INFORMATION
Dropshipping vs Ghost Commerce: Understanding the Differences
What is the difference between ghost commerce and dropshipping?
While ghost commerce and dropshipping share some similarities, they also have some key differences. This article will explain the differences and similarities between the two.
Dropshipping: A Low-Risk Way to Start an Online Business
In recent years, dropshipping has become an increasingly popular way for entrepreneurs to start an online business. With the rise of ecommerce and the COVID-19 pandemic forcing many businesses to go online, dropshipping has emerged as a low-risk, low-cost way to sell products online without having to invest in inventory upfront. In this article, we'll explore what dropshipping is, some common dropshipping platforms, and how it compares to the term "ghost ecommerce."
What is Dropshipping?
Dropshipping is a business model in which a retailer (often called a "dropshipper") sells products online without keeping inventory in stock. Instead, the dropshipper works with a third-party supplier (often a wholesaler or manufacturer) who stores and ships the products directly to the customer when an order is placed. This allows the dropshipper to focus on marketing and sales, without having to worry about inventory management or shipping logistics.
Here's how dropshipping works in practice:
The dropshipper sets up an online store using an ecommerce platform such as Shopify, WooCommerce, or BigCommerce.
The dropshipper finds a supplier who offers the products they want to sell. The supplier might be a wholesaler, a manufacturer, or another retailer who offers dropshipping services.
The dropshipper lists the supplier's products on their online store, along with product descriptions, prices, and images.
When a customer places an order on the dropshipper's store, the dropshipper purchases the product from the supplier, usually at a discounted wholesale price.
The supplier ships the product directly to the customer, with the dropshipper's branding and return address.
The dropshipper profits from the difference between the retail price they charged the customer and the wholesale price they paid to the supplier.
Common Dropshipping Platforms
As mentioned earlier, dropshippers typically use ecommerce platforms such as Shopify, WooCommerce, or BigCommerce to set up their online stores. These platforms offer a range of features and integrations to make it easy for dropshippers to manage their online businesses. Some common features of these platforms include:
Website builder: A drag-and-drop website builder that allows dropshippers to create and customize their online stores without needing any coding skills.
Payment processing: Integration with payment gateways such as PayPal, Stripe, and Square to allow dropshippers to accept payments from customers.
Inventory management: Tools to help dropshippers keep track of their product inventory, including stock levels, product variants, and SKUs.
Order management: A dashboard to manage and track customer orders, including order fulfillment, shipping tracking, and customer communication.
Marketing integrations: Integration with marketing tools such as email marketing, social media, and SEO to help dropshippers drive traffic and sales to their online stores.
The Term Ghost Ecommerce
Recently, there has been some discussion in the ecommerce community about a new term called "ghost ecommerce." While there is no widely agreed-upon definition of this term, it appears to refer to a business model that involves creating a digital brand and selling products online without holding inventory. This sounds similar to dropshipping, but with a greater emphasis on building a brand and creating a loyal customer base.
Ghost Commerce vs Dropshipping
While ghost commerce and dropshipping share some similarities, they also have some key differences. Here are a few of the main differences:
Branding: Ghost commerce places a greater emphasis on creating a strong brand identity, while dropshipping is more focused on selling products.
Inventory: Ghost commerce typically does not involve holding any inventory, while dropshipping involves working with a third-party supplier
Conclusion
In conclusion, dropshipping has become a popular way for entrepreneurs to start an online business without the need for large upfront investments in inventory and logistics. Common ecommerce platforms such as Shopify, WooCommerce, and BigCommerce offer a range of features and integrations to make it easy for dropshippers to manage their online businesses. While ghost commerce may share some similarities with dropshipping, it places a greater emphasis on branding and building a loyal customer base, and may require a higher upfront investment. Ultimately, the choice between dropshipping and ghost commerce will depend on an entrepreneur's goals and resources.