There are almost 24 million ecommerce businesses worldwide, and the majority of these businesses employ the dropshipping model of business. What good is an ecommerce business if you don’t plan to expand it beyond borders? Undoubtedly International dropshipping can be a game-changer for opening up new opportunities for growth and increased revenue. In this article, we will be delving into the world of international dropshipping, understanding its benefits, challenges, and best practices. Whether you’re a budding entrepreneur or an established business owner, this article has answers to all queries, and strategies to tap into the vast potential of the international dropshipping market..
Understanding International Dropshipping
Dropshipping, as you must be aware, is a business model that allows you to sell products without having to manage the inventory. When you take this model to international markets, you’re basically selling products to customers globally, without having warehouses/managing inventory in every place. To understand the real potential of international dropshipping, let’s have a look at relevant statistics. According to a report from Oberlo, a dropshipping giant, the global dropshipping market shall reach $243.42 billion in 2023, a CAGR of 23.7% from 2022-2026.These numbers don’t appear to be a surprise as 27% businesses, as Shopify claims, fulfill orders through dropshipping. Another important aspect is the average order value of dropshipping orders, which was $23.50 as of 2022.All these numbers show that investing time, efforts, and capital in international dropshipping is worth considering. However, let’s understand why dropshipping might be more beneficial or challenging as compared to other business models in the ecommerce world.
The Benefits of International Dropshipping
Let’s start on a positive note; here are the most common benefits of international dropshipping;
- Low Startup Costs: Since you don’t need to buy the inventory, it’s definitely more budget-friendly. You can start with a small investment, and prioritize other parts of business where you need that capital more than inventory.
- Low Overhead Costs: Simply put, you don’t need a warehouse/storage facility when you don’t have inventory, so it cuts you overhead costs.
- Easily Scalable: With dropshipping businesses, you can gradually add suppliers to your team as you keep growing.
- Access to Global Markets: Without worrying about shipping costs, you can sell products to people around the globe once you have found your supplier. This automatically allows your business to reach a bigger audience, and helps with quick progress.
Overcoming Challenges in International Dropshipping
According to a study by Digital Commerce 360, the most significant barrier to starting a dropshipping business was securing a good supplier as of 2022. Many dropshipping companies also find it hard to ensure excellent quality and consistent availability of products as their suppliers fail to fulfill orders.Another barrier in the international dropshipping market is competitive nature. A study from HubSpot showed that customers on dropshipping websites are likely to scroll away if they don’t find a useful product in 15 seconds.Other challenges include language barriers, currency fluctuations, shipping logistics, customs regulations, and customer support. By understanding and addressing these challenges, you can ensure a smooth and successful international dropshipping operation.
Endnote – Best Practices for International Dropshipping
All in all, while international dropshipping is a lucrative business, it is equally important to do it the right way. This includes choosing the suppliers carefully. Take in consideration important factors such as product quality, price, shipping speed, and customer service. So, choose suppliers you choose who are reliable and have a good reputation. Next up, don’t compromise on setting competitive prices. When setting prices, it is important to consider the cost of the product, custom costs, and the profit margin you want to make. Plus, a key aspect to a successful international dropshipping business is marketing the store to potential customers. You can do this through social media, email marketing, and paid advertising. While you are at it, invest in customer service too. As a dropshipping business, you are responsible for providing excellent customer service, including answering questions, resolving complaints, and processing returns.Last, but not least, be patient. It takes time to build a successful dropshipping business, you can’t expect to make a fortune overnight. Be patient and persistent, and you will eventually start seeing results. International drop shipping opens up a world of opportunities for e-commerce businesses, allowing them to tap into diverse markets. By embracing this model and applying the best practices outlined above, you can unlock the full potential of international trade. Remember, success in international dropshipping is influenced by careful planning, adaptability, and a commitment to delivering exceptional customer experiences. With the right approach, your business will definitely thrive in the ever-evolving landscape of global e-commerce.