Overview:

Webocity Technologies is one of the prominent and leading ECommerce Website Development and Designing Companies in Delhi NCR. At Webocity technologies, we provide services in varied spheres of technology including Website Designing, Digital Marketing, ECommerce Solutions, Mobile Application Development, PPC Management. We are also one of the best Ecommerce Portal Designing Companies in Delhi and in India as well.

E-commerce:

ECommerce stands for Electronic Commerce or Internet Commerce. ECommerce deals with the sale and purchase of goods and services online. It also comprises of onlinemoney transactions and data exchange. The customer browses through the catalogue of items or services available with the online seller, selects the item or service as per his/her requirement, provides delivery address details and makes payment through the different payment options provided. Currently ECommerce is a blooming industry bringing the world closer due to it’s wide reach. ECommerce has beenclassified into four categories based on the end users of the application:

• Business to Business
  • It refers to the online transaction between two businesses. The end customer is not a part of this ECommerce transaction.
• Business to Consumer
  • It refers to the online transaction between a business and a customer directly.
• Consumer to Consumer
  • It refers to the online selling and buying of used goods between two customers. No company is part of this transaction.
• Consumer to Business
  • It refers to the online transactions between a customer and a business wherein a customer provides services to the business.

Advantages of ECommerce:

• ECommerce facilitates the sale and purchase of goods and services irrespective of the geographical location of the seller or the customer.
• It ensures faster delivery of goods and services with minimal effort from the customer. The customer grievances are also sorted out faster.
• The application is functional 24/7 and allows for unperturbed shopping experience.

Disadvantages of ECommerce:

• The cost involved in setting up and maintaining an ECommerce business is very high.
• Security of customer information is another major concern which needs to be addressed in the ECommerce application.
• Operational challenges like problems in shipping, wrong deliveries, late deliveries etc. have to be taken care of in order to attain complete customer satisfaction.

Dropshipping:

Dropshipping refers to the business model wherein the business fulfils the order without keeping the goods in stock. When the customer places an order for a product with the business, the order is redirected to a supplier who in turn supplies the ordered goods.  In short, dropshipping simply facilitates a commercial transaction between a supplier and a customer. It provides suppliers extra business with minimal cost and effort. However, the dropshipping company’sreputation is completely dependent on the quality of the goods or services provided by the supplier. Therefore, it is very essential for the business to find the right suppliers providing quality goods/services at affordable prices.

Advantages of Dropshipping:

• Minimal investment is required to start the business as no products and inventory are purchased beforehand.
• The business can be run from any geographical location with internet connection. The retailer should be in contact with the supplier and the customer all the time in order to manage his/her business effectively.
• A wide variety of products can be offered to the potential customers as the products need not be physically available with the business at that point of time.
• The scalability of the dropshipping business is easy and the load is shared by the suppliers.

Disadvantages of Dropshipping:

• The profit margins in the dropshipping business is minimal due to heavy competition in the market.
• As the business does not maintain it’s own inventory, it becomes difficult to manage and keep track of the inventory obtained from the supplier.
• The shipping issues and charges should be discussed with the suppliers from time to time.
• If the quality of the products provided by a supplier is low, the business needs to take responsibility for the same in case of a customer complaint.

Difference between ECommerce business and a Dropshipping business

ECommerce Marketplaces are specifically consumer-centric businesses where different brands can market and sell their products along with other brands. However, the Dropshipping business focuses on marketing specific goods from different suppliers by the retailers.

ECommerce Marketplaces have specific quantity of goods in stock. They carry out detailed market research and zero in on the quantity of products and the inventory to be maintained at any given time. Dropshipping businesses do not maintain any products or inventory till an order is received.

The initial capital investment for an ECommerce business is quite high compared to the Dropshipping business. ECommerce businesses invest on the warehouses for products storage, inventory etc. Dropshipping businesses do not invest on any of these and hence it is a low investment business.

ECommerce businesses have higherprofit margins compared to Dropshipping business. Once the business gets a clear idea of the demand for a specific product, it can reduce it’s money spent on stock accordingly and hence maximize profits.

The ECommerce business has greater control over the order fulfillment process as it allows the business to customize it services offered to the customer. However, in the Dropshipping business, the retailer has no control over the speed, cost and quality of the services provided as it is taken care of by the respective supplier.

Although there are a number of pros and cons for both ECommerce and Dropshipping business, it is not a wise decision to enter into the dropshipping business without proper market research. It is very important to have a number of suppliers who adhere to high standards. As the retail dropshipping business is responsible for customer interaction, it is answerable to the customer in case of any grievance. Customer care service is another issue that should be discussed with the suppliers when starting the business. The business should also ensure that the suppliers maintain certain stock so that order fulfillment is possible at any given time.

In conclusion, dropshipping can be profitable for the suppliers, retailers and the customers if it is implemented in well-designed manner. If you are contemplating, getting into the dropshipping business, it is advisable to not get into dropshipping completely but to use the model as a part of a larger ECommerce retail model in order to get more customers.