Category: Logistics

To start your own e-commerce business, you need to manufacture/buy original products, store them in your warehouse, list them on your website, host your website, integrate a payment gateway, manage customer care, handle the marketing to ensure traffic, and provide shipping. 

Seems like a lot to handle? We can understand. 

But what if you can simply manage the hosting, marketing, and payments and still reap all the benefits of an e-commerce website?  

Indeed you can with the dropshipping business model! 

Dropshipping is an e-commerce business model that has gained massive popularity over the years. It basically involves hosting a website with products listed on it and not worrying about the rest. All it requires you to do is to make a platform that the customers can visit – similar to a display tile. Once a customer places an order, a dropshipper simply processes it and sends the request to the third-party manufacturer. Then it becomes the manufacturer’s responsibility to ship the product safely to the customer. 

And the best part is that the dropshipping business model doesn’t require you to have a large warehouse. All you need is a tie-up with a seller/manufacturer and they will deal with the shipping. 

Some other benefits of starting your online dropshipping business in India include investing minimal capital, the freedom to run it from anywhere in the world, the freedom from maintaining an inventory or renting a warehouse, no shipping hassle, the flexibility of adding/removing products based on performance, and the ease of starting a dropshipping business in the first place.  

Steps required to start a Dropshipping business

Decide on what to sell 

In a competitive world, finding your niche can get tough. Especially after the pandemic, people’s love for online shopping has made e-commerce skyrocket. What started off as books being sold by Indian player Flipkart, grew into a multi-million dollar business of selling everything under the sun.

Not only marketplaces like Amazon and Flipkart, but businesses have also started making their own e-commerce websites. Therefore, before you decide to make a website, do your research and due diligence to search for unique products that will set you apart. 

Partner with a seller/manufacturer 

To get your website running, you need good products in the first place. And to do so, you need to secure your supplier after careful consideration. Check proposals from multiple manufacturers/sellers. Calculate the cost of their products, estimated shipping charges, packing charges, etc. before finalizing one because it will affect your profit margins. Remember that in a dropshipping business, the profits are split two ways. The first part is for you and the second for the manufacturer/seller. 

Nowadays with the popularity of e-commerce, many businesses are wishing to go online but can’t handle the hassle of operating an e-commerce website. In such cases, it is advised to bring your inclination of running a website and their desire to get their own platform together. It is best to partner with them and become the owner of a successful dropshipping business. 

Make your E-commerce website 

After securing your product supplier, get your e-commerce website up and running. Choose between open-source codes, headless e-commerce, and ready-to-use SaaS (software as a service) to make your website. A low-budget and hassle-free option is Shopify – a SaaS provider that enables you to make, host, and operate your e-commerce website with pre-integrated plug-ins. It’s like a plug and play system where you can make your website within minutes. 

Marketing all the way

This is where your salesman of the year skills need to come out and shine to make your dropshipping business a super success! But don’t worry, you won’t have to go door to door. The internet has much more than e-commerce websites. With search engines and social media, you have easy and effective access to not just a local but national and international pool of customers.

Opt for search engine optimization services to get your website ranking on Google’s first page where users are most likely to click and convert. Define your target audience and run ads on social media platforms like Facebook and Instagram to increase visibility and encourage buying. To put it simply, it’s like having your shop window displays but online. While this is just the tip of the iceberg, there is a lot to explore in the realm of digital marketing. 

Tips for successful dropshipping business

Find unique products

Dropshipping has been around for a while now. It’s an overused business model but definitely very profitable when done right. To give you an example, take a look at some of the well-known skincare brands. They started off by listing their products on e-commerce giant Nykaa. Then they started making their own online stores too.

So for you to decide to sell those same skincare brands will be a rookie mistake since you will be competing with the brand within itself as well as its competitors. It is recommended that you partner with a business that is original, authentic, or at least brand new. 

Find hassle-free products

While finding unique products, don’t chase something that is going to be a logistical problem. Something too big, too fragile, or too easily perishable will not only limit your delivery radius and customer base but also not be very profitable. Also, it involves high-risk as its chances of getting damaged are high. Go for products that can be stored for quite some time since initially, your website will take time to pick up. You can always go for food items also provided your manufacturer/supplier has adequate cold storage solutions in place. It is ideal if your products involve minimal packaging, and fewer shipping costs to increase your profit margins. 

