While the principle of dropshipping is simple — you don’t need to pay for inventory before selling it — many people are confused about many aspects of starting an online dropshipping store. 

If you’re interested in the dropshipping business model and are tinkering with the idea of running your eCommerce business without any significant startup capital, this dropshipping FAQ will answer all the questions you might have about this popular business model. 

Dropshipping for Beginners FAQs

1. What is dropshipping and how does it work?

2. What are the benefits of dropshipping?

3. Is dropshipping legal?

4. Is dropshipping a profitable business model?

5. Is it necessary to have a registered business for dropshipping?

6. How much money can you make dropshipping?

7. What are some common issues with dropshipping?

8. Is fraud something to worry about with dropshipping?

9. How to make sure the dropshipping products customers order are in stock?

10. How to find dropshipping suppliers?

11. Why start dropshipping with Modalyst?

12. What kind of products are available through Modalyst?

13. What are the main benefits of using Modalyst for dropshipping?

14. What platforms does Modalyst integrate with?

15. How much does it cost to start dropshipping with Modalyst?

16. Is Modalyst customer support good?

1. What is Dropshipping and how does it Work?

To put it simply, dropshipping is a business model that doesn’t require a store to keep the products it sells in stock. Instead, the online retailer purchases the products from a third party supplier and has it shipped to the customer, but only after the customer has made a purchase. This means that the store owner never handles the actual product. 

The dropshipping business model works based on having a low start-up cost, and it eliminates the risks and costs of holding inventory completely. This doesn’t mean that it’s an easy business to succeed in, as it still requires day-to-day management. It is definitely not a get-rich-quick scheme, but it can be quite profitable with hard work. 

Drop shipping comes with lots of challenges as well, ranging from dealing with stocks to screening orders to avoid credit card fraud, but overall, it’s one of the easiest ways to launch an ecommerce store that can become profitable over time. 

2. What are the Benefits of Dropshipping?

One of the key benefits of drop shipping is that the store owner doesn’t have to pay for the product until the customer pays, which means that they don’t risk buying products that won’t sell. Because of the low investment required to start a dropshipping business, this is a business model suitable for novices who want to run their own online store.

Another benefit of drop shipping is that the seller doesn’t get involved with the physical process of packaging and shipping products. That is one of the most tedious parts of selling products online, but sellers essentially outsource it to someone else. Dropshipping companies are more often than not large companies that deal with thousands of orders a day, which means they have negotiated shipping rates that are much lower than a small seller can get. 

3. Is Dropshipping Legal?

Yes, dropshipping is a completely legal business, but there are, of course several elements you need to take account before starting. It’s crucial to pick a reliable supplier, as you would be liable for sales if the supplier sells a counterfeit product. Those who are dropshipping on Amazon or eBay risk having their accounts banned for selling counterfeit products, and it’s very difficult, if not impossible, to recover from that. 

Many people ask if they need to inform the buyers that they are doing dropshipping. The answer is no — there is no legal requirement to do so, as long as the customer receives the product as described. Dropshipping is perfectly legal, and by choosing to work only with reputable suppliers, sellers can avoid possibly emerging issues. 

4. Is Dropshipping a Profitable Business Model? 

Digital entrepreneurs often ask whether dropshipping is still a profitable business in 2020. It is still possible to earn a decent income from dropshipping, but sellers should keep in mind that it’s not generally possible to make lots of money in a short period. For dropshipping to be profitable, sellers need to invest time, money, and effort. As a rule of thumb, focusing on a profitable niche can make a new dropshipping store successful quicker. 

5. Is it Necessary to Have a Registered Business for Dropshipping?

This depends on the country where you live, but generally, you do need to register your business once you start making sales. Most payment providers, including PayPal, require proof of a registered company once you start making consistent sales. The rules for obtaining business licenses vary from one country to another. In the U.S., for example, the process is rather straightforward, and you can do everything online.

6. How Much Money Can You Make Dropshipping?

This is not a question with a straightforward answer, as it all depends on the niche you pick, the number of visitors you can drive to your website, and your profit margin. The good news is that there are no limits on profits when dropshipping, with some sellers making full-time incomes and others managing to earn six-figure incomes from dropshipping.

