2021 is undoubtedly the right year to open an ecommerce site. In this article I will explain how to move to start a successful online business by discovering the Dropshipping model.
You can open an ecommerce site with a low budget and even if you don’t own a warehouse.
In this step by step guide, I will try to answer all your doubts and give you all the useful information to start a successful ecommerce. We will see together the following points:
What is an e-commerce
How does it work
What is Dropshipping
Pros and cons of opening a dropshipping ecommerce site
Amazon FBA vs Dropshipping
Do I need a VAT number to open an ecommerce site?
How much money do you need to get started and where to open it
What is an e-commerce and what it takes to open an e-commerce
E-commerce is simply a form of trading and selling goods or services that is done over the Internet. If you run a store in real life, you can use ecommerce to expand your business.
If you’ve never owned a shop, but want to open one, this is the opportunity you’ve been waiting for. Therefore. in summary, an e-commerce is nothing more than a virtual store.
How an ecommerce works
As I told you, if you already own a shop you can use an ecommerce to expand your business and sell your products overseas. If, on the other hand, you are starting from scratch and do not have a large budget, you can still open an ecommerce site by selling the products of other companies with the Dropshipping method.
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What is Dropshipping?
Dropshipping is a real business model , which provides as the only initial investment the cost of creating the site to be used for internet sales.
I’ll explain better …
You just have to choose what you want to sell, select your products and place them in your shop at a higher price.
Once you have received your order, all you have to do is process it and the company you started working with will ship it directly to your customer. Opening a Dropshipping ecommerce site is definitely what I recommend to get started. Let’s see why …
Pros and cons of opening a dropshipping ecommerce site
Let’s clarify one thing right away: every business has pros and cons. This means that whatever business you decide to undertake will have something that is good and something that is not.
However, before starting an ecommerce site, it is certainly useful to evaluate all aspects, and that is why I will now analyze with you some Pros and Cons.
Pros of Dropshipping
- Very low start-up costs: Starting a dropshipping ecommerce site by choosing Shopify costs you only $ 29 per month (Shopify subscription cost). While for the creation of a base store, “one-product”, you will pay approximately 50/100 euros.
- You DO NOT have to have a product: Another point in favor for those starting from scratch and especially for those who choose Dropshipping as a business model, is the fact that you will not need a warehouse. As mentioned before, you will only have to take care of choosing the products and inserting them into your e-commerce (your store on Shopify).
- You can sell from and anywhere in the world: With this sales system, called Dropshipping, you can start your products from anywhere in the world and get them wherever you want. This allows you to expand your sales possibilities to a much larger market and consequently the profits will be much higher than in a physical store.
Cons of Dropshipping
- Cost of advertising: The cons (but not so much cons) is certainly the cost of advertising on Facebook. Why isn’t it so bad? Because, for example, with 20 euros of well-done advertising, you have the opportunity to sell many products and collect much more than what you spent.
- Managing Orders and Refunds: Whenever you receive an order or need to make a refund, you will need to contact the company you work with. For many people this can be too stressful, but considering what you can earn from Dropshipping I don’t think so. In addition, there are more and more software that allow you to send products automatically to the end customer.
- You have to know how to do advertising: Knowing how to do advertising is essential. If you can’t, though, that’s not a problem. In fact, you can easily pay someone to do this task. However, I advise you to study both Facebook Ads and Google Ads, in order to have more skills that you can put on your resume.
Amazon Fba vs Dropshipping
Surely you have heard of Amazon Fba and maybe you even gave us a little thought.
I want to show you what the differences are between these two businesses and why in my opinion dropshipping is the most valid business at the moment.
- Amazon keeps customers: Amazon doesn’t allow you to dropship and beyond that, it doesn’t allow you to communicate with your customers. This harms you and doesn’t help you grow. Also, to sell with Amazon, you need to have your own warehouse and above all a much higher budget to get started.
- Price drop war: With Amazon FBA you will have to clash with many sellers and in order to sell something you will probably be forced to lower your prices too much.
- Competition for the first page: Whoever manages to sell more is placed on the first page, but as I said before, this is really difficult given the huge turnout of sellers on the platform. So it will be Amazon, according to its rules, to decide who deserves the place on the podium.
- Your brand takes a back seat: With your Dropshipping shop you have the opportunity to stand out and above all to create a brand. People will start to get to know you, to love what you sell, and will always continue to buy from you. With Amazon this is impossible because you will be just one of many sellers and people will buy what is cheaper or what Amazon chooses to show.
- Zero scalability: When Amazon notices that your product is selling a lot, it acts incorrectly. Like? Start selling your own product at a lower cost by deciding to show it on the front page. As you can well understand, this will not allow you to grow and will kill you in no time.
Do I need a VAT number to open an ecommerce site?
If you want to sell online, you must have one. There are few cases in which this is not required and they all have to do with the occasional nature of the sale. You will realize that since it is an online store 24 hours a day, we certainly cannot speak of “occasionality”.
However, there are many people who, RISKING, start operating without a VAT number and only open after generating some sales.
In Italy the e-commerce sector is regulated by the Bersani Decree (Legislative Decree 114/98) which, with Art. 21, puts online sales on an equal footing with other forms of “distance selling”.
How much money do you need to start a Dropshipping store and where to open it?
At the moment the platform that I recommend to start this business is Shopify.
Shopify has a base monthly (subscription) cost of $ 29. Another cost to add is that for the creation of the store, as long as you do not want to create it yourself (which I do not recommend if you have no experience).
A developer can ask you around € 50 / € 100 for a basic store (“one product”). This is also the amount I ask for to create a basic store, but with a professional setting, on Shopify.
To these costs you must add the cost for opening your VAT number and about € 150 to start promoting your first products online.
Should you open an ecommerce site?
In my experience and that of many others who operate in this sector, it is certainly a business that can give a lot of satisfaction. So yeah, I think opening an ecommerce site right now is an opportunity you don’t want to miss.
Conclusion
I hope this article has been useful to you.