Find reliable suppliers

Dropshipping is based on trust. Since you are not manufacturing the products or let alone storing them, you need a supplier that is dependable. A delay in their production will be seen by your customers as of late delivery or bad customer service. Make sure your suppliers provide quality products at all times to avoid unnecessary returns from your customers. 

Starting a dropshipping business in India is easier than it looks. Take a good look at our tips and get started with your own venture today! 

FAQs

Is dropshipping a profitable business in 2021?

Yes. Dropshipping business model is most certainly profitable provided you make a user-friendly e-commerce website, find a reliable supplier/manufacturer, and have a good marketing strategy. 

Can dropshipping start with no money?

No, but you can still consider it. While every business involves some capital, dropshipping business model relatively requires minimal investment. With SaaS solutions like Shopify, making your e-commerce website is easier than ever. Even your marketing budget can be low since you can clearly define your audience and target only them on social media. More so, creating a social media page is free. There is no manufacturing and shipping cost. So the capital required isn’t that high. 

Is dropshipping an online business?

Yes. Dropshipping is an online business model. The very basics of dropshipping involve you making your own e-commerce website which is the online version of a brick-and-mortar retail store. Even your customers are acquired online, and in most cases so is the payment processing as well. 

Which is the most successful product for dropshipping?

Hassle-free, nuisance-free, and easy to ship products are hot sellers among dropshipping platforms. Anything in the lifestyle and beautiful space that has a longer shelf life and easy storage solutions is ideal to sell. For eg: Books, clothes, bags, stationery, etc. 

The e-Commerce space has never been so elastic and broader before. Addressing the recent upsurge in global business, technological advancement and the people following online shopping, the digital space has opened flexible ways to put up your e-commerce revenue model in the array and reach out to your audience much more easily. 

It has been just 25 years that the internet has brought the entire marketplace to your fingertips. This has forged a branched path for eCommerce allowing people to come up with different businesses over the internet that are categorized into wider aspects. But before we jump into our classification of eCommerce business models, let’s refurbish our definition of eCommerce business.

What is an eCommerce business?

In simple terms, eCommerce or electronic commerce business refers to selling, buying or making a transaction over the internet in the digital marketplace. The products or services are showcased through a website or mobile application through digital signage systems that are integrated with a secured payment gateway facilitating product purchase and financial transactions. 

Understanding e-commerce revenue streams is essential, as they provide the foundation for any e-commerce revenue model by outlining how income is generated. A well-designed e-commerce revenue model leverages various e-commerce revenue streams like direct sales, subscriptions, and advertising to ensure sustainable growth.

In the competitive world of online business, focusing on diverse e-commerce revenue streams can enhance a company’s resilience. Each e-commerce revenue model can benefit from exploring different e-commerce revenue streams to optimize profitability and meet market demands.

Now let’s move ahead with segregating the eCommerce business models based on their revenue model. 

The revenue models in e-commerce are usually considered in classifying an eCommerce business as revenues denote the total amount of money that is being received by the company after trading its products or service with its customers. Understanding the various revenue models in e commerce is crucial for success. There is a range of options from which revenues can be generated including advertising, affiliate marketing, subscription and a lot more. 

The industry never restricts the upcoming of any new way of generating revenue. Though we will stick to explaining the basic five revenue models in e commerce with possible variations to the approach.

The choice of examples of e commerce business models depends on various factors, including the target market, product or service offerings, and business goals.

Also read: The Concept of E-commerce Business Model

Advertising Revenue Model

Generally, there is always a commission charged to advertisers to put up their advertisements in a well known online marketing platform. This is the classic principle that is being followed for the business categorized for the Advertising Revenue model. They take advantage of the huge traffic who regularly visit the chosen platform to shop around, see the ad and get redirected to the actual site. 

This can be related to a way of increasing leads to the business. The payments are made to the hosting platform based on a fixed commission or decided upon the traffic density that is driven to the business.

Business following the Advertising Revenue Model presents an indirect way of earning revenue through a digital platform and the conventional ways of putting up ads generally include display marketing that includes a super banner, wallpaper, skyscraper or rectangular ads. These are paid according to the traffic that is driven from the platform through the ads. The general income structure is based on the invoices raised against Cost per Click (CPC) or Cost per Action (CPA). Apart from the regular display marketing strategies that are aimed to redirect the traffic coming onto the eCommerce platform into the address where the ads are linked, affiliate marketing and search engine marketing are other famous ways.