7. What Are Some Common Issues with Dropshipping?

Since retailers have no control over stocks and shipments, problems are bound to arise with the dropshipping process. Some of the most common issues are related to items being out of stock, delays with the processing of orders, wrong item or quantity sent to the customer, and items arriving damaged.

Most of these issues are the same regular online stores with their own stocks have, but when you’re dropshipping, handling them is often more difficult. To protect your business and solve any issues for your customers in a timely manner, it’s essential to keep good records of all orders, shipping addresses, and learn everything there is to know about your dropshipper’s return policies. It’s also a good idea to offer customers discounts for future orders when a mistake occurred with their order. 

8. Is Fraud Something to Worry About with Dropshipping?

As with any online business, credit card fraud is just part of life, and the dropshipping business is not different. The good news is that there are lots of ways to protect a business with basic security measures and, as such, reduce the risk of fraud considerably. Using a gateway service for card processing is always recommended, as this allows the verification of the billing address of the customer so it matches the one on file with the bank. Screening orders with different billing and shipping addresses is another important step to protect against fraud, especially in the case of very large orders. 

9. How to Make Sure the Products Customers Order are in Stock?

Stocks are one of the major challenges of dropshipping, as it is rather difficult to determine if a product is available without actually having access to stock information in a warehouse. Ordering a product only to find out later it is not actually available makes for a very poor customer experience, and it’s not something that bodes well for any business. 

The good news is that sellers who choose to work with reputable dropshippers often have access to real-time inventory feeds. These make it easy to sync the products on the website with the actual stocks available in the warehouses of the dropshipper. If that is not possible, the second-best strategy is to work with multiple suppliers who can provide the same products. As such, if a product is not available in the warehouse of one supplier, chances are the second one will have it. This is not a fail-proof method, but it reduces the chances of having disappointed customers. 

10. How to Find Dropshipping Suppliers?

One of the most important steps to growing a successful dropshipping business is finding reputable drop ship suppliers. While there are thousands of drop shipping suppliers out there, it’s actually not that easy to find certified ones that are not going to cause too much trouble when it comes to fulfilling orders and accepting returns. 

To find the right supplier for a business, it’s essential to understand the distribution channels for the particular dropshipping industry you’re interested in. The main types of wholesalers used for dropshipping include manufacturers, importers and exclusive distributors, and regional wholesalers. 

Those who are just starting may want to look at smaller retailers. Still, it’s also possible to make a good profit by using a bigger wholesaler such as AliExpress from the beginning. No matter which route you choose, it’s always a good idea to get in touch with manufacturers directly for a list of distributors they prefer to work with. 

11. Why Start a Dropshipping Business with Modalyst?

Modalyst is a classic dropshipping service that both beginners and seasoned sellers can use to connect with verified suppliers. The role of the platform is to route orders automatically and notify suppliers about incoming orders. This means that the process is automated as much as possible, and Modalyst also facilitates the communication between the seller and the supplier. 

12. What Kinds of Products are Available Through Modalyst?

The product choice is one of the main strengths of Modalyst, and some of the products available through the platform include shoes, apparel, bags, furniture, electronics, and many others. The platform has a focus on U.S. and European-based suppliers, but also connects business owners to millions of dropship products on AliExpress through its official partnership with Alibaba. No matter what your dropshipping business idea, Modalyst has a wide range of products to make it a reality.

Modalyst is also a goldmine for retailers looking for on-trend products and the best dropshipping products for their store. The platform features a catalog of tens of thousands of trendy fashion products that are guaranteed to reach customers in the U.S. within a week. Products in this section are stored in warehouses in the U.S. and Europe, and they are ready for immediate shipping.

A wide selection of luxury products is also available at wholesale pricing, so ecommerce businesses in this niche can benefit from fast shipping of up to four business to the U.S. and quick worldwide shipping as well. 

13. What Are the Main Benefits of Using Modalyst for Dropshipping?

Besides the wide range of products available via Modalyst, there are several other benefits of using this platform. Modalyst is the perfect choice for online retailers who want to target European and American clients because of the quick delivery times. 

Dropshipping platforms that work with Chinese suppliers may have shipping times of up to eight weeks, and sometimes they use non-trackable shipments. As such, it’s difficult for store owners to know if the client has actually received the products. With Modalyst, the fast shipping times and tracked shipments mean that if something goes wrong, the clients don’t have to wait for another month for their returns to be processed. 

