You’ve been bitten by the dropshipping bug! If you’ve already chosen a niche and set your mind on the products you want to sell, all that is left is to get a good platform to sell them. Simply put, a dropshipping platform is used to sell products or services online through an online sales portal.
Choosing the right dropshipping platform plays a key role in the success of your business. You have two choices - you can either self-host a store (build a website from scratch) or set up a store on a well-established dropshipping platform or marketplace.
Before you read up on either type and choose one, here’s some commonly followed advice: it’s good to choose a platform type based on what you’re selling. In the end, it all boils down to how much technical expertise and funds you have, and how wide your product range is.
In this article, we will walk you through the different types of drop shipping platforms, and the factors to evaluate before you pick the right dropshipping platform for your business.
Types of dropshipping platforms
a. Selling on online marketplaces like Amazon and eBay
Dropshippers choose to sell their products on these marketplaces because they make it effortless to run a business. All you have to do is set up an account, add your products, and start selling them. Since these marketplaces have good traffic already, bringing in customers shouldn’t be a problem.
It’s simple and easy, but there are certain downsides to this option. For starters, you will have limited control over your business and you cannot customize it to your liking. The marketplace you choose could lack essential features like shipment tracking, fulfilment monitoring, or website integration. Or it may limit the number of products you can offer.
If you’re restricted from customizing, then your branding will also take a hit. For example, if you are selling through Amazon, and customers love your products, they are more likely to tell others that they bought it from Amazon since they will be seeing the Amazon storefront instead of your store.
You will need a good pricing strategy to handle the competition. Since there are several other sellers in Amazon, you will have cut-throat competition to handle. Also, a percentage of your sale will be charged as fee by the marketplace which could be around 10-15% of the order’s value.
b. Creating your own website
The best part of having your own store is the personal branding. Unlike selling on Amazon and eBay, if a customer buys from your website, they will mention your brand name or store name when they refer your products to their peers.
Having your own store also makes the competition bearable. Since you don’t have similar dropshippers selling their wares on the same platform, you can sell your products at better prices.
One limitation of having your own store is the amount of time and effort you have to invest in coming up with marketing strategies to bring in traffic to your website. You’ll need to create robust marketing plans and focus on SEO to help your website to rank highly in the search engine results.
If you prioritize customization over anything else, and you have a sizeable budget and good technical expertise, then self-hosted platforms are a good choice. If you’re building your own website, then you need to buy a domain name and hire designers and developers to create a store. This option is chosen by dropshippers who are in it for the long haul and treat their business seriously (no more “just a side hustle”).
You will have to spend on setting up your website which you will be hosting in your own servers. Though you would spend a sizeable amount on setting up your site, your profit margin would be higher since you wouldn’t have to pay a monthly amount or a part of the amount you’ve made from a sale as it is in the case of hosted platforms.
Down the lane, you will be manually setting up plugins and other integrations with self-hosted platforms. As for technical support, you can get help from online forums and support threads where like-minded dropshippers all over the world participate to help one another.
Hosted platforms are a good choice if you don’t have much technical expertise, but you’re willing to shell out money to set up your site. The platform is hosted by the providers in their servers and you would have to choose from one of their pricing plans. If you’re going to use platforms like Shopify and BigCommerce, you wouldn’t have to do everything from scratch. You can use their designs, themes and templates to customise your store.
If you’re stuck somewhere or need help, you will be provided excellent customer support via multiple channels like e-mail, chats, and calls.
The only downside to hosted platforms is that customisation is limited though they provide many plug-ins that are either pre-installed or can be installed on purchase.
Which one do I choose?
Take a look at your business objectives. If you want to set up a store with a few clicks and just sell products, then hosted platforms should be fine. However, if you want to own a website completely, write blogs, get customer reviews, and fully dive into dropshipping, try self-hosting your store. Just remember that you’ll have to do everything from scratch, including coding, designing, and buying a domain name.
Factors to evaluate when choosing a dropshipping platform
Here are some factors you should evaluate before choosing a dropshipping platform:
Ease of setting up a store
Dropshipping platforms usually walk you through the setting up process and assist you in every step. Check whether your dropshipping platform manages all the back-end processes and allows you to choose and add your domain name.
Ease of use for customers
Your website should be customer-friendly. That means a nice homepage, neatly categorized products, and your shipping and refund policies in the footer. Choose a platform that makes all of that possible.
Consider this - an ad shows up on your Instagram feed and the product is something you’ve been searching for. So you click on the ad, and you find yourself on a website that looks all fancy, but the products are not categorised. It looks like a clump of random products and after scrolling for 10 minutes, you finally find the product that showed up on your Instagram feed. Whew! We’re sure you’ve also seen websites where the homepage was a put-off and you didn’t really feel like probing much after one look at the homepage.
To avoid this, you can check out the websites of other dropshippers from your niche to get an idea of what a good website should look like, and then check whether the dropshipping platforms in your list offer the customizations and features you’ll need to set up a similar website.
Managing multiple suppliers
A dropshipping best practice is to have multiple suppliers or a back-up supplier to avoid out-of-stock scenarios. If you have multiple suppliers, then you need a platform that supports multi-vendor management. This involves factors like ensuring unique SKUs for products, ensuring the availability of the products, adding products from your suppliers’ sites to your store with a few clicks, and so on. Your dropshipping platform should be able to help you manage multiple vendors efficiently with a streamlined order fulfilment process.
Integrations and plugins
Your dropshipping platform should be compatible with integrations and have installed or pre-installed plugins. For multi-channel selling, you need integration with different sales channels to sell across marketplaces (like Amazon and eBay) and social media channels like Facebook, Instagram, and Pinterest. You will also need email integration and payment gateway integrations to run your business smoothly.
Dropshipping plugins are useful for tasks like importing products from your supplier’s list, checking your website’s analytics, and keeping track of the carts abandoned by your customers.
Your dropshipping platform should help with tracking customer payments and notify you when your recipients have paid you. Most dropshipping platforms provide these details on the dashboard to make matters easier for the business owner.
The platform should be compatible with payment gateway integrations, and you should be able to provide a variety of payment options to your customers such as card payments and bank transfers via ACH or SEPA. If you have an international customer base, choose payment gateways that can handle multiple currencies and currency conversion.
Here’s your takeaway!
- Make a mental note of your technical expertise at hand, funds available, and the size of your product range.
- Based on these factors (and other factors, if any) pick a suitable platform once you’ve gotten a good grasp of the different types of platforms and their distinctions.
- Now make a list of the popular dropshipping platforms that fall under the type you’ve selected.
- Evaluate these dropshipping platforms based on the 5 factors we’ve mentioned above before finally zeroing in one platform for your dropshipping venture.
- You’re good to go! Cheers!