E-commerce and dropshipping model

Do you want to create an e-commerce for your business, but you don’t know how to start? In this post we are going to learn about the most popular e-commerce models. From the online shop, the marketplace or social media commerce to more innovative options such as the dropshipping model, in which it is not necessary to have the product in stock to sell it.

Setting up an online shop can be a challenge, so it is important that you consider the different platforms that are available to launch your online business.  The choice will depend on the needs and objectives of your SME.

There are multiple ways, choose the best option for your SME.

1. Online shop

If you are looking for management and control of the entire sales and customer service process, as well as having your own space on the Internet, the best option is to develop your own online shop. You can create it from scratch, as a new website, or you can develop a specific section on your existing website.

In both cases, from this site, your customer will be able to purchase your products or services online and you will be responsible for the design, implementation, management and maintenance. 

Some examples of online shops: KPS Group (Retail), 40grados or Conservas Dani.

2. Marketplace

Platforms such as Amazon or Aliexpress are online shops called marketplaces. What is a marketplace? It is a platform managed by a third party, on which your SME and other companies offer their products or services in one or more categories.

The marketplace provides you a platform or container where you only have to upload the products you want to sell. It simplifies the transformation process of a business because issues such as the development, maintenance and management of the online shop are carried out by the marketplace owner.

When using this type of e-commerce, it is important to keep in mind that your product is not the only one in that category as you are competing with other brands on the same platform. Your customer has the option to buy from your competitors in just one click.

3. Social media commerce

Another option is to use social media commerce. This is an emerging platform because, if there is one thing that is certain, it is that you will find your customer on social media. Facebook or Instagram have started to introduce the purchase option directly from their platforms.

This model allows you to have a global reach at low operational costs, as well as being present where your customer spends most of their time. However, there are still some challenges to consider, such as the absence of personal contact, technical issues that may arise or how to ensure data security.

Nevertheless, social media commerce offers your SME a new window of opportunity, allowing you to multiply your number of customers with a simple click.

4. Dropshipping model.

It is a thriving business model that, according to Forbes, is expected to have a global growth of more than $557 billion by 2025. In this model, the person or company that sells online does not have the product during the entire purchase process.

Let's make an assumption. Imagine that you launch your SME with the dropshipping model. The first step would be to choose your suppliers. Then you would create an online shop as a showcase, check that the delivery is carried out correctly and that your customer is satisfied. You don’t have to prepare the orders and ship them, because the product is stored by your supplier and shipped directly to your customer.

This allows you to offer a wide variety of products, save stock costs and, in many cases, logistics costs. In addition, it requires less initial capital and the location is more flexible. It is also important to highlight that because of the nature of the model, there may be problems with products or shipments, or other types of errors that may come up due to lack of knowledge of the supplier's stock.

The key to ensure the success of your dropshipping business will be to focus your efforts on a good choice of suppliers and excellent customer service.

Some companies that enable this e-commerce model are Shopify or Alidropship.

Reinvent your SME business and respond to the needs of the Digital Age.

The great thing about all these e-commerce models is that they are not irreversible or mutually exclusive, but depending on the specific needs of your SME, you can introduce the one that suits you the best. Nowadays, many businesses combine several models at the same time to maximise the diffusion and increase the awareness of the brand. Make it more visible and consolidate the position of your SME in the market.