14. What Platforms Does Modalyst Integrate With?

Modalyst integrates with all major e-commerce platforms, including Shopify, Wix, and BigCommerce. Users automate most aspects of the business, from inventory data and orders to customer notifications about the status of their order. Modalyst connects directly to the user’s store, and with the dedicated Shopify App, Wix App and BigCommerce App, it allows users to add products to the store with just one click. This makes it easy for anyone with an ecommerce business to start dropshipping.

15. How Much Does It Cost to Start Dropshipping With Modalyst?

There are three different pricing plans available, and each of them has both monthly and yearly options. Users can easily start their dropshipping adventure for free by opting for the Hobby Plan, which is $0/month, and allows users to add 25 products to their store. There is a 5% transaction fee in place on the value of the orders. 

Sellers who need to add more products may opt for the Start-up Plan, which has the same 5% transaction fee but allows users to add 250 products to their store. The price of this intermediate plan is $35/month.

Finally, sellers who want to go all-in may opt for the Pro Plan, which costs $90/month and lets users add unlimited products from all marketplaces to their stores.

16. Is Modalyst Customer Support Good?

Modalyst offers users a comprehensive FAQ section, and users can easily find answers to most of their questions about the platform via the help center. All the help sections on the website are easy to understand, and it only takes a couple of clicks to find the answer to most questions. 

If the question is more specific and not addressed in the help center, users can get live chat support, which is available seven days a week from 8 a.m. to 6 p.m. EST, or send an email. Most emails get an answer within 24 hours. 

If you’re planning a dropshipping store, you need to be as informed as possible to succeed. The answers to the most asked dropshipping questions above can help you get started with your dropshipping business. Avoiding dropshipping problems is not always easy, particularly as a beginner, but being well-informed is the first step to success. 

The post What Is Dropshipping: Your Most Important Questions Answered first appeared on Modalyst.

With this information in mind, it’s clear that now is the perfect time for businesses of all kinds, both business-to-consumer (or B2C) and business-to-business (or B2B) to start selling products online. Whether they’re selling online in addition to or instead of in a traditional brick-and-mortar store, an internet platform is essential to businesses’ long-term survival.

Not sure where to begin? Listed below are 13 of the best platforms you can use to sell your products online. Whether yours is a B2C or B2B company, there are plenty of options from which you can choose.

B2C vs B2B Online Sales Channels

Before exploring specific marketplaces, it helps to have a clear understanding of the difference between B2C and B2B online sales channels.

When most people think of selling products online, they think of B2C marketplaces like Amazon and eBay. What they don’t always realize, though, is that these popular platforms also have a B2B version for those who are marketing products to other business owners. There are also many B2B platforms that cater exclusively to those in the B2B world.

In either case, there are some key differences between B2B and B2C sales channels. Both options connect buyers to multiple sellers and give buyers the option to compare products in one place. With B2B marketplaces, though, there are features that B2B companies are more likely to require, including the following:

With B2B marketplaces, it’s also easier to set up the ability to accept a variety of payment types (schedule payments, bank transfers, etc.).

If you run a B2B company, there are advantages that come with choosing a B2B-specific marketplace. Like B2C channels, they help to lower the entry cost, they’re easy to set up, and they give you access to new audiences that you wouldn’t have reached otherwise. They’re also better-tailored to your needs, though, and allow you to get the most out of the platform.

Top 13 B2C and B2B Sales Platforms

For both B2C and B2B companies, there’s no shortage of sales platforms. Here are 13 of the best ones to consider: 

1. Wix

Photo credit: Wix

Literally hundreds of millions of small business owners around the world use Wix as their preferred website builder. In fact, Wix has over 180M registered users worldwide, making it the largest and most popular website building platform in the world. Because of its ease of use and very user friendly drag and drop functionality, Wix is a very compelling option for most. This is especially true for the less tech-savvy entrepreneurs who want to build an attractive, high performing website without having to outsource the work to another party.

Beyond websites, Wix also allows users to create their own online store. Their online store builder is one of the only platforms that allows you to customize every aspect of your site, giving you 500 templates to choose from and professional tools built in.

Like the website-building functions, Wix ecommerce is simple and straightforward. You can drag and drop to create a store that aligns with your brand and is easy for online shoppers to navigate. It comes with hundreds of design features and tools and direct connections to dropshipping solutions such as Modalyst and Printful.

