Dropship is a business model where a seller does not stock the products in its store. So, when an order gets placed from its online store, someone else ships the product to the customer.
In dropshipping, the customers purchase the products and make the payment on the web store, but the order is fulfilled by another merchant, wholesaler or supplier.
In the dropshipping method, the store owner will never handle the product on its own, only list the products on the webstore.
The store owner asks for the catalogue of products from the suppliers who are holding the inventory to update products accordingly on their website.
The store owner has the products virtually but the physical products are stocked at the supplier’s warehouse only.
And, as any order gets placed, the store owner then purchases the product from that supplier and transfers all the order, and shipping details and has them ship the products directly to the customer.
If a customer places an order for a t-shirt, then the store owner after taking the profit margin from the transaction will transfer all the orders and shipping details to the supplier who is holding inventory for the order placed.
Then the supplier ships the order directly to the customer.
Opencart Marketplace with Dropshipping
Opencart is a complete shopping cart platform, it is widely popular and used by thousands of merchants worldwide.
But before we proceed, we need to first convert the basic Opencart store into a multi-seller or multi-vendor marketplace. This requires Opencart Marketplace Extension.
Further, to have a drop shipping feature, you need to use the Opencart Dropshipping extension also.
Dropshipping vs FBA (Fulfilment by Amazon)
As we know Dropshipping is a business model where the store owner sells the products to their customers, without creating or storing products in the warehouse.
You just need to contact the supplier as soon as you receive the order and transfer the details to the supplier, who in turn will process the order and ship the order directly to the customer.
Now, as we know the growth of the E-Commerce industry leads to the demand for faster delivery of services. And in order to meet the challenges store owner are looking to modify their supply chains.
The transformation seen in this industry is the biggest if, we are talking about the warehouses or fulfilment centres. In order to full fill the maximum number of orders, sellers need to invest in inventory storage.
That is more warehouses and more numbers of products which in turn full fill more delivery of orders.
Amazon, Flipkart, and Alibaba are among the growing number of providers which are offering online marketplaces that have the capability to fulfil retailers’ orders.
FBA (Fulfilment by Amazon)
FBA is among the best online marketplace fulfilment centre, in which sellers can use the giant Amazon warehouse infrastructure, to store their inventory and utilize the best in service of packing and shipping the orders.
Providing them with the world-class expertise of Amazon and their trusted customer services.
In Amazon fulfilment centres sellers will stock their goods which will be taken care of by Amazon and they will only pick, pack & deliver the orders directly to the customers.
Which in turn helps the sellers to manage their sales and eventually helps them to increase their online e-commerce business further.
If you are looking to integrate your e-commerce website based on Opencart with the Amazon store, then you can use the Opencart Amazon Connector.
This will help online sellers to import/export products, orders, and customers from Amazon to opencart and vice-versa.
Now whether to choose Dropshipping or FBA we must see the differences between them.
When you are doing drop shipping business, the customer places an order, you will transfer the order details to the supplier who will then process the order accordingly and ship the order from his warehouse directly.
This method of running a business requires much less investment.
But if we are talking about the fulfilment of the order from Amazon, which in general involves sourcing products in bulk, and then usually spending resources to store them until a customer places an order which will increase the investment.
Fees For Maintaining Inventory
In dropshipping business as there is no need to maintain the inventory for the products as the suppliers deliver the order directly from their own warehouses.
So there is no need for the store owner to pay fees for storing the products.
But if we are talking regarding the Amazon fulfilment centres here the store owner who has stocked their products with Amazon needs to pay fees for stocking their products in Amazon Warehouses.
Whether you are making a profit from your sales or not you have to pay money to store your products.
In Dropshipping business you can use your marketing strategies rather not to depend upon some else workflow. You can choose from multiple Suppliers instead of going with one, for different or the same products.
And if we look into the case of FBA, Amazon solely manages its strategies, you depend upon their rules when it comes to marketing, storing & shipping of products.
In the Dropshipping method, as we know that the store owner does not maintain the inventory stock at the physical warehouse.
But by using our Opencart Dropship Management Module, the store owner will be able to import products from Aliexpress to his own store online and can start selling those products within his own store very easily.
You can easily place orders for the products which are from AliExpress, just by clicking a button at your Opencart store backend.
Delivery & Shipment
As the customer places an order, the nearest warehouse gets order details depending upon the customer’s location and from there the product ships directly to the customer.
Dropship does not involve the store owner in delivering or shipping process the concern will be only the suppliers.
You can easily add our Open cart Dropship Management module to your existing or New E-Commerce website and can manage multiple warehouses for products with specific quantities.
And along with this can add respective shipping details for different warehouses using CSV Files. The Shipping charges will be based on the distance between the warehouse and the customer location.
With our Opencart Dropship Management Module, the store owner can set the pricing rules for the store products as well as for the products which are from Aliexpress.
The store owner can charge a commission on every order placed whether the product is an existing or imported product from Aliexpress.
That’s all for this article & I hope you all get the idea about how to start a Multi-Vendor Dropshipping business. You can use our Opencart Dropship Management module in order to easily manage your Multi-Vendor dropshipping business. If you have any issues, please feel free to add a ticket and let us know your views.