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The first thing when it comes to setting up your shopify dropshipping business is to determine if you will get your goods to prospective customers.
There are multiple sales choices available, but you can most likely choose one or a combination of sales on your own online store, Amazon or eBay.
Dropshipping on Amazon
While Amazon stores and sells a variety of goods, many of the listed products are only distributed via Amazon's website to third party merchants. Like eBay, Amazon is working to help promote the selling and address any problems that might occur.
Pros
The advantages of selling on Amazon are close to the advantages of eBay: it's easy to get going, you have instant exposure to a wide audience and you don't have to think about ads or SEO.
Amazon also provides its own fulfilment warehouses known as Fulfillment by Amazon, which allow you to add goods of your own to your drop shipped orders without having to deal with packaging, shipping or warehousing.
Cons
Fees for listing: As with eBay, you pay by relatively small transaction fees for access to this wide network of buyers. The commission rates for Amazon vary by product type but are typically within the range of 10 to 15 per cent. When you work with fairly low dropshipping margins, a large chunk of your earnings would be taken from that.
Data on sales exposure: One of the risks involved with the use of Amazon’s platform is that you won’t be able to view all of your sales results, from the products that sell better to how much you sell overall. Allegedly, Amazon uses that data for improper purposes, such as to find major sales opportunities and promote its own presence in the sector, effectively driving out other retailers selling into its platform.
No long-term consumer liaison. It's doubtful you'll be able to establish a long-term relationship with your clients. Amazon aims to support itself and concentrating on the goods and not the vendors is in their best interest. Be prepared to limit yourself severely on how you can brand your company, show your products and interact with your customers.
No tailoring. In terms of flexibility, you'll be completely constrained. Anything you do is under Amazon's influence in terms of branding, UI, marketing and everything else.
Dropshipping on eBay
As the world's largest online auction platform for physical products, eBay is a platform well known to most people. The following are some of the reasons you may want to think on eBay:
Pros
Easy to get started. You should immerse yourself in and start selling your wholesale goods with eBay immediately. Creating an account, adding a list and you're in company.
Open to the public at large. You'll have access to the many online shoppers that visit the auction giant when you list on eBay. Millions of customers will see your ads, and the relatively healthy and competitive market will help to ensure that your goods get a good price.
Minimal publicity. Since you can piggyback off the massive network of eBay, you don't have to think about ads, SEOs or traffic payments. This makes things easier, as marketing is one of the most challenging aspects of the aliexpress dropshipping business.
Cons
Listing fees. The greatest downside to eBay is the rates you'll be paying. The most notable is the performance rate, which can be up to 10 per cent or more of the products 'selling prices. It will eat into a substantial portion of your earnings in the dropshipping industry, where margins are still very small.
Constant monitoring. eBay is a marketplace in auction form, so you'll need regular tracking and re-listing of the items you want to sell. Many tools help simplify this process but the listing of a static product for sale on your own ecommerce website is still not as straightforward.
You can't tailor your distribution platform to your needs. Your product listings need to follow eBay models, making it easier for your products to create a friendly, value-added page.
No long- consumer liaison. You may have a handful of loyal eBay clients, but most will never buy from you again. Any goodwill that you bank up by excellent service is possibly lost.
The framework of the marketplace is built for serving itself. EBay doesn't want to concentrate on (you) vendors, they just want to concentrate on the goods. You're going to be greatly limited in how you interact with customers, how you market yourself, how you build your shop, etc.
No asset-building. You're creating a real company of interest that you can sell to someone else when you create a shop that attracts traffic and has repeat customers. You are not creating a permanent brand or web property of any real value that can be sold in the future when you sell on eBay.
Setting up your own online store
In order to sell items, the alternative to selling via third-party platforms like Amazon and eBay is to start an online store. This is the method that attracts most interested parties to develop a productive dropshipping company.
Pros
More flexibility. You can create a shopping experience with your own online store that is conducive to the selling of your goods and, most importantly, adds value to your customers. You can customise the look and feel, and create customised personalised product pages to notify your customers about the products best.
Easy architecture. It's simple to create your own eCommerce store, especially with platforms like Shopify. Simply pick a store template from hundreds of choices, make any customizations that you want, add your items, hook up a payment gateway and you're up and running. You can be up and running in one day, depending on what type of online store you're trying to build.
Set for Mobile. Selling over mobile on eBay and Amazon can be a hassle. With a well-respected ecommerce platform, your site will probably be sensitive, meaning it will look great on your iPad or mobile phone. This is becoming increasingly necessary these days, as almost 30 per cent of online transactions are made via a mobile device. Some online store platforms, such as Shopify, allow you to manage all your business from your mobile device. It is particularly appealing to dropshipping business owners who also want to run their business on - the-go, or even anywhere on the beach.
No payments to third parties. You won't have to pay 10 percent to 15 percent on any sale to eBay or Amazon which will increase the profit margins dramatically. All - in-all by setting up your dropshipping company with an online shop, you'll be making more profits.
Creating a big deal. You will create a long-term company with a distinctive look, know-how and repeat customers. Most importantly, you are going to be building an equity company. Selling a company which is based around an independently owned website is much easier.
Cons
Less free traffic with your own store. You'll be responsible for generating traffic via marketing, SEO, and paid ads on your own site. There are more expenses involved, either spending money or time, and you'll have to be able to invest in a long-term campaign to market your new store.