Wix is arguably the most complete option for business owners looking to sell products online. With that in mind, you may find that its ecommerce features are most optimal for small and medium businesses. For those who are just getting started, it’s a very compelling option to consider.

Wix eCommerce pricing starts at $23 per month, with options ranging all the way up to $500 per month.

2. Shopify

Photo credit: Shopify

Shopify is another one of the most popular eCommerce platforms for business owners looking to start selling online. Like Wix, it’s very simple and easy to use, with lots of drag and drop options to help you create an online store that looks great and functions well.

Shopify is one of the most frequently used B2C sales platforms, with more than 1,000,000 merchants. A basic plan provides you with everything you need to get started, including a website, blog, SSL certificates, and abandoned shopping cart recovery.

One of the only complaints people have about Shopify is that it has limited customization options. What it does provide, though, is sufficient for most new online businesses.

Shopify pricing starts at $29 per month.

3. Bonanza

Photo credit: Bonanza

Bonanza is a Seattle-based company that’s much smaller than platforms like Wix and Shopify, with only about 50,000 sellers. It’s growing at a rapid rate, though, and already has over 35 million items listed for sale.

Bonanza offers low selling fees that are based on the Final Offer Value (this is calculated based on the combined dollar value that the buyer paid added to any portion of the shipping fee that exceeds $10). If you sold an item for $30 and the shipping charge was $15, the Final Offer Value would be $35. The selling fee is 2.5 percent of the Final Offer Value, which would result in a fee of just $0.87.

For businesses that want to avoid expensive listing and selling fees, Bonanza can be a viable option. You also only have to pay fees when you make a sale.

Bonanza membership pricing starts at $40 per month.

4. Amazon

Photo credit: Amazon

Of course, it wouldn’t be a list of online sales platforms without mention of Amazon. Amazon is one of the most popular websites to sell stuff online and is definitely worth considering due to its large audience and trusted reputation.

Amazon is more expensive than other selling options, though. To become a professional seller, you must fill out an application and pay a $39.99 per month fee. There are fees for each item you sell, too.

For those who plan on selling less than 40 items per month, an individual seller account is available without a monthly fee. For most businesses, though, this won’t be sufficient.

5. eBay

Photo credit: eBay

eBay is the original online sales website and is still considered one of the best places to sell online. Having been around since 1995 and boasting over 25 million sellers, eBay is a viable option to consider. It features a straightforward selling process and lots of businesses prefer it over other platforms.

A common complaint about eBay, though, is its selling fees. There is a non-refundable fee that you have to pay to list each item, as well as an additional fee if you list an item in multiple categories. You also have to pay a “final value fee” that’s calculated using a similar method to the one Final Offer Value Bonanza uses.

Pricing to open an eBay store starts at just $7.95 per month.

6. Ruby Lane

Photo credit: Ruby Lane

For those who sell vintage goods or antiques, Ruby Lane is a good platform to check out. It receives more than one million unique visitors each month and is meant to bring antique enthusiasts together on one easy-to-use platform.

Ruby Lane requires a one-time $100 fee to set up a shop. You’ll also have to pay a $69 per month fee if you sell less than 80 items in your shop. The shop fee will change from here based on the number of items you sell. 

7. Etsy

Photo credit: Etsy

If you sell crafts or hand-made goods, Etsy is a great place to set up shop. It’s known for being easy to use and is a trusted option in the online buying and selling world. Customers may be more inclined to work with you if you use Etsy over a different platform since it’s so well-known.

Etsy’s fees are relatively low and straightforward, too. You’re required to pay a listing fee of $0.20 cents for each item you sell. That item then stays in your shop for either four months or until it sells (whichever happens first). For items that sell, there’s a five percent transaction fee and a three percent plus $0.25 processing fee.

If you’ve been wondering, “Where can I sell my stuff online for free?”, Etsy is a great option. It’s free to set up an Etsy shop and get your business off the ground.

8. Alibaba

Photo credit: Alibaba

If you’re looking to dive into the world of B2B online commerce, you can’t go wrong with Alibaba. Alibaba is one of the world’s largest online retailers, with options for B2C, C2C, and, of course, B2B companies.

