There are success stories that tell the lives of entrepreneurs who became millionaires by dropshipping, but there are also horror stories of those who claim that this is not a profitable business… so: does dropshipping work? dropshipping in mexico?
The reality is that, as in everything, there is a learning curve that any entrepreneur must go through to be successful with dropshipping, a business model that has become one of the favorites of digital business entrepreneurs.
But let’s go a step back, before explaining how to dropship and where to find providers of products to sell online, we are going to give a quick review of the bases of this business model.
What is dropshipping?
dropshipping is a digital business model in which a seller or a company can make sales without having inventorysince it acts as an intermediary between a buyer and a supplier or “drop shipper”.
Dropshipping works like this: a seller offers a series of products from a provider for sale in a digital channel (online store, marketplace, social network, etc.). When a customer makes a purchase, the seller contacts his supplier and indicates the product and the address to which he has to send it. The customer pays the seller and the seller in turn must pay the supplier.
What does dropshipping mean?
Dropshipping could be translated as “direct shipping”, but it doesn’t actually have a Spanish translation. In fact, the English term is widely used in the Spanish-speaking e-commerce industry to refer to the sale of products online without their own inventory. Dropshipping as a business model has advantages and disadvantages. Next we will tell you what they are.
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Advantages of dropshipping
In recent years, dropshipping has become one of the favorite businesses of thousands of digital entrepreneurs in the world who are successfully searching. This is due to some of its advantages, among which are:
1. Little investment
The simple fact of do not have a stock of products in a , is one of the most attractive parts of dropshipping. And it is that to start selling, it will only be necessary an initial investment in the digital channel through which the sales will be made.
For example, if you want to sell through your own online store, you can work with an electronic commerce platform such as Tiendanube, which gives you all the tools you need to sell online.
2. Low fixed expenses
Every business needs to define its fixed and variable expenses (by the way, here you can make this task easier for yourself 😉). Fixed expenses are those that do not depend on sales.
In dropshipping, fixed expenses can include the monthly cost of the sales platform you use, your salary and that of your employees, and everything that is maintained from month to month.
3. No shipping management
For some online sellers, the are one of the most complicated and time-consuming parts. The good news is that with dropshipping, All you have to do is tell the supplier the address to which the product should be delivered. and he will take care of everything else, from packing and crating to shipping, determining the delivery time from his warehouse to the customer’s door.
Disadvantages of dropshipping
Just as there are plenty of benefits to working with dropshipping, there are also some disadvantages that you should take into account if you plan to start in this business model.
1. Little or no control in shipments
One of the biggest advantages of dropshipping can also be one of its main disadvantages. And it is that, unlike when you manage your own, the fact of not having participation in the sending process, can cause problems ranging from careless packaging that does not reflect the values of your brand, up to late delivery or loss of the package.
In addition, situations may arise where the end customer has a bad experience in which they are given a different item. This usually happens with the “star products”. The recommended thing to avoid losing credibility is not to upload too many products and pay close attention to user evaluations.
2. A lot of competition
Dropshipping has gained popularity in recent years and that is precisely why there is more and more competition, that is, hundreds of companies that are selling the same thing both locally and internationally.
This disadvantage is directly related to the following…
3. Low profit margin
It’s no secret that shoppers like to compare prices and find the best deal. That is why, If you want to beat the competition and provide competitive offers, then you are going to have to lower your prices..
As a result, your profit margin for each sale may decrease when dropshipping and this will end up affecting the profits of your business.
💡 Type: One solution to low profit margins is to use dropshipping products as a bait to attract more customers to your online store. For example, you could make a promotion with products within the dropshipping platform that have to do with the products of your own store and attract those potential customers to buy directly from your store.
What are the best options for dropshipping in Mexico?
In the world there are many dropshippers, that is, dropshipping providers, but not all of them do business in Mexico. Next we are going to talk about four sites for dropshipping in Mexico.