Google Adwords and Adsense are among the most trending and reliable options that allow you to place your ads through the Google Search engine allowing you to bring your business website to the top of the search results when searched with the related keywords. Similar platforms are Facebook and the New York Times that allows you to display ads based on a Cost Per Mile (CPM) basis.

Subscription Revenue Model

You must have heard of Netflix, Amazon Prime, YouTube Premium, etc who will let you enjoy their unlimited services. These eCommerce business models charge their users or rathers subscribers based on a certain interval of time (daily, monthly or annual) to avail their services.

The service offerings of these companies generally include music, videos, TV channels, magazines, special services, etc. which is offered to the subscribers for a price to watch/listen or get the latest edition. Now, let me guide you through some examples of basic subscription business models.

• Premium membership:  Many social media and business platforms like Xing, Linkedin, stayfriends, etc. offers subscriptions to avail of additional services that get the subscribers to access to daily updates, newsletters, short notices, etc. These information and quick updates are delivered to them directly to their account.
• Internet service providers: We all are familiar with the monthly and annual subscription of internet service providers or rather a broadband connection enabling the subscribers to enjoy unlimited internet service. 

Publishers and content services: You are well acquainted with Netflix, New York Times, Spiegel Online, etc. These eCommerce business models ask for subscription fees based on monthly or annually to get access to their content.

We all know that every eCommerce business has one thing in common and that is their payment gateway. These are companies like Paypal, VeriSign whose subscription fee depends upon the SSL certification and the period of service. 

Transaction Fee Revenue Model

Following the transaction fee revenue model, the eCommerce business charges a fee to a seller for every transaction made through them. They are the payment companies that provide the payment gateway service to other eCommerce business platforms. Generally, the profit is derived through enabling or executing transactions. 

The operator provides a platform for the eCommerce marketplace through which the transaction can be completed. Now, the necessary steps include registering of the vendor and the operator so that the identities are kept intact that may later be required for a business. The model has proximity to the affiliate market but is somewhat different. The core principle of a Transaction Revenue Model is to facilitate transactions and earn a commission or fee on each one.

To explain it in a better way, let’s take the example of PayPal. The company charges a transaction fee to the sellers of the product once the transaction is completed. Similarly, eTrade gains a transaction fee whenever a stock transaction is made with a customer. The amount to be paid to the operator is either decided upon based on a percentage or a fixed amount with the vendor. Amazon is another example of a transaction fee revenue business model.

Sales Revenue Model

This is one of the most commonly followed eCommerce business models where wholesalers and retailers sell their products over the internet intending to reach out to a larger target audience. Also, more importantly, this sales revenue model in e-commerce brings inconvenience for the customer as well as saves them time. And the hassle to walk up to their physical store. There is an extra cost. 

The prices are often competitive in comparison to the actual store price.  The business following the online sales revenue model often comes with marketplaces as common entry points that allow them to deal with various product vendors allowing them to grow the marketplace and therefore earn more.

In certain cases, the sales are directly injected into the business where the profit is shared with none. Based on the size of the business and the point of sales traffic, certain functionalities of the business are transferred to third party vendors, generally done for the logistics and supply chain. 

Examples can be sited in terms of all the single shop companies selling their brand products over the internet through their online platforms. This forms a dedicated way of doing sales and reaching out to a vast number of customers. Amazon, Otto, etc are examples of businesses following such a model for their web catalogue-based business over the internet. Also, Buy.com and Etsy are examples of such marketplaces while blood, woot! guut.de are examples of live shopping marketplaces.

Affiliate Revenue Model

Next, on the list, we have an affiliate revenue model that deals with a business that follows the principle of commission. Merchants and vendors partner up with well-known eCommerce platforms to advertise and sell their products giving them a percentage of the profit as a commission. 

Affiliate marketing is a well-known way of inviting as well as driving quality leads into their business. The process basically works as a link that is hyperlinked to the affiliate and is archived on a host platform that gets regular traffic. Any user who clicks to the affiliate link is redirected to their website where the product or service is catalogued. The affiliate or the merchant thus pays an agreed commission to the host operator who’s carrying the link for every traffic driven.

Also Read: Everything You Need to Know About B2B Business Models

Amazon and affiliate are well-known examples of Affiliate Revenue Models that let you affiliate your product links and drive traffic. For each lead driven to your website, you need to pay a certain percentage to Amazon or affilinet as their commission. Interestingly, the Affiliate Revenue Model brings a win-win situation for both the merchant, who sells his product and the affiliate who advertised or marketed their product. Such eCommerce business models utilizes different variations such as pay-per-click, banner exchange and also, revenue sharing programs that aim at driving the audience from one platform to another.

