Ecommerce can refer to many different things, but for this article we’ll look at selling products in your store using dropshipping or print on demand (POD).
Unlike several other online marketing models, you may notice that there are many more young people involved in ecommerce. They have Shopify stores and run ads on Facebook for interesting products which are shipped from China using ePacket.
Some marketers prefer to create designs that they print on hats, t-shirts, bags, mugs, socks, etc. These unique products are produced by print on demand companies such as Custom Cat, Printify, Gear Bubble, etc.
So, the product is only produced and shipped when someone orders. This reduces the need for inventory and makes the entire process highly manageable for the marketer. All they need to focus on is coming up with creative designs and marketing.
The advantages and disadvantages of dropshipping
Dropshipping is a part of the ecommerce model and is highly popular among marketers because it almost seems like quick and easy money. There is a wide variety of products that are ready to sell and all you need to do is set up a store and create a winning ad that converts.
While it’s tricky, it’s still doable. However, dropshipping can be fraught with problems. If you use a supplier in China, there can be shipping delays or faulty products. Customer support can be a hassle. You’ll also need to find a reliable supplier in China, which in itself can be a Herculean task.
In the long run, using a supplier in the US might cause fewer headaches and focusing on print on demand will probably be a better option.
Common problems you’ll encounter
One common problem that many marketers using dropshipping face – PayPal limiting their accounts. This could either be due to volume of sales or the number of refunds and so on.
Delays in shipping can cause customers to get ants in their pants and ask for a refund while the product is in transit. Customer support can be a nightmare.
Sometimes you may encounter customers who receive the product but say they didn’t or some who return it because of some trivial reason. These little headaches are all part and parcel of ecommerce.
The problem arises when the refunds start affecting your seller account on PayPal. So, you’re constantly walking a tightrope here.
Facebook ads can also be difficult to master and it can take you a while to find a winning product and a winning creative that converts. You’ll be spending money on data… but still feeling the pinch because losing money is no fun.
Nevertheless, you’ll need to persist because a winning product can make up for all the losses and make you thousands of dollars more.
Competition is another problem in dropshipping. When other marketers see that you have a profitable product, everyone jumps on it and starts selling it and saturating the market.
Since the product is not unique to you, you’ll either need to brand it well or start looking for the next winning product. This is one reason why print on demand is better. Others can’t sell your design because of the copyright, though that too doesn’t stop dishonest marketers
You MUST have a slightly bigger budget
Ecommerce will require a slightly higher budget. You’ll need to pay monthly if you’re using Shopify. You’ll also need to run paid advertising to your products. You’ll need some money to act as a buffer in case you have refunds and all.
You’re looking at anywhere from 1k to 4k when you’re starting out. So, if you’re a beginner and you’re on a tight budget, this business model may not be for you.
In conclusion, ecommerce is highly profitable. There’s no denying this. However, it is risky and there are several hiccups that can and will occur along the way.
So, you’ll need to be extra careful to ensure that everything is going along smoothly so that you don’t jeopardize your payment processor account. You’ll also need to track your ad spend closely so that you stay in the green.
Cast your notions of a laptop lifestyle aside and know that you’re in for a fight… until you succeed. All the work will be worth the effort when you find winning products, but until then, it’s a real grind. Forewarned is forearmed.