The many facets of the e-commerce industry give birth to new business models: Drop shipping, Print on demand, Warehousing and Fulfillment.
India saw a catapulting growth in the e-commerce sector in the last decade and the reasons behind this are many. The value of e-commerce industry is expected to touch the 200 billion dollars mark by 2026.
An upward growth is predicted for Indian e-commerce industry which will surpass the US by becoming the 2nd largest e-commerce market in the world by 2034.
The sector has already established its success by allowing industry tycoons to build vast empires and experiment with consolidation. E-commerce is now seen as a long term business plan rather than an emerging market because the world has moved to digital.
Your products/services are easily accessible, available and convenient to purchase because the customer is ordering while sitting at home. You are providing the customers with maximum delight by bringing everything at their fingertips.
If you are someone who is looking to set foot in the e-commerce industry, it can be very intimidating considering the level of competition and the unfamiliarity of the digital space. But, there is not much to worry because along with difficulty of creating brand awareness, e-commerce gives you a million options on how to go about your business.
Let’s read about them.
Why Drop shipping?model that works without an inventory. There are 3 parties involved: Seller, Buyer and Drop shipping Company. The seller owns an online store from where customers place an order. Once the order is placed, the seller buys this product from the drop shipping company which makes the product and delivers it to the end customer. The package can or cannot be in the name of the original seller.
Seller gets an order for a product
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Seller buys product from the dropshipping company
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Drop shipping company delivers the product
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Customer gets the product with original seller name (optional)
Most businesses have to use up huge amounts of their funds for the initial investment of space and inventory, but with dropshipping you are saving on that cost. It is cost-effective and easier to manage for new companies.
You will be able to afford a wider range of products and services since they will be outsourced from a company that already makes them. The risk level in dropshipping is minimal in comparison to other business models.
You have less control over the operation of the business since you are dependent on the third party to make products for you. There is definitely a profit but you need to decide the margins very intelligently so that you don’t shoo your customers always.
Another problem is that if the demand increases and your drop shipping supplier isn’t able to supply the products to your customers on time, it questions the efficiency of your business.
You can read extensively about the pros and cons of Drop shipping here.
The term is quite self explanatory. Print on Demand is when the designs are printed only when orders come in.
Just like drop shipping, there is no need to keep a stock in place because even the products are bought based on the demand quantity.
Customer places an order
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Printing is done
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Shipped to customer
Understanding Warehousing and Fulfillment
Your inventory is stored at your warehouse or your partner’s warehouse from where all the orders you receive will get fulfilled. This means that this business model is third party logistics but it can be done individually too.
Seller receives order
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Partner packages inventory from warehouse
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Order is shipped to end customer
The Drawback
Drop shipping
Since you are just starting out, it will be an ideal choice to choose a model that will not eat up much of your capital investment. You will have more freedom to experiment and manage your expenses. You can fix your own profit margins if you market your brand well.
Print on Demand
It is similar to drop shipping so it would also be a good option to consider when you are beginning with your business model dimensions. There will be no excess inventory lying in your storage space. Even though the profit margin is less, you can ensure that you don’t bring upon yourself a huge loss.
Warehousing and Fulfillment
You already have a lot of orders coming your way and warehousing would be a great option to deliver products on time. It helps you divide the delivery operation and regular business operation into different segments so there is equal attention on both. You just have to be careful about your reliance on a third party logistics partner.
Printrove is a combination of Drop shipping and Print on Demand model. We have a variety of products that are printed upon when there is an order placed on our seller’s store. Once the printing is done, we package the product and deliver it to the end customer under the brand name of the seller.
Seller gets an order
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Seller informs Printrove
(Printrove offers integration with Shopify and Woocommerce store to make the order placing process quick and easy)
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Design is printed on the product at Printrove
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Your Brand Packaging is also done
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Printrove’s Delivery partners deliver to the end customer
To find out more, you can visit our website. To start a dropshipping business, read this.
Let us know if this post has helped clarify the concepts of drop shipping, print on demand, warehousing and fulfillment for you in the comments section below. Also, if you need any help making a decision, we are here.