Last Updated on June 26, 2020
Is Dropshipping Profitable In India
Drop shipping is a mildly dangerous and extravagant company whose profitability depends strongly on your product type. You will be thriving if your product is niche and in high demand. If not, because you don’t have a ready inventory, the loss won’t be the same.
Drop shipping has worked wonders for many drop shippers coming to India and has also enhanced the customer experience over time. Let’s better comprehend this.
How is dropshipping going to work?
A business model without inventory, drop shipping has three stakeholders engaged in its process: the vendor, the end client and the shipping company.
A vendor is setting up an online store displaying the products. On this ecommerce page, a client navigates and discovers the item they are looking for.
The vendor tells the drop shipping business once the order has been placed. Then the dropshipping business is making the item, packaging it and delivering it to the end client.
The work is split between the vendor and the drop shipping firm under optimal conditions and excellent cooperation between them provides a nice experience to the client.
Drop shipping is certainly a lucrative company for many reasons when it comes to India. If it doesn’t work well, you may discover the reasons below for the same.
Reasons why Drop shipping works in India
Dropshipping is a hit idea and a lucrative one in India because the industry here offers so much scope for development and experimentation. Here are a few reasons why it operates:
- Cost-effective: drop shipping can assist save both original expenses and later expenses for fresh companies. It is a business model that is budget-friendly and easy-to-pocket that can push your company to new heights. This is a very useful choice for developing nations.
- Lowered risk: In drop shipping, the risk of loss is not as important as other businesses because there is no inventory remaining. Only when the demand occurs will a product be produced. This can be useful for Indian companies in not attracting enormous losses given the shipping expenses and also a lot of tax costs.
- Internet Penetration: Internet penetration has scaled a very large margin in India over the past decade, making online sales a very large deal. People use the internet on their phones, and the comfort caused them to order stuff online instead of buying them from brick-and-mortar stores.
- No Inventory hassle: there is no unnecessary headache to maintain the inventory and then aggressively market it to make sure it’s all sold. It relieves the selling pressure as you are not directly liable for manufacturing. India’s products and taxation costs are greater, so dropshipping provides the alternative where you can only generate as much as you can sell.
- Automated Functions: If you notice, dropshipping features can be readily automated, making it easy to focus on other company elements such as branding, advertising and company growth. Functions such as putting orders, monitoring orders, pricing, and performance review, promotions, advertisements, etc. can all be automated and do not require you to regularly handle them.
- Purchasing Power: Another significant growth in India is the rise in buying power owing to higher disposable revenue. People want to purchase more and know products around the globe that are popular. For instance-Have you imagined a closet complete of Manchester United merchandise a few years ago? People are now more specific and willing to spend.
- Niche Products Availability: In your own hands, bringing niche products to India is like the instance above. Electronics, goods, clothing, books and so on are becoming more valuable because this is precisely what individuals want. For instance, if you sell t-shirts with quotes from popular culture or give signed celebrity posters, it can make your company fly.
- Supplier Language Benefit: India for many reasons is a excellent nation, one of which is that we are a land that speaks various languages. English, one of our biggest strengths, enables us to interact with many nations, thereby expanding our market room. This leads to more delivery and buy choices throughout and beyond India.
- Location Independent: Because you don’t really need to have an office, you save on lease costs. If you are an internet vendor, the concept of’ Work from Home’ can be placed to use because all you need is a laptop and the correct company feeling.
Reasons Why Dropshipping Wouldn’t work
Despite the many benefits, if your drop shipping company based on ecommerce is not going well, then the reasons might be: high price of products and taxes can boost general expenses tremendously leading to a loss.
- Sometimes the shipping time may be more than usual due to insufficient transport or insufficient financing for lower channels of distribution.
- Because it’s a fresh idea, clients may be resistant to it and question the company’s legitimacy if someone else delivers it.
- Refunds and returns become a challenging job as the whole method has to reverse. It takes time and can attract a loss.
- The main reason why shipping fall is not working out may be the product’s quality. Even drop shipping has to offer some importance to clients like any company.
- If the website of the seller looks cluttered and the behavior is unprofessional, it could have a major impact on the customer experience. Improper coordination is also a display of unprofessional behavior between the vendor and the drop shipping company.
By identifying the correct drop shipper and finding a way to build a healthy coordination between you and your drop shipper, you can handle all these issues. Plan a healthy budget with the cost of shipping and taxation in mind so that you can still make a decent profit.
India is an increasing market and it could work wonders for you to start a drop shipping company. Just discover the correct niche and the shipping partner for the correct fall! Here’s how you can begin your company with dropshipping.