Introduction to Dropshipping Business Model in India
Before move to Dropshipping Business Model in India, let’s learn what is dropshipping business model.
The hindi meaning of dropshipping is “सीधी आपूर्ति”.
Dropshipping business is one of the well-established forms of business model in the world of Digital. The process and model itself make it easier for beginners to get started with business due to lesser investment required.
Giant ecommerce platform Meesho is leveraging dropshipping form of business model in India. Dropshipping model may seems to be new on internet space in India but when comes to its offline model it has been present in India for over 2 decades in my knowledge.
But biggest question is – what is dropshipping business model?
What is dropshipping business model?
To make it easier to understand, let’s get back to 1990s to understand the offline model of dropshipping business model in India.
Do remember the brand called Tupperware?
Tupperware came to India in 1996 and got very popular although it was mix of dropshipping and multi-level marketing business model but let’s talk about its drop shipping part.
Tupperware business was dropshipping business for many house-makers. How?
So, when someone becomes a member of Tupperware, they used to get a product catalogue where all the products were listed with product code. To the best I can recall, there was no price mentioned on the product rather, pricing table was mentioned in the end of catalogue.
These members/sellers of Tupperware have the right to decide the offer price of the product and give discounts to make the done-done deal for both the seller as well as the buyer.
These affiliates of Tupperware were free to create the combos and offerings subject to the price that they were offered by Tupperware itself to its affiliates.
What is dropshipping model in it?
Wait! It has not ended yet, now starts the explanation for Dropshipping Business Model in India by Tupperware!!!
So, these affiliates/sellers of Tupperware product were not required to keep all the stock with them. They used their network to sell Tupperware products and it was upto the affiliate of Tupperware to decide on whether they want prepaid payment or postpaid payments.
To be on safer side, these affiliates used to accept prepaid payments which helped them making their operations smooth.
Once the order was confirmed by the customer these affiliates used to give a tentative date of delivery and after they particular number of orders or when date of delivery is near, they used to go to Tupperware outlets to get the products and then deliver the orders to their customers.
Hence, dropshipping is a form of retail business where seller doesn’t keep the stock with them.
This was pure form of dropshipping business model in India as the seller doesn’t need to stock the products while selling where,
- – Seller aka Member aka Affiliate is Dropshipping Company
- – Tupperware is Dropshipping Supplier
Tupperware didn’t stop here they applied warehousing concept as well.
Now if the seller or dropshipping company here finds the product is hot selling and was confident that they can sell certain units then they used to stock for faster delivery.
Apart from this when seller develops its network and number of units are scaled to a certain level not just this but have a wider chain of sellers under them then Tupperware helped these sellers to setup an outlet for them so they profit margins also increase, number of stores increases and stock can move faster.
It is not just Tupperware which enabled dropshipping model in India, apart from it was AVON – the make-up brand, Amway – the FMCG brand and many more which helped individuals setting up their dropshipping business model.
Shopify has explained the dropshipping model with this beautiful diagram:
What is difference between eCommerce and Dropshipping in India?
In today’s context, dropshipping is one of the models in eCommerce. eCommerce is an umbrella term where one stream is dropshipping and is new in India when it comes to online space.
The major difference between usual form of eCommerce business and the Dropshipping eCommerce business in India is of the stocks. In usual form of eCommerce business, the seller has to keep the stock with them and manage everything on their own be it acquisition, logistics, marketing, etc.
Whereas in dropshipping ecommerce store the seller doesn’t keep the stock with them and take the help of various fulfillment services or suppliers to fulfill their orders.
How to start your Dropshipping Business in India?
It is very easy to start your Dropshipping Business in India, subject to you find a good supplier. Currently there are few dropshipping suppliers in India.
To start your Dropshipping store in India you need:
- 1. Online Catalogue – First and foremost thing required to get started with a dropshipping business store in India is link to your store. It can be a WhatsApp Catalogue, Shopify store, WooCommerce store, or any other online catalogue services.
- 2. Payment Partner – The next important thing to run your business store smoothly in India you need a great payment partner for your dropshipping store which can easily accept payments from your customers
- 3. Source of Traffic – The utmost important thing to flourish your online dropshipping store you need a great source of traffic that can convert. It can be your network or you can utilize different advertising platforms as per your product and niche.
- 4. Supplier – Last but not the least is dropshipping supplier in India. It is not easy to find dropshipping supplier in India that too good one. But still, I will recommend some dropshipping suppliers in my next post.
Can we do Dropshipping on Amazon.in?
Yes, now it is possible to get started with Dropshipping on Amazon India.
If you are following all the policies correctly for dropshipping on Amazon then you can easily make good money online from dropshipping the products.
Below are important highlights from Amazon dropshipping policies for India:
- Drop shipping, or allowing a third-party to fulfill orders to customers on your behalf, is not acceptable unless it is clear to the customer that you are the seller of record.
- Purchasing products from another online retailer and having that retailer ship directly to customers, if the shipment does not identify you as the seller of record or if anyone other than you (including the other online retailer) appears on packing slips, invoices, or external packaging, it is strictly prohibited without exception; or
- Shipping orders with packing slips, invoices, external packaging, or other information indicating a seller name or contact information other than your own is also strictly prohibited.
Clarification by amazon on these policies: Any time a customer sees packaging, invoices, or receipts identifying a seller that is not either you or Amazon it creates confusion for the customer about how their order is being fulfilled and whom they should contact with any problems or questions.
If above mentioned are violated then Amazon may out a restriction of your ability to sell using Amazon’s Merchant Fulfilled Network (MFN).
Some Do’s mentioned by amazon while dropshipping
If you intend to fulfill orders using a drop shipper, you must always:
- Have an agreement with your supplier that they will identify you (and no one else) As a seller of your products on all packing slips, invoices, external packaging, and other information included or provided in connection with the products;
- Remove any packing slips, invoices, external packaging, or other information identifying a third-party drop shipper prior to shipping the order;
- Be responsible for accepting and processing customer returns of your products; and
Comply with all other terms of your seller agreement and applicable Amazon policies.
To get started with dropshipping in India you can click use this link.
If you have any questions about Dropshipping Business Model in India, then please feel free to get in touch.