What Is a Dropshipping Business, And How to Start One in the Philippines?

One of the reasons why some Filipinos delay starting an online business is the perceived hassle of running one. There’s the sourcing of products, order fulfillment, delivery, customer management, and many other logistics involved.

Enter dropshipping.

A unique online selling business model in which ecommerce entrepreneurs sell products without having to carry any inventory. You don’t have to worry about order fulfillment, inventory, or logistics since it’s all passed on to a third-party supplier. Instead, when a store owner receives an order from a customer, they simply contact the dropshipping supplier, who will then ship the products directly to the customer’s door.

A dropshipping business is the perfect business model for new ecommerce entrepreneurs in 2022 and beyond. It’s simple to set up, manage and doesn’t require a significant up-front investment.

You can also run your dropshipping business in your spare time, so you don’t need to quit your job to run it.

If this sounds like an exciting business model for you, read on as we’ll cover six tips on running a dropshipping business online in this article:

 

1. 1. The Pros and Cons of Dropshipping
   2. Why are more Filipinos dropshipping
   3. How to Start a Dropshipping Business in the Philippines
   4. What You Need to Get Started
   5. Promoting Your Store and Driving Traffic
   6. Additional Tips to Make Dropshipping a Success

So let’s get started!

 

The Pros and Cons of Dropshipping 

Before committing to start a dropshipping online business, we first need to decide whether it is right for your entrepreneurial journey. And the best way to do that is by listing down some of the benefits versus the shortcomings of this particular business model.

After all, like any business model, this is not meant to be a get-rich-quick scheme. Instead, if you want to be successful in running a dropshipping online business, you must maintain proper business protocols and leverage the right marketing tools and assets.

Let’s start by looking at the benefits.

 

The Benefits of Dropshipping

 

• • Easy to set up and manage, making it perfect for new entrepreneurs.
  • You don’t need to worry about order fulfilment, inventory, or logistics, as a third-party supplier takes care of these.
  • You can run your dropshipping business in your spare time, so you don’t need to quit your job.
  • There is no significant investment required to start a dropshipping business online.
  • The potential for profitability is high as you only need to make a small profit on each sale to cover your costs and make a healthy return on investment.
  • Dropshipping offers flexibility as you can choose the products you want to sell from any supplier.

 

The Cons of Dropshipping

 

• • While the potential for profitability is high, you will have to deal with lower profit margins since the bulk of profits goes to your supplier.
  • There is a tremendous potential for product sourcing errors since you’re not dealing with the products yourself, leading to possible customer dissatisfaction.
  • You may find it challenging to scale your business if you don’t have the time or resources to do so
  • You are at the mercy of your suppliers and need to build good relationships with them, as you have no control over the entire supply chain.
  • You need to invest time and effort into marketing and promoting your store
  • It is challenging to build and grow a brand, especially if you don’t have the right tools to help you do proper customer management

 

Why Are More Filipinos Moving into Dropshipping?

Given the many pros and cons, it is no surprise that more Filipinos are interested in dropshipping.

It is easy to start a dropshipping online business. You don’t need to carry any inventory or invest massive capital into the business. Plus, you can do it in your spare time.

Instead, it is a great way to learn more about online selling, marketing and growing a business without the drawbacks of having to worry about fulfillment. And as you may have already guessed, it is a popular online business for students looking to raise cash on the side.

 

How to Start a Dropshipping Business

That said, there are several things to note when starting a dropshipping business.

There is a natural tendency among new entrepreneurs to rush and sell the first product they find online. But it’s important to remember that as a dropshipper, you’re entering into a business partnership with a supplier.

This means you should take your time to research suppliers to ensure you are comfortable working with them. Since you’re dealing directly with customers, your brand image and reputation will also be on the line. So, you want to be sure your products are of decent quality.

Here are some questions to ask yourself when deciding whether to work with the supplier:

 

• • How long have they been in business?
  • What is their return policy?
  • Do they have a good range of products to choose from?
  • What are the shipping times and costs?
  • How do they update their inventory?
  • What is their customer service like?
  • Do they have any negative reviews?

Once you’ve found a good niche and a supplier who you’re confident of, the next step is to think about your marketing plan and strategy. You need to consider how you can drive traffic to your store and generate sales. For this business aspect, marketing is the key to success.

There are various ways to market your store. But it’s important to remember that not all methods will work for every niche. So, you’ll need to experiment a little to see what works best for your dropshipping online business.

What You Need to Kickstart Your Dropshipping Business

Once you’ve successfully identified the type of dropshipping business you want to operate, as well as selecting your suppliers, we can move on to the next step – setting up an online store.

Dropshipping can be considered as a type of ecommerce business. This means you will need a website and, more specifically, an ecommerce platform to facilitate your business in terms of product presentation and sales.

The good news is that’s about all you need to get started with your dropshipping business online.

In the past, building an ecommerce website was a costly affair. But with the advancement of technology today, there are plenty of website builders and even free online store builders you can use to launch a beautiful online store.

