The internet is a gold mine, and it is up to you to find THE right business model.
We are seeing more and more online stores emerge, particularly through influencers who promote them via product placements. So why not claim a share of the spoils by opening your own dropshipping site?
In this configuration, the reseller is considered a service provider because they connect the customer with the supplier. The reseller is responsible only for the sale and does not have to deal with the rest, namely the logistics chain and inventory.
The supplier – which handles the shipment of the products – is considered a subcontractor.
This system is highly advantageous for the reseller, who only has to focus on selling the products: storage and shipping are handled by the supplier.
In this scenario, the reseller’s number one priority will be to find a reliable partner who will take over once the customer has placed an order.
In summary, the reseller is simply a service provider whose sole mission is to sell the supplier’s product in order to earn a margin.
Before getting started, what is dropshipping?
Dropshipping is THE trend of the moment; it is being discussed everywhere on social media and online. However, for most internet users, it remains a misunderstood or even unknown concept. Dropshipping is based on a three-party system:- the supplier: gives the reseller access to its inventory
- the reseller: showcases the supplier’s products on its website
- and the customer: purchases the products
In this configuration, the reseller is considered a service provider because they connect the customer with the supplier. The reseller is responsible only for the sale and does not have to deal with the rest, namely the logistics chain and inventory.
The supplier – which handles the shipment of the products – is considered a subcontractor.
This system is highly advantageous for the reseller, who only has to focus on selling the products: storage and shipping are handled by the supplier.
In this scenario, the reseller’s number one priority will be to find a reliable partner who will take over once the customer has placed an order.
In summary, the reseller is simply a service provider whose sole mission is to sell the supplier’s product in order to earn a margin.
What are the advantages of dropshipping?
If you are just starting out in the e-commerce industry, dropshipping can prove to be a very profitable business. The main advantage of this sales system is that it allows you to save on the initial capital investment, since you do not need to purchase the inventory of the products you sell on your website. Consequently, you do not have to worry about unsold inventory, since dropshipping is, by definition, acting as an intermediary between the customer and the supplier. It therefore becomes possible and accessible to launch your business at a reduced cost, making it the ideal way to begin your entrepreneurial journey. As for earnings, before implementing this system, the reseller and the supplier agree in advance on a fixed amount to be shared only when a sale is made. There are therefore no additional fees for the reseller. Another advantage is the ability to offer a rich and varied product catalog. This is a boon for a new e-commerce site that wants to make itself known and generate sales. You can therefore focus 100% on your core business: selling products.The weaknesses of this system
The first problem that may arise is finding a reliable supplier in your industry. This is the biggest part of the work, since the reseller will have to present solid arguments to convince the supplier to accept this system, which is undeniably more advantageous for the reseller than for the supplier. The dropshipping industry is largely powered by a network of Chinese suppliers and wholesalers. The number of Chinese companies specializing in dropshipping has exploded in recent years. In addition, close and regular communication must be established between the two parties. In fact, the reseller must frequently check inventory levels with the supplier in order to fulfill all sales made through the reseller’s e-commerce site. This system has existed for several years and is used by most well-known platforms, such as Amazon, eBay, Priceminister....MERRITT MIDDLE EAST’S ‘DROPSHIPPING’ SOLUTION
We have developed a specific solution for dropshipping professionals to address 3 issues:- Personal tax residency in the Emirates (no income tax or social security contributions)
- Sale of goods without taxation on profits
- Tax compliance (VAT, etc.)