It’s very easy to get started using Alibaba, and you’ll have access to a variety of other selling options, including online auction and mobile commerce.

Alibaba is a more expensive option, with annual seller fees of up to $10,000 and a security deposit of up to $25,000 for Gold members.

9. Wholesale Central

Photo credit: Wholesale Central

Wholesale Central has been around since 1996 and is a well-known online wholesale option for a lot of B2B companies. One of the best things about Wholesale Central is that it’s easy to navigate and free to use. There’s no need to pay expensive membership fees when you sign up.

A potential downside to Wholesale Central is that the site looks a bit dated, though. It also doesn’t automate much of the sales process, nor does it integrate with other platforms. If you’re looking for a way to sell online for free, though, it’s worth considering.

10. Faire

Photo credit: Faire

Faire is another popular wholesale option you might want to look into. Originally founded in San Francisco in 2017 under the name Indigo Fair, Faire has been steadily growing for the last few years.

Faire does require an application and approval process. However, it’s free to join, and the platform provides you with the option to have your shop page set up for you if you’re not interested in doing any heavy lifting on that end.

A potential downside to Faire is its fees. Faire takes a 25 percent commission from first-time store orders and a 15 percent commission from reorders.

11. EWorldTrade

Photo credit: EWorldTrade

EWorldTrade is a rapidly expanding online B2B platform that offers tons of eCommerce services. It’s also known as one of the best platforms for lead generation as well as online sales.

EWorldTrade encourages transparency and the sale of quality products. It’s a reliable trading platform and is considered a leader in the online B2B sales space.

Pricing for this channel starts at $399 per year and ranges all the way up to $7,999 per year.

12. Global Sources

Photo credit: Global Sources

Global Sources is a China-based platform and another leader in the B2B online sales world. It serves millions of visitors per month, offers both export and import services, and offers trading to many of the world’s prime countries.

Global Sources is known for having lots of different selling options. It even hosts online trade shows so sellers can show off their best products and attract more potential customers.

The platform also has a free selling option that allows you to post up to 100 items on the site.

13. Made-in-China

Photo credit: Made-in-China

Made-in-China is a popular B2B platform that allows sellers from all over the world to connect with potential buyers. Built back in 1998, it’s been a favored option for a long time and is a good option for those who want to stay on the cusp of the latest B2B marketing strategies.

Made-in-China is accessible in over 10 languages. It provides over 26 major selling categories and over 3,600 sub-categories. It’s the first eCommerce platform to perform comprehensive reviews on paid suppliers, too.

Made-in-China is free to join as well, making it a good fit for B2B companies that are just getting started and are working with limited budgets.

Start Selling Your Products Online Today

As you can see, there are lots of different platforms you can use to sell online, wether that’s through dropshipping or some other business model, and get your products in front of more potential customers. Whether you run a B2B or B2C business, with so many choices out there today, it’s easy to find online selling sites that meet your needs and work with your budget.

Keep the details of these different marketplaces in mind as you move forward. They’ll help you begin to narrow down your options and decide which one is the best platform to sell online for your business.

Still not sure what products to sell? Check out all our options here.

The post 13 Best eCommerce Platforms to Sell Your Products Online first appeared on Modalyst.

What is the Chinese New Year?

Chinese New Year is the festival that celebrates the beginning of a new year on the traditional Chinese calendar. It is the most important celebration in China — and one of the most well known across the world. It is celebrated worldwide in regions and countries with significant Overseas Chinese populations, including Singapore, Indonesia, Malaysia, Myanmar, Thailand, Cambodia, the Philippines, and Mauritius, as well as in North America and Europe.

While the festival is celebrated over a two week period, only the first seven days are considered a public holiday. 

Nevertheless, offices and factories in China close for about three weeks, allowing Chinese workers time to travel back home to spend the holiday with their families. This event creates an enormous migration within the country and from abroad. For context, in 2019, over 90 million workers, the majority in urban areas along China’s coast, traveled by road, train, and plane back to their rural hometowns during CNY.

Chinese New Year 2021: What is the timeline?

Chinese New Year begins on Friday, February 12, 2021. 

Suppliers in China will begin slowing down or halting production a week or so before. We recommend you ask your suppliers when their offices and factories will be closed during this holiday.

Outlined below is an approximate schedule for Chinese New Year holiday.

