Selling on the Internet without having stock or worrying about where to store your products... is it really possible?
Or, what’s even more important, is it economically viable?
It is not only possible, but in this post we are also going to explain how you can do it yourself. Get ready, because today at Doofinder we’re going to tell you everything you need to know about dropshipping and affiliate selling.
Let’s create a store without stock.
What’s an online shop without stock?
When someone thinks about managing an e-commerce, they usually think of the online version of a normal shop. Clients pay you for a product and you send it to them.
But, as we told you in this post, the Internet has promoted the creation of other types of virtual shops. And among them you can find this type of e-commerce.
The key to these businesses is that you only act as a distributor. You just need to focus on sales and marketing.
And how can I sell on the Internet without having the product?
There are two ways of developing this type of business. While the first one is based on a dropshipping system, the second one lies with affiliate marketing.
We’ll explain both options:
Dropshipping shops: you work with a supplier who allows you to sell products from his/her catalogue. When someone makes a purchase, it is the supplier who ships the product.
Affiliate shops: by being an affiliate, what you do is recommend other people’s products on your website. Then, you get a commission when someone buys something.
With both options you can forget about everything related to stock, packaging and shipping. You only have to focus on the most commercial aspect.
However, the two systems, although stemming from the same base, work in a very different ways.
How does a dropshipping shop work?
Dropshipping is a type of online shop in which you work closely with a supplier. In short, the process is the following:
1. You choose the products to be sold
The first thing you have to do before starting any business is market research. This will help you to choose the area you want to focus on and it will tell you who your clients are going to be.
Once you have decided that, you have to pick the most attractive products. Don’t make the mistake of thinking about just the price — also value the existing demand and whether there are related products.
Now it’s time to look for a supplier (who agrees to do dropshipping) to ship the products that you have selected.
2. Choose the ideal supplier or dropshipper
This is a very important step since you are choosing your business “partner”. Bear in mind that a lot of things will depend on them, the most important ones being these 3:
Efficiency in shipping management
Before choosing a dropshipper, it is advisable to gather all the possible information you can about them. It would also be good to buy some of his products beforehand to check the quality.
If you want to learn more about how to choose your supplier, read this post.
3. Upload the products to your website
After having chosen your dropshipper, you can now upload the products from their catalogue to your website. But, be very careful when doing this.
Your supplier will send you the product descriptions in case you want to upload them as is. And that would be a serious mistake.
You are not their only client, which means that there may be many other shops with the same product descriptions. Besides giving your business a terrible image, it will destroy your SEO positioning.
Google will see that all the texts are the same and will treat them as duplicate content.
And you’d more or less be asking to get penalized.
4. Start selling
What happens when a person buys something? It’s very easy. You get in touch with the supplier and you inform them of the sale.
This will also be the moment when you pay for the product. It is very important because it means that you only pay the supplier when a product is sold.
This way, you avoid the initial investment of buying the products beforehand.
5. The product is sent
Once the payment is completed, the dropshipper will take care of managing the packaging and the shipping.
At the beginning, it is really important that you make sure that the shipping times are met and that the products properly get to the client. Don’t underestimate this point since a bad delivery can mean losing the client and future sales.
How does an affiliate shop work
Affiliate marketing is a system in which you recommend products that other people sell. The biggest difference between this way of selling without stock and dropshipping is the word that we have used: “recommend”.
You will talk about the product’s benefits and why someone should buy it. But when the client clicks the buy button, the final transaction will take place on the supplier or shop’s website.
Here you have a more in-depth explanation to better understand how the process works.
1. Whose products are you going to sell?
As with dropshipping, before starting any business you should carry out some market research and choose the area and the audience that you are going to deal with.
After that, you have to decide what you are going to sell. You have several options:
Selling specific products from a company: there are no intermediate parties since you get the commission from the company itself. You can also sell other products.
Affiliation platforms: there are websites which connect you to brands or companies that want other people to add their products. You can access products from different categories and prices from them. Here you have the links to some of the most well known ones: ShareASale, Zanox or Commission Junction.
Affiliates programs: Amazon is the best one, it is the biggest affiliate platform that exists. If you work with them, you can recommend any of their products.
Choosing one option or the other depends on many factors. However, if it’s going to be your first experience with affiliate marketing, we recommend you start with Amazon. Working with them has two big advantages:
The customer service is very good.
There are products from almost any category you can think of.
The big disadvantage is that the commissions are normally pretty low. If you want to find out more about them, just click here.
2. What is the affiliate sales process like?
Imagine that you already have your shop with the products that you’re an affiliate for. It doesn't matter if it’s with amazon, a platform, or a company — they all use the same system.
Someone enters your shop, they like a product, and they click the button to buy. This button will direct them to where the product is actually sold. It is there that the payment will be processed.
This can raise two questions:
How do they know I was the one who sent the client?
When do I get paid?
The first question has a very easy answer: everything works thanks to links. The links that you add to the buttons are special (they are linked to cookies) and they allow the company to identify where clients come from.
Regarding payment, it is more difficult to give just one answer since each platform works in a different way. While some of them pay after 30 days, some others may do it after 60.
It is also important to check whether you need to have a minimum of sales or earnings to get paid.
Dropshipping vs. Affiliate Shops: which is better?
Which system is better?
As always, it depends on your circumstances. So that you can better decite which one fits you better, we are going to sum up the pros and cons of each option.
Advantages and disadvantages of dropshipping
Aside from the benefits that selling online without having stock, this system also has some additional interesting points.
Zero worries about storage, packing, or shipping.
The supplier will send you all the information you need.
You only pay for items that you sell.
You offer more credibility and confidence.
You decide the final price.
You depend a lot on how your supplier works.
The margins are normally very low.
Sometimes suppliers contact the clients directly.
As you can see, the success or failure of this system depends mostly on finding the right supplier.
Advantages and disadvantages of affiliate shops
For many people, the affiliate system is the “perfect” one, but you shouldn't be too confident. As with any other strategy, you should always look at both sides of the coin.
Besides forgetting about storage, packaging, and shipping, you don’t even have to manage the payments.
Technically, it is easier than Dropshipping.
With just one supplier, you can sell many products.
The fact that the payments are processed on a different page generates mistrust.
The final price is decided by the shop.
You have to wait to get paid.
Very low commissions.
The big secret to affiliate marketing is that you foster confidence. On the Internet, there are thousands of shops that offer the same products. Any unconvincing detail will make the client run off and buy from a competitor.
Are you ready to sell online without stock?
Now that you have all this information, you just need to do one thing: get to work.
Carry out some market research, find out the products to sell, and choose the system that fits you the best.