An interview: Drop-shipping has increased the turn-over of the Nábytek-Jeko.cz online store
Drop-shipping as a method of online purchasing, represents a business model which opens the gates of e-commerce to many more people. What kind of experience has Nábytek-Jeko.cz had with drop-shipping, and what advantages has it brought?
Mrs. Kateřina Svobodová, Nábytek-Jeko.cz e-shop web consultant answers questions about their experience with drop-shipping.
Q: How long has Nábytek-Jeko.cz, B2C furniture e-shop, also been doing business with B2B partners using drop-shipping and why did you decide to do it?
Kateřina Svobodová: We have been doing business with B2B partners for almost two years now. It was NetDirect who provided us with the opportunity to use drop shipping when they introduced the business model to its clients. Due to the introduction of an advanced, yet inexpensive “box” version of the FastCentrik online store system, the opportunity to quickly create an e-shop became available to many clients. To immediately start an e-business, it is necessary to connect to a supplier from whom you can automatically obtain all the data about your products. In the past, to enter all the data into your e-shop administration manually could have taken you several months
What is drop-shipping?
But with the use of a supplier you can almost immediately sell thousands of products. The ShopCentrik e-shop system, used by Nábytek-Jeko.cz, is well adapted for drop shipping due to the XML Data Expander, that is why we decided that it would be silly not to take advantage of the new opportunities and offers – and it turned out to be very good idea. Drop-shipping is the next step from the classical B2C e-business for Nábytek-Jeko.cz and it provides us with another opportunity to move forward.
Q: How would you evaluate the current benefits brought by this business model and what disadvantages or pitfalls could drop-shipping present for Nábytek-Jeko.cz as a supplier?
Kateřina Svobodová: The benefit of Nábytek-Jeko.cz expansion to include the drop-shipping model had definitely increased the overall sales volume. We have now, higher turnover in the e-shop than we used to. That is why we have to order more products from our producers and that allows as to negotiate better purchase prices. Another plus is that we can improve the logistics of products supplies to the end customers - we have purchased our own delivery fleet. Because we can group the orders from drop-shipping partners with the orders from our own B2C clients it is, of course, much easier to fill in the vans with products for more clients from one city.
I can see the pitfalls of drop-shipping for suppliers in the duplication of products. With the data about products, which our partners automatically obtain from us for their e-shops, the descriptions of products are expanded as well. That is why many texts duplicates come up and this can be quite a disadvantage when it comes to SEO (Search Engine Optimalization).
Luckily we have resolved this issue very quickly. The ShopCentrik online store system we use, allows the entry of a dual description for each product. So now we have different text for our online store and different descriptions for drop shipping partners.
What I always recommend to our partners is that they systematically create unique descriptions of each product as it is in their own, as well as our, best interests that their e-shops are well positioned in search engines and achieve better business results. FastCentrik makes it easy for them thanks to the function of “locks”. This function ensures that when new data from Nábytek-Jeko.cz is imported, all their original descriptions remain unchanged.
Our Sales department has increased in proportion to our revenues, due to the drop-shipping method, as the workload (questions from our partners and their clients) has increased as well. Therefore anyone who is thinking about using the drop-shipping method and becoming a supplier should not only think about the increase in sales that it will bring but should also be prepared for the fact that there will be much other work to do.
Q: What would be your advice to beginning e-shop providers who want to become a supplier in the partners-customers network and expand their business with the drop-shipping method?
Kateřina Svobodová: First of all, and I will repeat myself, I would recommend to all who wish to start with drop shipping to make sure they have the option to enter a dual description for each product. One description would be used for their e-shop and other would be for their partners. That is the only way to avoid any text duplication from their own online store.
It is also very important to provide the necessary service to your partners. That is the only way to convince your partner to remain with you, sell your products and increase your turnover. The supplier should be able to assist partners at the very beginning well as assist those partners who need to answer questions from their customers. Try to meet their requirements and deliver as much information about the products as possible. I would recommend you to help them with the SEO issues etc. too.
Another piece of advice is be to keep the commission system, pay the commissions to your partners regularly and use the same system for all your partners; no exceptions. These are, in my opinion, the basic presumptions for successful drop-shipping. The previously mentioned logistics are also very important. The orders may begin to accumulate and the provider must expect and be ready to deliver more products.
Q: How would you predict the prospects for the future – is there a good market for internet drop-shipping in the Czech Republic? Which market segments are the most suitable for this method and which less?
Kateřina Svobodová: I think that drop shipping can be done by any company who can pay commissions. The amount of the commission must be, of course, worthwhile for the partners. When it comes to such assortments as electronics, and household appliances this system is not very suitable, because of the amount of commission that would be available. Furthermore, drop-shipping is also not very suitable for e-shops offering FMCG products such as food or flowers with an increased probability of spoiling.
Competition in the “furniture” field is quite high. Therefore, each partner must be smart enough and understand that this business brings a very hard work. He/she must takes care of good positioning in the search engines and try to makes sure the e-shop is easily found by clients.
Products such as perfumes, cosmetics, furniture, books, jewelry, toys, vitamin supplements, fitness equipment, clothing (women, men, kids, sport) and also services are all areas that would sell well through this method.
For example for women on maternity leave, drop-shipping, based on FastCentrik, brings new opportunites to earn some money. They do not need any traditional, physical shops, huge initial investments, warehouses, or employees. Honestly, if someone has the desire and time to run an e-shop with products, undergo a little training, look for information and watch the competition, he or she can easily become successful and even beat the big e-shops… not only in the number of orders but also in the position in the search engines ranking on the internet.
Photo and info: www.nabytek-jeko.cz
Do you run an e-shop using the NetDirect system and do you have an interesting experience in e-commerce which you would like to share with us and our ShopCentrik.cz readers?
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