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Dropshipping vs Ecommerce: What’s the Difference and Where to Start?

Martin

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.

  1. Dropshipping is much, much cheaper to start
  2. Traditional ecommerce is quite riskier compared to the dropshipping business model
  3. Dropshipping is simpler and requires less effort and time

On the other hand:

  1. If you want to enjoy much higher profit margins
  2. If you have the marketing skills to build a brand and scale infinitely
  3. 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:

  1. Choose a product to sell
  2. Find a good dropshipping supplier for it
  3. Build an online store using Shopify or other Shopify dropshipping alternatives
  4. Advertise your products
  5. Purchase them from the supplier one by one when you make a sale
  6. Pay the supplier their share and collect your dropshipping profits

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 2022:

  1. You buy or manufacture larger quantities of your product
  2. Store the product at a warehouse or fulfillment center
  3. Pack and ship each product whenever you make a sale on your store
  4. Your chosen delivery company sends the product to your customer

The Pros & Cons of Dropshipping

ProsCons
Low-riskIt’s quite competitive
Low start-up costLower margins than eCommerce
No need for storage spaceYou rely on your supplier too much

The Pros & Cons of Ecommerce

ProsCons
Much easier to brand and scaleHigher costs at the start
You’re more independentNeed for storage space
Higher profit marginsOrder fulfillment can be costly and time-consuming

Ecommerce vs Dropshipping: Main Differences and Similarities

dropshipping vs ecommerce

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.

Differences Similarities
Dropshipping requires no inventory storage while eCommerce doesBoth are proven methods to make money online by selling products 
eCommerce usually requires manual order fulfillment while dropshipping fulfillment is automatedEverything 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 eCommerceEvery 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 choiceThe 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 budgetBoth businesses are customer-oriented and will need to focus on growing an online community of loyal customers

Dropshipping vs Ecommerce: How to Choose?

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.