• Beginning of January: Businesses begin to slow down production
• January 21st: All employees will have left their offices and factories
• January 22nd: Chinese New Year begins
• January 27th: Chinese New Year ends (public holidays)
• End of January: Some employees start to trickle back to their place of work
• End of February: Most employees have returned to their place of work
• Businesses resume their normal operations and production around then too.

Chinese New Year 2023: How will CNY affect my eCommerce business?

As highlighted earlier, Chinese New Year is the most important event in China every year. This means that most businesses, including the suppliers on AliExpress you may work with, observe the holiday and shut down for a period of time. While CNY officially kicks off January 22nd , many factories and offices shut down in the days leading up to the official start date, allowing time for workers to travel home back to their families. As workers leave, the general operations of businesses come to a halt as well. .

Since China is an economic giant in the global exporting industry, the effects of Chinese New Year ripples to all corners of the world. The ripples affect many different industries, including eCommerce dropshipping.  

For example, if you are actively sourcing and selling products from AliExpress, Chinese New Year will affect your business. Below is a list of some disruptions to expect during CNY.

How Chinese New Year may affect your supply chain 

All major businesses in China completely shut down for at least seven days. This includes factories and manufacturing facilities. No orders ship out of China during CNY. Some factories may even shut down for up to three weeks. Why so long? There is sometimes a delay in getting workers back to their offices. China’s transportation system is usually overburdened in the days following the end of the holiday as all workers choose to go back at once.

The information flow is cut during the Chinese New Year event. No one, including your best suppliers, will be available for correspondence. 

You might experience production slowdowns one or two weeks before the start of the holiday. Workers sometimes leave their job sites early to go back home and spend time with their families. 

Before CNY, you may experience an increase in product quality issues, as factories rush to finish as many orders as possible before their workers leave for the holiday.

Likewise, after CNY, you may also experience an increase in product quality issues. This happens because the factories are short staffed for a period of time. 

How to Plan for Chinese New Year

At Modalyst, most of our independent suppliers are from the US and Europe and will not be affected. Now is your chance to try more of our curated suppliers or join our Private Label Program and new Print-on-Demand Program.

If you are sourcing products from AliExpress, you should expect delays while warehouses and logistics in China and Hong Kong are reduced during the holiday from January 21, 2023 through January 26th, 2023. Many warehouses also are stocking up on bestsellers now, and start to wind down a week earlier to extend their holiday.

What steps can you take to maintain your business during CNY?

Contact your suppliers to understand their plans

• When are they winding down?
• When are they starting up again?
• Can they still ship during this time period?

Consider selling USA or EU brands during this time

This is a great time to branch out and sell indie brands. You can also join our very popular Private Label Program and our new Print-on-Demand Program to sell products with custom designs and your branding.

According to Chinese tradition, this is a year to focus on relationships. We hope that this is a time to build a deeper relationship with our customers and for you to build a thriving business with your customers.

Reduce ads 

Once you have a better idea of your suppliers’ plans, you can reduce ads for items which will ship slowly during this time. It is good to check on this now, as some suppliers start to slow down in the weeks leading up to CNY. For example, reduce marketing for Valentine’s Day or Mardi Gras items, as those items may not arrive in time.

Consider buying stock of bestsellers

Do you have a hot selling item? Consider buying stock of this item now so you have it on-hand. You can then guarantee that orders are delivered during this time period.

Inform customers that orders are experiencing delays

Consider posting on your website that orders will experience delays. Customers will often understand, especially since Covid has also reduced the number of flights, slowing ecommerce delivery times globally.

You can also remind customers that orders are experiencing delays in an email after they place their order. This will ensure that they are reminded of delays if they did not see it on your site.

In case you want to plan ahead for future Chinese holidays, please see the below.

Chinese New Year may be the biggest holiday but there are actually several other Chinese holidays that could have an effect on your business. 

Qing Ming Jie (Tomb Sweeping Day): Sunday, April 4th

International Labor Day: Saturday, May 1st

Dragon Boat Festival: June 14th – 16th

Mid-Autumn Festival/Moon Festival: Tuesday, September 21st

Golden Week Holiday: Friday, October 1st – Thursday, October 7th

The post How to prepare your eCommerce Business for Chinese New Year first appeared on Modalyst.