If you are a beginner in the online money-making world and you’re currently comparing dropshipping vs Ecommerce, here are a few scenarios where dropshipping will always be better than ecommerce.
- Dropshipping is much, much cheaper to start
- Traditional ecommerce is quite riskier compared to the dropshipping business model
- Dropshipping is simpler and requires less effort and time
On the other hand:
- If you want to enjoy much higher profit margins
- If you have the marketing skills to build a brand and scale infinitely
- Or if you have enough capital to start and sell branded products
In this case, eCommerce will be a much better business model for you.
Still, this is just covering the bare surface of this topic. If we really want to compare dropshipping vs ecommerce, we’ll need to dive in deeper, much deeper.
Dropshipping Fundamentals: How Does Dropshipping Work?
Both dropshipping and ecommerce are businesses where you sell various products to other people. That’s as simple as it can be described. However, when it comes to dropshipping, the main difference is that you do not need to buy, own, or store any inventory whatsoever.
The dropshipping fulfillment process works as follows:
- Choose a product to sell
- Find a good dropshipping supplier for it
- Build an online store using Shopify or other Shopify dropshipping alternatives
- Advertise your products
- Purchase them from the supplier one by one when you make a sale
- Pay the supplier their share and collect your dropshipping profits
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Ecommerce Fundamentals: How Does Ecommerce Work?
When it comes to eCommerce vs dropshipping, the traditional eCommerce way of doing business is to store large quantities of your products at fulfillment centers or a warehouse and ship them out whenever you make a sale online.
To sum up, here is how traditional eCommerce works compared to dropshipping in 2023:
- You buy or manufacture larger quantities of your product
- Store the product at a warehouse or fulfillment center
- Pack and ship each product whenever you make a sale on your store
- Your chosen delivery company sends the product to your customer
The Pros & Cons of Dropshipping
|Low-risk||It’s quite competitive|
|Low start-up cost||Lower margins than eCommerce|
|No need for storage space||You rely on your supplier too much|
The Pros & Cons of Ecommerce
|Much easier to brand and scale||Higher costs at the start|
|You’re more independent||Need for storage space|
|Higher profit margins||Order fulfillment can be costly and time-consuming|
Ecommerce vs Dropshipping: Main Differences and Similarities
Dropshipping and eCommerce are not the same things. Sure, they both involve selling products online. However, the way you go about doing business and processing orders is not the same between dropshipping vs ecommerce.
To clarify, this simple table below will show you the exact differences and similarities between dropshipping and eCommerce.
|Dropshipping requires no inventory storage while eCommerce does||Both are proven methods to make money online by selling products|
|eCommerce usually requires manual order fulfillment while dropshipping fulfillment is automated||Everything about creating the online store and the marketing side of the business is the same|
|With dropshipping, you have less control over the product quality compared to eCommerce||Every important principle about selling online can be applied to both types of business|
|eCommerce stores can have more control over delivery speed based on their warehouse location choice||The same branded dropshipping strategies can be applied to any eCommerce business|
|You can start a dropshipping store even without any investment up-front whereas eCommerce is a different story in terms of budget||Both businesses are customer-oriented and will need to focus on growing an online community of loyal customers|
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Dropshipping vs Ecommerce: How To Pick One?
So, how do you decide which type of business to run between eCommerce vs dropshipping? The answer is quite simple actually.
You don’t have to guess, you don’t have to think about which one will make you happier, or things like that.
All you have to do is look at the facts and the current state you are in. Ask yourself the following questions:
- Do I have my own product to sell that I can brand and grow for years to come? (Yes or No)
- Do I have plenty of money to risk without knowing if I will succeed? (Yes or No)
- Do I have enough time to manage a warehouse, fulfill and package orders, and run a big business? (Yes or No)
- Can I manage to allocate more than half of my time during the day to a new business? (Yes or No)
If the answer to most or all of these questions is Yes, then you are much better off starting an eCommerce business.
If the answer to most or all of these questions is No, then you will thank the gods for choosing to start a dropshipping business.