sends the order’s details to the supplier, and the supplier ships the order to the customers. After that, the seller pays the drop shipper and the customer receives the order.

Advantages of Dropshipping Companies

Dropshipping business is the ideal model to start with. Why so?

1. Low Expenses: In a dropshipping business, the seller doesn’t need to hold the stock in a warehouse. That happens because the stock is handled by the supplier of the drop shipper. Usually, the supplier stocks the product inventory thus the drop shipper has zero warehouse costs.
2. Less Manpower Costs: In this type of company, the staff is not needed since there’s no physical store.
3. Global Reach: By partnering with suppliers based on different continents and countries you will have the ability to avoid the payment of customs while the price of the products will not increase.

Similarities of Dropshipping and Ecommerce Companies

To start with, both dropshipping and ecommerce fulfillment can be profitable for businesses. These types of businesses have many similarities:

1. Both of them operate through the internet.
2. They need a website and an ecommerce platform to run properly.
3. Ecommerce and Dropshipping companies have virtual ecommerce stores.
4. They have a considerable customer base due to the fact that they operate through the internet.
5. They use social media platforms and other tools to market their products.

Dropshipping VS Ecommerce

Let’s analyze the differences between dropshipping vs ecommerce:

1. Amount of Investment

2. Development

3. Cost of Maintenance

4. Product Quality

5. Customer Satisfaction

In A Nutshell

Dropshipping and ecommerce businesses have a lot of advantages and similarities. Both of these business models can be profitable as online businesses but they operate in a different way. In order to choose the ideal one to start with, you have to evaluate your business goals, its long-term needs, and your financial capabilities.