Dropshipping vs. Reselling

Entering the world of ecommerce presents a myriad of opportunities for aspiring entrepreneurs. In the world of online commerce, two popular avenues are dropshipping and reselling—each offering distinct benefits and challenges. In this comprehensive guide, we'll explore the ins and outs of both models to help you decide which path aligns best with your business aspirations.

What is Dropshipping?

Dropshipping is a streamlined form of retail business where the store owner does not keep the products it sells in stock. Instead, when a store sells a product, it purchases the item from a third party and has it shipped directly to the customer. As a result, a dropshipper never sees or handles the product directly, which can significantly reduce the overhead associated with warehousing and logistics. This business model is particularly appealing for new entrepreneurs because it minimizes the risk and investment required to start and operate a traditional retail operation.

By eliminating the need for a physical inventory, dropshippers can focus on customer acquisition and service, leveraging their resources to test various markets and products without substantial upfront costs. Additionally, dropshipping allows for a wide range of products to be offered as the seller is not limited by storage space or capital tied up in merchandise. This flexibility enables dropshippers to quickly adapt to consumer trends and changes in the market. Without a doubt, dropshipping is an exciting opportunity for new and experienced entrepreneurs looking to start their very own online business.

How Does Dropshipping Work?

Dropshipping is an innovative retail model that allows you to operate an online store without owning any inventory. Once you set up your store, you can sell products to customers without ever purchasing or storing them yourself. This is made possible through a partnership with suppliers who handle all the storage, packaging, and shipping of products directly to your customers. Here’s the step-by-step process:

1. Choose a niche: Identify products that are in demand online and not overly saturated in the market.
2. Find suppliers: Partner with suppliers that can provide these products at a wholesale price.
3. Set up a store: Use platforms like Shopify to create an online store.
4. List products: Add the chosen products to your store, setting prices that include your markup.
5. Market your store: Use social media, search engines, and other digital marketing strategies to attract customers.
6. Fulfill orders: When a customer makes a purchase, the order is sent to your supplier who ships the product directly to the customer.

While dropshipping can be less capital intensive, it requires excellent supplier relations and strong marketing strategies to succeed. Building a strong partnership with reliable suppliers ensures product quality and timely deliveries, which are crucial for maintaining customer satisfaction. Effective marketing strategies, particularly in digital marketing, are essential to generate traffic and convert visitors into buyers. Additionally, constant analysis and adjustment of these strategies based on market feedback and performance metrics are key to staying competitive in a rapidly changing ecommerce landscape.

What is an Online Reseller?

In a nutshell, a reseller is a person or company that buys products from different suppliers and sells them to the consumer. They buy products from manufacturers, wholesalers, or other retailers and mark them up to make a profit. Unlike dropshipping, resellers typically handle the physical inventory and are responsible for the shipping logistics. This business model offers more control over stock, pricing, and branding, but it also demands more initial capital and storage space. Additionally, managing physical inventory allows resellers to provide quicker shipping times and more personalized packaging, which can significantly improve the customer experience and build brand loyalty.

However, this model requires a careful balance of inventory to avoid overstocking or understocking, which can tie up capital or lead to missed sales opportunities, respectively. Effective inventory management techniques and tools are therefore essential to optimize the balance between demand and supply and ensure the business remains profitable.

How Do I Become a Reseller?

Becoming an online reseller in the Philippines allows you to capitalize on the vibrant ecommerce market by selling products directly to consumers through various digital platforms. Once you decide to start your reselling business, follow these steps to set up and manage your operations as a reseller successfully:

1. Market Research: As a reseller, you want to identify trending online products that you can source at a competitive price. Focus on items that are popular and have a steady demand among Filipino consumers.
2. Source Products: Build relationships with both local and international suppliers who can provide high-quality products reliably. This is crucial for maintaining product quality and ensuring customer satisfaction as a reseller.
3. Choose a Selling Platform: Opt for online platforms that are widely used in the Philippines such as Facebook, Carousell, Instagram, and TikTok. These platforms not only allow you to reach a broad audience but also engage with them directly, which is essential for building customer relationships.
4. Manage Inventory: Keep a diligent record of your inventory to prevent issues like overselling or running out of stock. As a reseller, you should use inventory management tools to streamline this process, ensuring you always know how much stock you have available.
5. Optimize Your Operations: Continuously assess and improve your logistics and customer service operations. In the Philippines, where geographical challenges can complicate delivery, choosing reliable logistics partners and providing excellent customer service can set your business apart from another reseller that sells the same products as you do.
6. Engage With Customers: Utilize your chosen platforms to not just sell but also to interact with your customers. Regular engagement can help you gather valuable feedback and foster a loyal customer base. Remember, as a reseller, building a relationship with your customers is as important
7. Localize Your Approach: Tailor your business strategies to the unique cultural and economic context of the Philippines. This includes adopting popular local payment methods like cash on delivery and ensuring your marketing messages resonate with Filipino consumers.

By following these steps, you can establish a successful reselling business in the Philippines, leveraging the growing ecommerce landscape and the extensive reach of social media platforms.