1. AliExpress
This is undoubtedly The biggest in the world. It is part of the Alibaba Group, is available in 15 languages and has more than 100 million items for sale.
AliExpress is a kind of marketplace where you will find products from suppliers from China and other parts of the world. It has categories such as fashion, telephony, electronics, home, pets, jewelry, footwear, beauty, etc.
With Tiendanube you can do using the application of It is a very simple way to connect your online store with this provider and start dropshipping. In this we explain what you should do step by step once you have your online store with us.
With this integration you can:
- Manage all the orders of your store.
- Import evaluations of your products to Tiendanube.
- Automatically translate product information.
- Keep the status of your orders updated automatically, among other things.
💡 Type: 11/11 is celebrated on November 11 of each year and it is a day in which the platform offers its best discounts of the year.
2. Printful
Dropshipping is not at odds with creativity. In fact, there are providers like , that allow you sell personalized products with your designs and creations. Printful is a print-on-demand company with production centers on five continents. Some of the products that you can customize are t-shirts, sweatshirts, pants, underwear, hats, mugs, cushions, posters, notebooks, stickers, etc.
If you have a CloudStore, you will be able to . In the following video you will learn the step-by-step process, from the creation of your Tiendanube to how to configure languages, currencies and shipments.
3.Oberlo
Oberlo is a dropshipping provider that is available only for store owners on Shopify. This provider offers plans whose prices depend on the number of items you want to import to your store and the number of orders that can be made per month.
4. Local suppliers
Another option for dropshipping is to work with local suppliers in your city or country. The big difference between this and the previous options is that in this case you will have to establish the conditions and reach an agreement with the provider so that the exchange works. This maintains the advantages for those who seek alternatives to physical stock and with their own merchandise.
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What platforms can I dropship with?
There are various alternatives for display the products you are going to sell, each with their respective strengths and weaknesses. Next we talk about the three channels for dropshipping most used in Mexico.
1. Own online store
Having your own virtual store is, without a doubt, the best option for dropshipping in Mexico. And it is that as we saw before, when we talk about the disadvantages of dropshipping, there is a lot of competition. This makes marketplaces and social networks become showcases in which your product probably has to coexist with those of your competition.
With its own online store, you will have the power to display your products as you want, create promotions, customize every detail and the best: there will be no competing product.
2. Social networks
More and more Mexican entrepreneurs are encouraged to sell through social networks such as Instagram, Facebook and even WhatsApp Business. In fact, a recent AMVO study reported that 85% of SMEs in Mexico use social networks to sell online.
It is important to note that in order to use tools such as and the , It is essential to have a virtual store to redirect your customers and make transactions.
That is why social networks and online stores are a great dynamic duo, because while the former are responsible for attracting customers, the latter allow to simplify transactions.
3. Marketplaces
It is also possible , Amazon and others . Of course, it is important to consider the cost per transaction of the marketplace in which you are interested in putting the products for sale and evaluate if the profit margin is convenient.
Another important point to consider is the delivery time. If your provider were to be delayed, it could affect your reputation on the platform, because for the marketplace you are solely responsible for the sale. If you have your online store with Tiendanube, remember that you can integrate with marketplaces with .
Finally, do not forget that also there are marketplaces that are very useful for finding dropshipping providers. One of them, quite practical due to the number of mostly Asian sellers, is . It is worth reviewing it and finding options for your business.
How to dropship in Mexico in 7 steps?
- Choose a provider
- Choose your sales platform
- Define the price of your products
- Post your products
- Promote your products
- Create a flow for sending orders to the supplier
- Get update
1. Choose a provider
To start a business based on the dropshipping model, the first thing to do is . Consider the options we talked about earlier in this post, but also research other options in your industry and get in touch with them. Prepare a list of questions and do not hesitate to consult them to solve all your doubts.
As usual, a drop shipper legitimate requires delivery fees as well as a minimum order quantity. After choosing a supplier, it is advisable to sign a…
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