What is dropshipping, the business that allows you to win without putting a weight and investing only when you pay you

Argentines are world champions of the search.Thus, when the pandemic and the economic crisis were taught with thousands of people in the country, some saw an opportunity to earn money thanks to the tail wind that received electronic commerce this difficult year.

And within the ecommerce, a particular branch welcomed them thanks to their most outstanding quality, which allows you to enter with little - or nothing and earn money with products that are not their own.

It's about dropshipping.While it may seem unknown to most, surely many free market users, without knowing it, buy products from a seller who resorts to this modality.To define it in a few words, it allows you to sell goods through the Internet without stock.

"It would be like a modern version of the 'consignment' merchandise, with the particularity that the product never passes through the deposits or premises of the one who sold it, but is direct from the manufacturer to the client's house," Gustavo Sambucetti tells Iproup, Institutional Director of CACE.

How does it work?

Florencia Allevatto, CEO of the Marketplace of Aluminum Products of the Sausaluminio Profiles.Net, details Iproup that, with this model, when a sale is specified the store that achieved the transaction buys the merchandise of a third party, who forward it directly to the customer.

"This implies not having to invest in the product or in storage spaces, but simply take care of management," he adds.For his part, Luciano Rafowicz, Sales Manager of the digital agency Commerce Summa Solutions Latam, reinforces Iproup that in dropshipping, trade does not maintain the goods it sells in stock.

"One reveals assets of a manufacturer at a price and pays the producer a differential value at the time of specifying a sale", Complete Carolina Di Pietro, Marketing Manager of Invoicelore.

For its part, Mariano Stempler, CEO of Cucumart, automated dropshipping platform that unites vendors with suppliers, provides Iproup the example of a manufacturer of leather items from Córdoba, and a dropper that discovered in England a market for these goods:

"Thus, if the producer sells a mount to US $140, the merchant remarks US $ 200, for example, and finds a customer who is willing to pay that price.And all happy, "summarizes.

The initial kick

The pandemic crisis impacted the economy of Argentines and this brought the entry of new actors for sale online.In this way, dropshipping is one of the alternatives that many chose to generate income and inaugurate business with little investment.

"It also breaks with traditional models and discusses the role of a physical store of a known product.For example, if the product is a dress, surely the buyer will want to try it before and there fits the traditional model.But if you sell a football shirt, it is not necessary, "adds Stempler.

From the Digital Marketing Agency Emprender Simple indicate to Iproup that Mercado Libre, as a platform known by all, "is the great option to do dropshipping in Argentina", and stand out "that allows contact with suppliers to then work with them in a moredirect, without going through that platform ".

Thus, anyone who decides to start selling under this methodology must choose manufacturers or wholesalers and through ecommerce channels take care of the products that will be paid once said said.In addition, the shipment will be in charge of the manufacturer.

"We must bear in mind that at no time we are acquiring the products, but that we use the money that the customer previously gave us for the purchase.This causes the initial capital to drastically, "they add from undertaking simple.

Di Pietro emphasizes that the seller can use other platforms in addition to Mercado Libre - like Tiendanube, Shopify, Amazon - or having its own place to resell.

"This model favors the generation of income for sellers and at the same time signs it to many companies, small and mediumand develop strategies to increase the total transactions, "the expert completes.

Allevatto coincides with his colleague and adds that "the operation requires a certain degree of coordination of systems and suppliers, however, it is a possible modality".

How much can you win?

One of the interesting facet of the dropshipping is that it does not require a large capital so anyone with basic knowledge and desire to grow can exploit it."From having an online store or electronic sales channel, and through agreements with manufacturers or wholesalers, the seller publishes the products and begins to sell," Rafowicz synthesizes.

That is why it has become so popular among many people, not to mention that they give them the freedom to operate the business from anywhere only with the cell phone or computer.The largest investments, explain from undertaking simple, are made in following elements:

For more than the general costs of the dropshipping are low, there is something to take into account: those who begin have to go through the test and error process making the costs rise, mainly in regards to advertising.

"It can start between $ 100 and 200, although the ideal would be between 300 and 500 if we want to accelerate the times.The interesting thing about this model is that it can become an extremely profitable venture, with dollar billing, "they stand out from undertaking simple.

On the other hand, determining how much money can be "earned" in the dropshipping will depend on three elements:

From Cace they argue that "although it requires a high degree of coordination, it implies great cost efficiency, since it minimizes the management and transfer of merchandise".

Likewise, both Di Pietro and Rafowicz agree that "profitability margins are around 20%".The CUCUMART CEO adds that "a large capital is not required since it is not necessary to invest in the expensive window in a shopping.But the tuning of the process takes time ".

Pandemia boom

As they reveal from Cace, this modality is increasingly added: "It allows them.

"In general these are large volume or low rotation products, which is known as Long Tail.The role of logistics is key as it implies a transaction on a stock that is physically not held by those who intermedy in sale, "they point out from the institution.

For its part, Allevatto considers dropshipping as a variant within online sale that has been "one of the alternatives that many people explored to make their savings, open job opportunities and incorporate new channels and sales strategies during the pandemic", Highlight Di Pietro.

According to the expert, the dropshipping helped "that retails of some items can survive using the stock of the provider or direct manufacturer".Already at the plane of the renowned chains, Garbarino, Falabella and Frávega already use the dropshipping promoting on their website the products that are in the deposits of their suppliers.

Expert advice

Anyone who is interested in venturing into this world has to take into account three key aspects:

"The best strategy," says experts to undertake simple - is to create a 'digital sales funnel': a system based on the way the customer buys online.It consists of attracting the consumer, cultivating the relationship and encouraging him to buy ".

Also, the five mistakes that beginners most make are:

1. No tener un plan: no es un modelo de negocio mágico, se necesita trabajo duro y una hoja de ruta clara
2. No conocer el producto: el dropshipper debe resolver las dudas del cliente, no el proveedor
3. No investigar al mayorista: es necesario establecer una relación clara con el proveedor para evitar problemas
4. No chequear las garantías: tienen que ser las adecuadas para evitar dolores de cabeza
5. Enamorarse de los productos: si un artículo deja de ser rentable, hay que dejarlo de lado y empezar con otro

Among the most common mistakes is to have high expectations.An analysis should be done about what can be sold and at what price, along with the volume of options that will be exhibited in the online store.

The key, as Stempler advises, is not to lose sight of what he calls "the triple P": promote the product with patience.