How to Resell Products Online

Successful online reselling hinges on effective marketing and robust customer engagement. Here's how you can enhance your online presence and sales:

1. SEO Strategies: Use SEO techniques to increase the visibility of your website or marketplace listings. This involves optimizing your content with relevant keywords, ensuring your site is mobile-friendly, and improving site speed to rank higher in search engine results.
2. High-Quality Product Photos and Descriptions: Invest in professional-quality photos and write detailed, compelling product descriptions. This not only helps in attracting customers but also reduces the ambiguity about the product, thereby decreasing the chances of returns.
3. Social Media Marketing: Platforms like Facebook and Carousell offer distinct advantages for resellers.

• Facebook: With its vast user base, Facebook is ideal for building a broad brand presence. It offers targeted advertising options which allow you to reach specific demographics and interests. Facebook’s format supports longer posts, stories, and live videos, giving you ample opportunity to engage deeply with potential customers.
• Carousell: On the other hand, Carousell is a community-focused online marketplace that excels in user-to-user sales. It's particularly effective for targeted local outreach and can be ideal for niche markets. The platform's simplicity and mobile-first approach make it easy for users to browse and buy quickly.

1. Facebook vs Carousell: Choosing between Facebook and Carousell depends on your business goals. Facebook provides a larger reach and more robust marketing tools which are beneficial for building brand awareness and engaging with a wide audience. Carousell, however, might be more effective for quick, direct selling within specific local communities or niche markets.
2. Direct Engagement: Regularly interacting with customers through these platforms can help build trust and loyalty. Respond to queries promptly, ask for feedback, and create interactive content to keep your audience engaged.

• Promotions and Discounts: Offering time-limited promotions or discounts can create urgency and boost sales. Highlight these specials in your online listings and social media posts to attract more buyers.

Reselling Business Ideas

Embarking on a reselling business can be lucrative if you identify the right niche. Here are several reselling business ideas to help you get started:

1) Vintage Clothing

The market for vintage clothing has seen a resurgence among eco-conscious consumers looking for sustainable fashion options. Use platforms like Instagram and Etsy to showcase your collection, and consider creating styled looks to inspire potential buyers.

2) Tech Gadgets

With technology continuously advancing, there is a constant demand for the latest gadgets. Platforms like eBay and Amazon are ideal for reaching tech-savvy consumers who are looking for good deals on electronics.

3) Specialty Foods

There is a growing trend towards gourmet and specialty foods that offer unique flavors or cater to specific dietary needs. Include detailed descriptions of the origins, flavors, and possible uses of the products to educate your customers and enhance the shopping experience.

4) Fitness and Wellness Products

Fitness equipment and wellness products have seen increased popularity as health and wellness continue to be a priority for many. Consider creating content that educates your audience on the benefits of staying active and healthy, which can help drive sales.

5) Collectibles and Memorabilia

Collectibles such as comic books, action figures, vintage toys, or sports memorabilia can be highly lucrative, especially if you specialize in rare or sought-after items. Engage with communities on forums and social media platforms dedicated to collectors.

6) Handmade Crafts and Art

Consider reselling handmade items like pottery, jewelry, or art prints. Use storytelling in your marketing to share the artisan's background and the craftsmanship that goes into each piece.

How Shipmates Can Help Dropshippers and Resellers in the Philippines

For both dropshipping and reselling models, efficient logistics and customer satisfaction are critical to success. Shipmates, a leading shipping platform in the Philippines, provides tailored solutions that cater to the unique needs of dropshippers and resellers. Here’s how:

1) Book Shipments in Bulk

Dropshippers and resellers often handle a high volume of orders, and managing each one individually can be overwhelming. Shipmates enables these businesses to book shipments in bulk, which streamlines operations, reduces administrative tasks, and allows business owners to focus on scaling their operations.

2) Standard Delivery Couriers: J&T Express, LBC Express, Entrego

Whether you’re a reseller holding inventory or a dropshipper sending directly from a supplier, reliable delivery services are crucial. For standard delivery, Shipmates collaborates with top couriers like J&T Express and LBC Express, ensuring wide coverage across the Philippines. This network allows businesses to provide consistent and cost-effective delivery options to their customers.

3) Express Delivery Couriers: Grab Express and Lalamove

For urgent orders, which are common in the dropshipping and reselling fields, Shipmates offers same-day delivery services through Grab Express and Lalamove. This capability is essential for businesses that need to meet tight customer deadlines and compete on service level, boosting customer satisfaction and retention.

4) Automated Waybill Generation

Shipmates enhances efficiency with its automated waybill generation feature, which is particularly beneficial for dropshippers and resellers who need to manage numerous shipments. This automation reduces the chance of errors, saves time during order processing, and ensures a smoother workflow from order to delivery.

5) Track All Couriers Under One Platform

Transparency in shipping is vital for maintaining customer trust. Shipmates provides comprehensive tracking for all courier partners under one platform, enabling businesses to keep themselves and their customers informed about the status of each shipment. This transparency is invaluable, particularly when managing the expectations of online shoppers.

➡️ Create your free Shipmates account today and start shipping with us today!

Leveraging these features from Shipmates can significantly enhance the operational efficiency of ecommerce businesses, particularly for those engaged in dropshipping and reselling in the Philippines. It's not just about shipping products; it's about enhancing the overall customer experience and building a reliable business model. Whether you plan on dropshipping or just reselling, Shipmates has definitely got you covered when it comes to finding the right shipping partner for ecommerce.