It’s easier than ever to set up a business thanks to the internet, but that doesn’t mean finding the right structure is simple. As far as online businesses go, there are two main types: regular eCommerce and dropshipping. But, what solution is right for your needs?

Let’s take a look.

What is eCommerce?

eCommerce is an umbrella term that describes a business that sells goods or services online. Most eCommerce businesses belong to the retail industry, but you can find companies that sell just about any item or amenity. Most eCommerce businesses follow a “traditional” format. You can streamline your business with these ecommerce automation tips.

A traditional or general eCommerce store will utilize a well-planned supply chain that they hire and manage themselves. They typically buy their own warehouses, products, and stores to offer their solutions to the public, and they’ll sell out of their own site, third-party sites, or both.

What is Dropshipping?

Dropshipping is a type of eCommerce that doesn’t need a physical store to sell products, but they will need suppliers to package, ship, and deliver their products. While dropshippers have to manage their own website, marketing, and customer service, they never touch their products.

Since company owners don’t have access to the products they sell, they use dropshipping automation software, like SparkShipping, to contact their suppliers and manage order routing. Unless you tell your customers or clients, they’ll have no idea you’re a dropshipping company.

How to Know if eCommerce is Right for Your Business

eCommerce represents the new way of shopping. In the future, the majority of businesses will have an online component, so it’s in your best interest to opt in as soon as possible. If you already have a physical storefront, the switch to an online store will be especially easy.

With an online store, you can showcase more trendy items. If you own a brick-and-mortar store, you’re limited to the square footage of your shop, but a virtual marketplace has no limits.

Finally, an online store is cheaper to run, as shopping malls often gouge their tenants. Online, you’re able to sell to more people and cut down on employment costs. A fair number of your daily eCommerce website tasks can be completed by freelancers or remote employees and you can contract a company like https://redstagfulfillment.com/order-fulfillment/ to handle order fulfillment.

What are the Drawbacks of eCommerce?

It’s clear that regular eCommerce is more suited for brick-and-mortar shops, but if you’re unfamiliar with order processing, distribution, and running a website, that can be a challenge. It’s also difficult to plan a growth strategy, as eCommerce sites can explode in popularity overnight.

How to Know if Dropshipping is Right for Your Business

Dropshipping businesses are more suited for startups that don’t already have a physical location or inventory. Since you don’t need to work out of a physical storefront or send stock out, you could run a dropshipping business from your bedroom. This will save you money and time.

What’s more, the onus isn’t on you to keep your stock up, meaning you don’t have to conduct store checks. You also don’t have to hire or pay for staff (unless you want a web developer).

The absolute best part of owning a dropshipping company is your global reach. With a regular eCommerce business, you’re limited to the number of manufacturing facilities you own. A dropshipping business can expand to the far reaches of the earth if they have the right supplier.

What are the Drawbacks of Dropshipping?

Since you’re not handling your own stock, quality control can be an issue. It can also make returns and refunds a nightmare, as you may have to pay out of pocket for some items. If you research your suppliers ahead of time, you can avoid costly errors and unhappy customers.