Which is better: Dropshipping or Branded Experience for eCommerce Brands?
Is dropshipping just a get-rich-quick scheme?
We know that “swamplands in Florida” are a scam. And surely it is not merely a coincidence that Multi-level Marketing schemes (MLMs) are always shaped EXACTLY like a pyramid. But is Dropshipping also just a get-rich-quick scheme?
Not always: dropshipping companies can become reliable and convenient partners. You can work with a dropshipping company in order to grow your eCommerce, as they will help you expedite order and fulfillment processing.
However, as is the case whenever something becomes extremely popular, there are some people out there using “dropshipping courses” as a way to make a quick buck. Therefore, we recommend doing thorough research when looking for a dropshipping partner.
On the other hand, instead of dropshipping, you could choose to build your online business through a branded experience for your eCommerce store. Then you, yourself, can handle all the aspects that a dropshipping company would do for you.
Below, we give you some of the advantages and disadvantages of dropshipping, and how it compares to a branded eCommerce experience. Check it out, and decide what is best for you!
Dropshipping: Pros and Cons
The cirlce of (dropshipping) life
- Upfront costs are very small, or completely nonexistent. This is great news for those of us who don’t have a lot of capital to sink into a brand.
- You don’t have to worry about shipping or fulfillment at all. Your dropshipping partner already has those details worked out with the supplier, so you can focus on more important aspects of your business, like marketing.
- It’s very easy to expand your catalog. Since storage is typically covered by the dropshipping supplier, you can sell a broader collection of items to fit your niche demographic.
- Margins usually suck, unless you are selling super high-ticket items. Even if you decide to provide those high-ticket items, the quality will be outside of your control. In most cases, most of your stuff will be produced in China, which means that you are at the mercy of their (often poor) quality control, not to mention sudden shipping delays and irregularities.
- Brand recognition is super hard—there is a LOT of competition in dropshipping. If you have good marketing you might be able to stand out…for a little while. But it is a very crowded market out there, and it moves fast, so you will often be struggling to get eyeballs on your products. The name of the game here is to get profit through volume, but don’t expect a loyal following.
- Unless your warehouse is located in a premium spot (which you can’t afford) and is quite big (which you also can’t afford), then you probably won’t be competing with Amazon Prime (which would kick your ass even if you were to compete with them).
Branded eCommerce Experience: Pros and Cons
Pros: Everything is in YOUR control.... Cons: EVERYthing is in your control
- You control the prices and have better control over your profit margins.
- You control the quality. Getting your hands on products to do a QA check before it reaches your customer's hands is no small pro. To keep repeat customers and build brand loyalty, your products need to be consistent without fault.
- You control the shipping speed, and as we’ve discussed in past articles, shipping speed is everything. Sixty-two percent of shoppers say delivery speeds influence their purchasing decisions. And they’ve been conditioned to expect to receive their purchases in a matter of days.
- In most cases, you will have super high start-up costs. This is just how it goes when starting a business, and with you taking care of the whole chain, instead of outsourcing some things through dropshipping, the costs will add up fast.
- Most of the time, you will have excess inventory. There is no way to sugarcoat this one — excess inventory just plain SUCKS. And you will have a lot more of it to deal with if you decide to make your own branded eCommerce experience (luckily, we at Nice have ANSWERS for dealing with excess inventory).
- It takes a while to bring your idea to the market…especially if you are working with warehouses overseas. But good things come to those who wait, right? Though it is also true that the early bird gets the worm (hmmm, someone should have really checked all these old adages for inconsistencies…it feels like you can just look around until you find one that justifies whichever thing you have already decided to do).
Conclusion: Would we recommend dropshipping?
Imagine how much paper he could have sold with dropshipping...
Well, it depends. Dropshipping can not only save you money, but it will save you time and effort as well. However, there will be other costs to you, besides the strictly financial, if you go the dropshipping route. As the Mexican version of “you get what you pay for” goes: Buying cheap stuff is actually quite expensive.
Ultimately, dropshipping is a good way to get started on eCommerce, and if your main goal is just to “sell stuff online”, then going the dropshipping route will save you a LOT of headaches.
BUT—and this is a big-ass but—if you want to build a long-term brand, and generate relationships with your customers so you can develop a loyal following and get lots of repeat sales…then you should do a branded eCommerce experience (and call us, maybe?)
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