Question 1

What is dropshipping?

Accepted Answer

Dropshipping is an easy and affordable way to earn money that will suit both beginners and those looking to expand their businesses. Dropshipper does not need a warehouse, he does not need to freeze funds and invest them in goods. His business is to find a customer and transfer the order to the supplier (the manufacturer of the product, his dealers). The supplier is responsible for shipping, logistics, warranties, packaging and returns. The profit of a dropshipper is the margin (difference) between the supplier's price and the price at which the item was purchased in its store. After creating its online store, the seller is engaged in its promotion and advertising of the goods displayed in it.

Question 2

How does dropshipping differ from a simple partnership with an external supplier?

Accepted Answer

It is very difficult to find an honest and true partner. It is necessary to study the market well in order to make a deal, buy goods, establish sales with profit. Dropshipping differs from the usual partnership and mediation in that the supplier of the goods ships the sold goods directly to the buyer from their warehouse. The online store sells goods, receives money, orders from the supplier, transfers payment to him and sends the exact coordinates for the delivery of products.

Question 3

Agreement of the Parties

Accepted Answer

The legal relationship between the dropshipper and the buyer is formal. An agency order agreement may be concluded between them, according to which the store undertakes to purchase the goods necessary for the client. Partnerships with suppliers, the sale of goods on behalf, can also be formalized by advisory agency contracts. On behalf of the store, you can conclude a purchase agreement or commission with the buyer, while the supplier under the order agreement will deliver the goods, indicating the seller's online store in the sender's details.

Question 4

Partners in Dropshipping

Accepted Answer

Dropshipping is a low-risk business model. If you are just starting, then this is the perfect way to try your hand, study a new business, test your capabilities. Dropshipping could also be one of the options to scale the business. The profit of the dropshipper directly depends on the supplier of the product. If this is also an online store or an ordinary intermediary, then you should not count on big earnings. Such a partnership is needed, rather to expand the range and in order to increase the traffic of the site and attract as large a target audience as possible. It is most profitable to become a partner of large dealers and manufacturers of goods. They offer wholesale prices. Halla Systems will help you to start cooperation, find an inexpensive product, check certificates and product quality. A separate topic for the dropshipper may be working with marketplaces that offer products of different categories from different sellers.

Question 5

Dropshipping disadvantages

Accepted Answer

As in any business, dropshipping has its advantages and disadvantages. The main problem with which the online store may encounter when issuing already paid goods is its absence from the supplier's warehouse. It is difficult to clearly track the remains in someone else's warehouse, the number and correspondence of commodity articles. Especially if the assortment of the online store is constantly increasing, and contracts with new suppliers are constantly concluded. In case of short delivery, lack of goods in the warehouse, delivery of low-quality products, the online dropper store should clarify the situation, coordinate the exchange or return and, if possible, correct the situation and leave the client a good impression of himself. In the event of a long delivery of goods (from a month), there is a risk that the buyer will look for an online store in which he is available. Halla Systems specialists will prepare a marketing plan for your online store, calculate the conversion of the site and help optimize supply chains.

Question 6

The Benefits of Dropshipping

Accepted Answer

Dropshipper doesn't need start-up capital. It is easy to enter the business, without the cost of renting a warehouse and office. In order to start a business, it is enough for him to buy a domain and make a simple site. A little later, having studied the market and chosen a niche, you can create either your own online store or take advantage of existing online platforms and opportunities offered by marketplaces. In the future, the business is quite simple to expand, creating new sites and stores. Dropshipper is not afraid: seasonal fluctuations, falling demand, damage to goods, problems with payment delays. In the case of the lack of demand for the goods offered by the dropshipper's business, his loss is only the funds that he invested in the development of the online store, advertising and promotion. Dropshipping is beneficial for both novice entrepreneurs and those who want to expand their business and diversify their business. Halla Systems helps online retailers grow profits and find high margin items.

Contacts Halla Systems Co. Ltd Korea