For those who know, drop shipping is a great way to learn to do e-commerce by simply learning by doing. It’s also a great way to avoid risk when you find a niche to get started on. On the other hand, you can easily lose your advantage by the minute you are copied on a small scale or large scale if your community is not united, loyal and federated.
Why am I talking to you today?
As you know, I’m interested in the solutions that allow businesses to create business to hire and therefore create jobs.
So it’s important for me to share information that can eventually help companies that need to transform their models to make them more agile.
1 / Because I want to propose alternatives to companies that want to transform all or part of their model
2 / Because Drop shipping is an element that is sometimes used by Digital Native Vertical Brands in order not to have to manage inventory
3 / Because there are issues related to copying, the importance of developing a real brand if you are looking to build a real business and not just to make a move
Drop shipping Kesako ?
With the scandal about “false brands” to influence whose principle was based on “drop shipping”, the practice may be familiar to you?
In fact, at the end of November 2018, the painting spoke only of that: Emma Cake Cup and her companion apparently profited from their communities by creating false marks according to twitto @Doubleshit and whose journalist Anne Lods speaks in Glamor: “Both Influencers have successively made product placement for different items such as watches, mobile accessories, but also physical activity stimulators.
Returning their subscribers by a simple swipe on sites recently created for the occasion, Emma and Vlad have found the good vein: resell products of very low quality and bought less than 10 euros, at prices Pharaohs, while making believe in a reduction. Take the connected watch.
In the thread, on a screenshot, we see the accessory promo: 79,90 € instead of 429 €. Do not be fooled, this is a watch that we find between 9 and 12 € on the site AliExpress. If, again, the practice is questionable, it is in addition to a prank: the sites disappear once orders are placed, without knowing if the customers have received or will receive their purchase. On these sites there is also no siret number, or even legal mentions, in short, a scam. “
Beware, drop shipping is not bad in itself and many entrepreneurs use it for products of excellent quality. It allows many people to be able to create an activity complementary to their traditional income, or even to live only their activity drop shipping. In the case cited above, it is the manner in which this current practice has been exploited which has been noted as troublesome.
But, let’s get back to our sheep: Drop Shipping, Start it?
This practice is based on direct delivery between your community, the merchant who has an e-commerce site and its supplier. Often, the trader collaborates with actors like AliExpress or Amazon to handle shipping and stock. AliExpress or Amazon are sometimes themselves the holder of the stock in question and the trader pays a service to these actors and recovers a commission on sales made to his community.
How can this practice be interesting for bringing agility to companies?
It is always difficult to talk about commitment when talking about Alibaba or Amazon as their development has a certain impact on local economic players. However, from a logistical point of view, the nerve of war when have to distribute its products, the practice is interesting. Nevertheless, as I often say, it is very difficult to be perfect all along the value chain and in addition to create value by being competitive, creating local jobs and living your business.
To avoid “burn out” or “schizophrenia” related to the search for the “perfectly perfect” sustainable model, let’s focus on one impact at a time, and here we will talk about STOCK! Indeed, what I like in the drop shipping is that it is one answer among others, today to the problems of over-storage and management of its supply chain because it is about responding to a need rather than anticipating it at the risk of over-producing! Think partly in a more sustainable way so.
It is also, in my opinion, an excellent way for companies to limit risks when launching new products. In the case, for example, of a brand that wants to diversify, initially offer a product from a potential drop-shipping supplier before fully validating its new product as part of its offer and then collecting feedback from its community. on this test then makes it possible to carry out launches that are relevant and closer to reality since the “test” is not done on excel files, but “life size”.
It’s especially on a similar format that creative brands have been launching for almost 10 years now and sometimes launching every model of their brand in this format! This is the case of the Pérus brand, for example.
So, if whole companies are created on this model, simple launches within companies can also take place, no matter the size of it and imitate / integrate the drop shipping process internally on a part of their value chain, what do you think?
For my part, I think so, but it requires the release of several beliefs in companies, product managers and designers take their power, managers to revive organizations, and leaders reinvent models for all organizations rise.
It also requires a transformation of trades and therefore training on the subject, to review the supply chains; to work completely differently with its suppliers.
To transform what.
What are the advantages and disadvantages of drop shipping?
Il faut savoir qu’il y a plusieurs sortent de drop shipping :
- that practiced by large market places like Amazon, Alibaba, Etsy or Afrikrea
- the one made by a dealer X on a niche Y
- the one made for a specific occasion and temporarily as for holiday periods
- the one made by brands that are also called private label shipping or drop shipping in white label that we see more and more appear today and which attracted many brands today or suppliers who transform themselves
- no logistic costs because you do not have to manage the expeditions
- no inventory which avoids the money that sleeps 😉
- the working capital is always positive, which is an advantage when you start using this model
- suppliers may require a minimum order
- the terms of intermediaries like Amazon or AliExpess can be difficult to manage for small resellers
- stockouts that you do not control from the suppliers side can cause you problems then customers side
- the marketing costs are huge! The drop shipping is between 10% and 30% of your turnover, which only goes on online customer acquisition and the community is not really federated (except in the case of private label shipping or drop shipping in white label )
This last point brings me to my last point: value lies in brand development.
How can creating a brand enables to transform a drop shipping companiy or a regular supplier into a thriving businesses with a strong community today?
It is by talking with former manufacturers who launch their own brand and that I accompanied, as well as meeting Nathalie in the context of a coaching that I was able to confront this problem.
In the first case, the couple has been working in the textile industry for more than 15 years. Their specialized expertise is immeasurably rich. Their experience, a real gold mine to understand their market and especially their community. The couple wants to completely transform their business and to value their know-how, to create a brand.
Same thing for Nathalie, who is the founder of a niche she discovered and that she makes 100% drop shipping. She lives from her activity and did a month of December which for certain brand can be compared to the turnover of a whole year!
But when I asked Nathalie why she wanted my help, she told me she did not want to be dependent solely on her investments in digital marketing and wanted to unite her community with a majority of women. She wants a more human approach to things.
His challenge? Exit a model based on relatively high marketing costs and create a strong brand with a real community that is federated.
Pour conclure, je dirais comme souvent que la marque reste la valeur sure. C’est elle qui apporte de la valeur, de l’humanité et vous permet de communiquer avec votre communauté avec de l’authenticité et de la sincérité. C’est aussi elle qui permet de faire rêver et transmettre des valeurs, vos valeurs, tout en exprimant votre WHY.
- être surprenant
- être unique
- personnaliser son approche
- engager sa communauté et être engageant
Car on l’oublie trop souvent, mais une marque est souvent l’extension d’un message et de valeurs bien plus profondes qu’on ne le pense, et c’est l’émotion que l’on transmet qui touche si celle-ci est sincère. Un produit de bonne qualité aujourd’hui ne suffit plus car… “c’est la base“.