What are Ecommerce and Dropshipping? Differences and Benefits Explained

0
283

Over 14.8% of retail sales in the US are online. They reached a total of $1.07 trillion.

Getting connected is essential to keep a business competitive. It’s simple to start, but understanding all the ways to make your store digital can be difficult.

What are ecommerce and dropshipping? Why are they two of the most popular options? Which one is right for your business?

Read on to learn the differences between the two methods and how an ecommerce app builder can help you get started.

What Are Ecommerce and Dropshipping?

Almost all online store models fall under the umbrella term ecommerce. This includes dropshipping, but there are several differences to find when comparing dropshipping vs. ecommerce.

What Is Ecommerce?

Ecommerce is a business model that puts a store online. The traditional form involves purchasing items in wholesale quantities.

They’re stored, sold online, and packed and shipped to the customer. This is known as ecommerce fulfillment.

You’ll need to run a responsive website and/or build an ecommerce app to let customers place orders. You also need space to store inventory, whether it’s your home or a large fulfillment center.

What Is Dropshipping?

Dropshipping

A dropshipping supplier offers a product you want to sell. A customer places an order for it, and you place an order with the supplier. They ship it directly to the customer.

You’ll still need to create a branded store and manage customers. The supplier handles fulfillment.

Pros and Cons of Ecommerce

Handling the fulfillment process gives you more control. It helps make sure deliveries are fast and safe.

Branding is one of the major benefits of ecommerce. You can also increase brand recognition with logos, tags, and custom designs on your products.

The ecommerce business model requires a higher initial investment. The financial risk is also greater.

You’ll have to put more time into setting up and running an ecommerce store. Much of it will go towards fulfillment instead of tasks that could help you grow like marketing.

A garage is enough space to begin an ecommerce store, but they aren’t easily scalable. Prepare to buy more space and hire employees if your business expands.

Pros and Cons of Dropshipping

The major benefits of dropshipping involve its ease of entry. It’s simple and less expensive for anyone to start, whether or not they have existing inventory.

You’ll begin earning profit without a substantial investment. You’ll also have more time to spend on growing your business and testing products.

Knowing how dropshipping works makes the potential risks clear. You’re putting the entire fulfillment process in the hands of another company. That’s dangerous because 38% of customers never shop at a store again after a poor delivery experience.

You’re also at the mercy of another party’s inventory. They may not have, run out, or discontinue the products your customers want.

Dropshipping also isn’t as profitable. You’ll make less per sale than you would with an ecommerce store.

Get Started with an Ecommerce App Builder

What are ecommerce and dropshipping? They’re names for two online business models. One requires you to keep an inventory of products to sell, and the other outsources the fulfillment process.