There are a lot of other business models that are being used today to gain profit from the online marketplace. However, it’s natural that eCommerce business and digital marketing go hand in hand while delivering the business objective. Today there is an estimated rise of 17% in the eCommerce business since last year and has the potential to grow sky high in the coming years. 

Conclusion

Though shopping around physically hasn’t yet gone out of trend, most businesses today find a way to rule both the physical and online marketplace. So, there is always a scope for defining a new way of doing business over the internet. This means, more business models are yet to be known for the online eCommerce market.

To grow your business online the most impressive steps that you can take is an ecommerce shipping strategy. Brand differentiation can also be one of the efficient points of shipping.

Ecommerce business is dependent more on logistics for undamaged and time to time delivery of products to the customer. Operating with a third party courier partner can help make shipping easier. For improved ecommerce customer satisfaction, shipping should be the key point to unanimity. Ecommerce shipping can be affordable and easy to manage with the right assistance. There should be a perfect list of doing and don’ts for ecommerce shipping solutions in India.

Ecommerce Shipping Best Practices

Free shipping discounts

Free shipping does not mean entirely free but waves off some amount as a discount. Thanks to companies like Amazon that offer free shipping to their consumers, but they have matured statistics to back it up also. Online shopping is abandoned because of high-cost shipping rates. So in order to meet the profitability of the retailer, companies like Amazon have adopted free shipping orders to customers who shop for more than one product. So this encourages the customer to shop more and spend more time on your website. In fact, the free shipping option can boost order quantity to 30%.

Shipping costs to be cleared before checkout.

It’s always a compulsion to make your shipping cost obvious at checkout. Shipping fees are added as subtotal after the customer enters their Pin Code. Customers enjoy shopping but unnecessary expenditure at the end of checkout makes them abandon their cart. Some abandoned carts are due to High Shipping Costs at the checkout.

Confirm customers with an Estimate Delivery date

While completing the checkout we provide the customer estimated delivery date. A large number of people say that shipping time is an important factor while purchasing. A general estimation of delivery should be given not necessarily by a perfect date but this can make the customer less likely to abandon their cart.

Always keep your customers updated during the shipping

 So when your customer is satisfied with the order they received by taking advantage of free shipping. Keeping a connection of communication with your consumer is always a good idea. This can help you gain a positive review about their experience of shopping with your company. Always try to keep them updated and track of their order to shipment till their final destination. This will build trust in your customer and would also help them in shopping with your company.

Take immediate action and act responsibly if a shipping problem is reported.

Always remember loss and damage of a shipment could be a  problem at times due to a third party courier, but take immediate action responsibly to solve the issue of your customer. This means you are the prime person to help your customer.

Firstly check on the shipment details and information that is correctly entered. Contact the third party carrier and try to track the details and resolve the issue by giving an immediate replacement to the customer as soon as possible. Customer satisfaction is your first priority by a replacement and then get compensation for your lost shipment from your package carrier.

Ecommerce Shipping Strategy Goals

Ecommerce shipping is dominant discrimination for your brand. This requires support and coordination from the entire team. There are few strategy goals to keep in mind before you proceed with it furthermore.

• Boost conversions.
• Hike the average value of the order.
• widen the market or spot your audience.
• Decline the costs.
• revamp operational skills.

Important steps to consider before Ecommerce Shipping 

Be Clear with Your Order Fulfillment and Return Policies

Customer satisfaction is on three steps: receiving, processing and shipping. An order is only cleared when a customer receives it according to their specifications.

Flat Rate Shipping

There are different categories of shipping, but flat rate shipping is based on the size of the box. Different courier companies have a variety of flat-rate shipping programs.

Table Rate Shipping

In this concept, the shop manager amends shipping and shipment fees is calculated according to rule-based methods.

Live Shipping Rates from a Carrier

The rates are calculated on a basis of real-time rates and few shipping carriers use different apps to calculate these rates.

Utilize Shipping Tools

Shipping products are protected by packing them in a heavy box to bubble wrapping for having a flawless delivery.

Packaging

Packaging before shipment constitutes various processes like enclosing and protecting a product from damage to labelling it and ends with transporting it safely.

International Shipping

International shipping is basically shipping from India that actually works on the time of delivery on location.