One such app is Shopboxo, which allows you to build your entire ecommerce ecosystem for free. With just a few clicks of the button on your mobile phone, you can launch a beautiful and professional looking online store where you have full control of the design, store layout, payment gateways, delivery methods and much more.

So there’s really no reason why anyone can’t run their own dropshipping business online today.

 

Promoting Your Store and Driving Traffic

Once your store is up, you must start promoting it to drive traffic. There are many ways to promote your store, but the most effective way is to tap onto social media. It helps to create brand awareness and in turn, drive traffic to your store.

Here’s a list of ideas and ways to promote and gain more web traffic to your online store:

 

• • Use social media platforms such as Facebook, TikTok, and Instagram to create brand awareness.
  • Use online advertising platforms such as Google AdWords, Bing Ads, and Facebook Ads to target potential customers.
  • Collaborate with other businesses in your industry to cross-promote each other’s stores.
  • Develop an SEO strategy to improve your website’s ranking in search engine results pages for organic reach.
  • Write blog posts about your products and post them on popular blogging platforms such as WordPress and Tumblr.
  • Create videos about your products and post them on video-sharing websites like YouTube, Vimeo and TikTok.
  • Offer discount codes and coupons to encourage potential customers to make a purchase.

 

Additional Tips to Make Dropshipping Online Business a Success

Here are some final tips to make sure your dropshipping business a success:

Choose the right products: Not all products are created equal. There will be some that sell better than others. Hence, it’s essential to conduct your research and find products that are in demand and have a good profit margin.

Find a niche market: Trying to accommodate to everyone’s a recipe for disaster. Instead, you should find a niche market and focus on catering to their unique needs and demands.

Build a brand: A strong brand will help you stand out from competition. Create a unique brand identity and ensure all your marketing materials reflect that.

Offer good customer service: This is one of the most important factors you should do to ensure repeat customers. Offer good customer service and try to resolve any issues they have as quickly as possible.

Pricing: Make sure your prices are competitive but still offer a good profit margin.

Keep your inventories updated: One of the biggest challenges in dropshipping is updating your inventories. Make sure you have a system to track your inventory levels and update them accordingly.

You need to keep these things in mind when starting a dropshipping business online. Do your research, plan ahead, and be prepared for some trial and error.

With some effort, you can be running a successful dropshipping online business in no time.

Top 5 Dropshipping Websites in the Philippines

To help with some research, below is the list of the top five dropshipping websites in the Philippines, based on their brand reputation and site popularity.

 

1. 1. AliExpress – A well-known dropshipping platform and is a separate marketplace under Alibaba. The website offers a wide range of products at very competitive prices. It has a user-friendly interface coupled with global shipping options, making it a popular choice for Filipino entrepreneurs, where your potential customers are not only restricted to within the Philippines.

 

2. 2. Oberlo – A dropshipping platform that has integration with Shopify. Similar to AliExpress, it offers a wide selection of products, as well as useful tools that can help business owners to manage their orders and track their shipments directly. It also has other features such as product data, multi-language capabilities and your product listings can be customisable.

 

3. 3. SaleHoo – Considered as a wholesale suppliers directory while also offering tools to help business owners manage their dropshipping online business. You can rely on it to source for high-quality products with its extensive supplier directory.

 

4. 4. Spocket – A platform where its product sources are from the US and European suppliers. It is popular amongst Filipinos, both business owners and buyers, who are looking for products that do not originate in the Philippines.

 

5. 5. Wholesale2B – Apart from offering a wide range of products, they have integration with eBay and Amazon. It has a user-friendly interface, while product information is well-detailed,  making it a popular choice for Filipinos.

While these are the five most popular dropshipping websites in the Philippines, there are still many other different dropshipping stores available, where each has its own pros and cons based on the site’s features. Business owners who are looking to dabble into this space should do their due diligence to conduct proper research. You should also run a comparison between these platforms to identify the most compatible ecommerce store builder that is able to meet your demands and goals of starting a dropshipping online business online.

 

Frequently Asked Questions About Dropshipping

Is Dropshipping Business Profitable?

Dropshipping can be profitable, but it’s not a get-rich-quick scheme. You need to invest time and effort to build and scale up your dropshipping online business.

Is It Legal To Dropship?

Dropshipping is legal, but there are restrictions on what you can and can’t sell. For example, you can’t dropship products that are illegal in your country. And you need to be careful about sourcing products from suppliers who engage in unethical or illegal practices.

What Do You Do As A Dropshipper?

Dropshippers are responsible for running their own online store. They need to promote it in order to drive traffic. The more traffic they generate, the higher chance of gaining sales, resulting in more profits.

What Does it Take to Start a Dropshipping Business?

Starting a dropshipping business is relatively easy and doesn’t require a lot of upfront investment. You only need a domain name, web hosting, and an online store builder like Shopboxo. You’ll also need to form partnerships with suppliers. Once you have all these things in place, you should be good to start your dropshipping business online.