Dropshipping in the Philippines: How Does It Work?

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Dropshipping. Anyone who has ever looked into starting an online business has probably come across this term. However, not everyone actually understands how it works. To someone who is new to the online business world and are looking to break into the eCommerce industry, the dropshipping process can seem a little daunting. 

If you’re looking for a definitive guide to dropshipping in the Philippines, you’re in the right place! This article covers everything you need to know – from its meaning, how this business model works, its benefits, and how you can start a successful dropshipping business. Let’s get started! 

Dropshipping Meaning: What Is It?

Dropshipping is a type of retail fulfillment method where a company doesn’t keep the products it sells in stock. Instead, when a store sells a product using the dropshipping business model, it buys the items from a third party and has it shipped directly to the customer – the seller doesn’t have to handle the product directly. 

The biggest difference between the standard retail model and dropshipping is that the seller doesn’t own or stock inventory. Instead, the seller buys inventory as necessary from a third party – usually a manufacturer or wholesaler – to fulfill orders. 

Here’s a quick overview of how dropshipping works:

  1. A customer places an order from your online store.
  2. The seller manually or automatically forwards the customer and order details to the dropship supplier. 
  3. Your dropshipping supplier prepares and packages your customer’s order.
  4. Your dropshipping supplier ships the order directly to your customer. 

This kind of business model is very attractive as it eliminates the need for the store owner to have a brick-and-mortar business location such as a warehouse or office space. Instead, all they need is a computer/laptop and an internet connection. 

Benefits of Dropshipping

As a business model, dropshipping offers numerous benefits. 

  • It’s easy to set up.
    You don’t need to be a business expert to get started. In fact, prior business experience isn’t necessary! If you take some time to learn the basics of dropshipping, you can get started quickly and learn the rest as you go along. To someone who’s new to the ecommerce industry, the dropshipping business model is relatively easy to understand and implement. 

  • It’s easy to scale.
    As you scale your dropshipping business, your business model doesn’t have to change all that much. Sure, you’ll have to put more effort into marketing and sales as you grow, but your day-to-day will stay essentially the same. 

  • It doesn’t require that much capital.
    Since starting a dropshipping business doesn’t require much capital, you can get started with minimal funds. You can build your entire dropshipping business from your laptop, and you don’t have to make any high-level investments. Even as your business expands, your costs will be relatively low – particularly when compared to traditional business costs. 

  • It’s easy to manage. Dropshipping doesn’t require you to make many commitments – you can manage everything with little hassle. Once you’ve found dropshipping suppliers and set everything up, you’re mostly responsible for running your online storefront. 

  • It requires low overhead expenses.
    Because you don’t have to deal with managing a warehouse or purchasing inventory, your overhead expenses are quite low. In fact, many dropshipping stores are run as home-based businesses, needing little more than a computer/laptop and a few recurrent expenses to operate. As you scale, these costs will likely increase, but is still comparably low compared to traditional brick-and-mortar businesses.
     
  • It can be operated from anywhere.
    You can operate your dropshipping business from just about anywhere! No warehouse, no employees, no office, and no hassles. Little to no commitment to a physical space means that you could be sitting at home, relaxing on your favorite couch while still turning profits. All you need is your laptop and the internet. As long as you can easily communicate with your customers and suppliers, you can run and manage your dropshipping business. 

Steps to Start Dropshipping in the Philippines

Want to start a dropshipping business in the Philippines? ( Contact us if you are interested to start an online dropshipping reseller business. )

Here’s how.

  1. Choose a niche.
    The niche you choose needs to be focused and something that you’re truly interested in. A product range that isn’t focused will be hard to market. Plus, if you’re not passionate about the niche you choose, you’ll be more prone to becoming discouraged, because it takes a lot of work to successfully scale a dropshipping business.

  2. Choose the right products.
    Even if you know what niche you’re going to be entering, you might no idea of which products you should offer. Ultimately, your audience will decide which products you should carry. You’ll need to consider what your target audience is looking for and offer products that meet their needs.

  3. Secure a supplier.
    Partnering with the wrong supplier can ruin your dropshipping business, so it’s important that you don’t rush this step. Do your research. If you’re looking for reputable dropshipping suppliers in the Philippines, some of best in the industry are: Lazada, AliExpress, Alibaba, and Chinabrands.com.

  4. Choose a sales channel.
    The sales channel is another key element to a dropshipping business – it’s the platform you’ll use to sell your products. This can be a Shopify store, a seller account on a marketplace website like BigBuyBay, eBay, or your own dropshipping website. If you want, you can use multiple sales channels, but you’ll have to manage all the different responsibilities and tasks. In most cases, this isn’t too difficult, but if you’re just starting out, you might want to focus on one sales channel for now.

  5. Marketing.
    After you establish your dropshipping business, find a supplier, and start making sales, you’ll want to get the word out about your new online storefront. Carefully planned marketing strategies are crucial to ensure the success of any dropshipping business, as its marketing that drives traffic – and thus, sales – to your online store. The good news is that there are a lot of low-cost marketing strategies available, and you don’t have to hire a marketer to get started.

Final Thoughts

Starting a dropshipping business can be cheaper, easier, and more profitable than traditional retail models. That said, this business model comes with its pros and cons, and just like any other entrepreneurial endeavor, it requires a certain degree of effort, passion, and commitment to make it work. It’s not just about creating the business – it’s also about following through and learning how to run it on a day-to-day business.

Contact us if you are interested to start an online dropshipping reseller business.

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