Top Ecommerce Shipping features

Shipping is one such factor in ecommerce platforms that can bring a hole in your pocket. Choose smartly and rightly the opportunities that you have to identify your needs for shipping. To save money and to help your customers with their needs try choosing a perfect shipping company for your ecommerce and there are few requirements that you need to keep in mind while doing it.

Prioritize customer satisfaction

Always try to prioritize time in making a checklist according to customers requirements. Look for shipping instructions that can also make your audit work go easy. A robust reporting tool can help you lessen your burden of audit needs by tracking a correct record and by solving issues.

Merging of load

Merging of load can help you by providing cost-cutting to shipping your orders in ships or trucks. Timeframes and locations are managed in a full truck and a single ship to secure the low cost on each package from your carriers. You can support inventory to different satellite locations also by merging loads. Some 3D trailers can also extend support by maximizing space in rigs to bring more sense to your business.

Endless cost trackers

The best carrier can be chosen by making endless cost tracking and by making a note of its delivery speed. Choose the best factors that can sort issues on weight, delivery destinations and the volume of the product. These trackers can help you find solutions for saving new opportunities on carrier performances and on its measures.

Cross-docking

Cross-docking can help you store goods according to inventory locations. This can also help you in saving time and energy when you have ample orders. This method helps you in supplying goods more fastly and quickly to their final destinations.

Smart trademark and innovation

Make a vast note of goods that you receive from manufacturers and that’s not the end of data that your customer would be needing. There would be a lot more on your customers’ expectations. Manufacturer inventory should have all the track details of labels and barcodes of your goods. This can enable you to break down goods into smaller portions and can also help in filling the information of your customer in your system. So that it can help you in future endeavours with your customer requirements for operational or regulatory meet.

Rationalized dashboards

The best innovative way to progress with your shipping strategies is to present them in a proper way. Rationalized dashboards can help you in presenting it in a better way by being precise and right to content with adequate knowledge about it. Be part of the selection process and present it in an innovative way by being a successful leader giving a guarantee over things.

Multiple cheapest shipping partners in India

Most ecommerce companies in India consider FedEx as the best courier service for ecommerce platforms. The only problem with FedEx is that it does not cover every nook and corner of the world for ecommerce delivery. Other than that the company has positive reviews for its pick up and delivery services and also has a collection of international shipping options for its sellers to select.

DTDC has a broad network of shipping business in the time past of 1990 in all over India and has spread across the world over 220 countries. The small-term ecommerce business cannot fit in with DTDC due to its pricey features.

Ecom Express is a beginner in this shipping market but is considered for both shipping and logistics services. They have really good policies in terms of delivery and returns. As the service quality and response time is standard, the rates are also at low cost with efficiency.

Blue Dart is also popularly known for its services like shipping and logistics within the country that gives an option of the bargain to the high prices that is offered. The customer satisfaction rate is also highly commendable with this courier service.

Delhivery is another company on the list that is quite new to meet the shipping requirements of the ecommerce shipping platforms. The delivery services offered are reliable and are growing rapidly these days.

DHL is one such courier service in the list that is growing steadily nationwide to accept any needs of an ecommerce platform. DHL has a branch that is completely known for its ecommerce platform. This courier service helps in issues related to clearing customs. As compared with other courier companies DHL has high courier charges in India.

India Post Service is the most generous amongst every other courier company on the list. They are best when it comes to rates and for sending the delivery to the remotest location.

First Flight is slightly progressing its rank in the list and has become the best competitor also by spreading everywhere in the nation with affordable ecommerce shipping rates. They have tried to expand over 220 countries and have 10 offices across the world.

Not so old but not new, GoJavas is also one of the courier companies that provides ecommerce shipping. Earlier GoJavas used to provide their limited services to Jabong but now they even help to reach different ecommerce platforms also. The shipping rates and their services are dependable on delivery and as well as on pickup points.

Conclusion

Different challenges are the rare concern of business nature. Ecommerce business sellers undeniably have a greater challenge in terms of shipping. Shipping has a division of inventory across their destinations and costs and time in transit.

Building and working according to customer satisfaction can ultimately pay off many of your business shipping strategies. Patience is one such approach that can bring prosperity to your ecommerce shipping company. 

Hope you’re happy to have more profound information about ecommerce shipping sites in India. For improved sales on your store approach for a quick and easy shipping courier partner at your convenience.