What is Reverse Dropshipping and How Does It Work in 2024?
By Sonaksh Singh Rawat on
It goes without saying, with businesses going online there are a multitude of avenues through which one can conduct business. Dropshipping is one of them, in this business model online stores are not required to have any products in stock and they don’t need to have inventory management, rather they take the help of ecommerce platforms to find manufacturers and suppliers who will manufacture, store, as well as deliver products on the online store’s behalf.
Similarly, reverse dropshipping is yet another business model that is gaining popularity in the e-commerce space. In this relatively new business model, online store owners source and sell products from developed countries that typically import high-quality products, and these products are sold to countries that sell/export those products.
Reverse dropshipping is a great way to run a business, as a reverse dropshipper you get access to high-quality products, and you will also face less competition as it is a new business model, it offers significantly higher profit margins and more.
In this article, we’ll take a closer look at the Reverse Dropshipping model in a bit more detail. To know more, keep on reading.
What is Reverse Dropshipping?
With it being a relatively new business model, the question on everyone’s mind is “What is Dropshipping?”
Reverse dropshipping involves sourcing high-quality products from developed countries that import them and selling those products to countries/markets that export and sell them.
For instance, merchants/reverse dropshippers can source products like top-tier electronics (smartwatches and smartphones) from countries like the UK, USA, or Canada and sell them in countries like India and China, as they are known for having high-volume sales. The reason for the high-volume sales is that the audience also looks out for quality products that aren’t manufactured in their own country.
How Does Reverse Dropshipping Work?
Reverse dropshipping isn’t very complicated, here is the step-by-step breakdown of how the reverse dropshipping process works.
Finding and Connecting with Dropshipping Suppliers
The very first step in this model is finding and connecting with reliable dropshipping suppliers. These suppliers are extremely important to your business because the products they manufacture will represent you. When on the lookout for suppliers make sure they offer high-quality products consistently, go through their customer feedback/reviews, and most importantly, make sure they have a good reputation within the ecommerce-sphere.
List Products on Your Online Store
When you find a reliable supplier who offers good quality products, you need to start listing those products on ecommerce marketplaces like Facebook Marketplace or Amazon International Marketplace. When listing your products, ensure you add an accurate description and pictures of the products. Furthermore, ensure the pricing of these products falls within a reasonable range, this will help in increasing the sales volume.
Marketing and Advertising
Similar to any other business model, marketing your reverse dropshipping website and products plays a pivotal role here too. Use social media platforms to garner more attention to your store products, you should also make use of Amazon advertising, SEO optimization techniques as well as paid advertising. This will help in increasing the audience base.
Selling the Products
After marketing your products, once an order is placed and paid for, relay the information to the supplier. After that, the supplier will take care of the manufacturing part of it as well as deliver it.
Pros and Cons of Dropshipping
Should you opt for reverse dropshipping?
If you’re looking to start an online business then consider reverse dropshipping, it is without a doubt, a great option. Here are a few reasons why you should consider reverse dropshipping as an option:
- In reverse dropshipping, you sell high-quality products which makes you stand out from most of the competition.
- Again, reverse dropshipping is a very new business concept/model. As a result, there is significantly less competition as compared to other business models.
- When reverse dropshippers sell high-quality products they also get a higher profit margin.
How to Implement Reverse Dropshipping?
If you’re looking to start an online business and want to implement the reverse dropshipping business model, here is a step-by-step guide to setting up a reverse dropshipping model.
Finding a Niche
As with any other business, if you want to be successful, you need to find a niche. To find a niche make sure, you also take a look at the type of things that are trending in the world, it will give you a good idea of what's popular. Google Trends offers valuable insight into the same. On the contrary, you can also choose a niche you’re passionate about.
Finding Products
Once you know your niche, it's time to choose your product. The next step is to do a small market research of your target audience, you should have an idea of what their needs and expectations are. This will give you an idea of which product to list and sell. You should also use online tools to find products that offer great profit margins.
Finding Suppliers
As a reverse dropshipper, the next step is to find suppliers to help you source and deliver products. You should always be extra cautious while choosing your supplier. Your brand's reputation depends on it. When looking for suppliers, take a good look at the customer feedback and reviews, and make sure your supplier offers products of high quality on every order. Several online tools can help you look for reverse dropshipping suppliers.
Build an Online Dropshipping Store
You should now start building your reverse dropshipping website. There are a plethora of ecommerce platforms that help reverse dropshippers build an online store. You don’t need to have any technical knowledge, but here are a few things you need to keep in mind when crafting an online reverse dropshipping store:
- Make sure your online store is visually appealing.
- It should have fast-loading web and landing pages
- It should be accessible via any device
- It should be easy to navigate
- The reverse dropshipping website should be user-friendly
- Make sure you translate all your web pages, landing pages, and websites to the language of the country or region you're targeting.
Once you set your store up you can start listing your products. You should also use third-party integrations to help you manage and track your orders, doing so makes running an online business very easy.
Marketing your Online Store
Marketing your reverse dropshipping website will help put it on the map. There are several ways through which you can market your online store and your products. You can use cross-channel marketing, you can also use social media platforms to get attention reeling towards your online store.
These are the steps you need to follow if you intend to start a reverse dropshipping website. Additionally, to run a successful online business, you need to keep the following pointers in mind:
- Have realistic expectations, your will business will take some time to be successful
- Make sure you offer excellent customer support
- Choose reliable suppliers and negotiate terms
- Do your research
- Optimize your reverse dropshipping website for SEO
- Don’t forget to use paid advertising as well, it makes a difference.
Dropshipping vs Reverse Dropshipping
Here is a comparison of reverse dropshipping vs dropshipping:
Popular Reverse Dropshipping Products
Here’s a list of some of the most popular dropshipping products:
- Premier Kitchen Appliances
- Home Automation Systems
- Electric Cycles
- Gaming Laptops and Accessories
- Smartwatches
- Luxury Home Decor
- Outdoor Gear and Accessories
- 3D Printing Equipment
- Drones
- Sustainable Apparel
- Portable Solar Panels
- High-Quality Travels Bags and Accessories
- Photography Equipment
- Wireless Earbuds
- Sustainable Office Furniture and Decor
- Innovative Coffee Machines
- Organic Foods
- Innovative Gadgets
- Top-Tier Quality Pet Products
- Organic Skincare and Haircare products
Successful Case Studies of Reverse Dropshipping
Tasha Apparel
One of the best examples of reverse Dropshipping. This is a fashion apparel brand focused on women and they price their products anywhere between $3 - $150. Furthermore, they offer their latest products sometimes at below 80% wholesale.
Smart Home Devices
Yet another great example of a reverse Dropshipping store. They sell various types of gadgets and electronic devices, the supplier price range for this can be anywhere between $30 -$100, whereas its retail price can shoot up to $500!
Fitness Trackers
Similar to the above example, these guys sell fitness trackers. The supplier price range for this can vary from $50 to $150, while it can be sold at a price as high as $300 to $400. This is a profit margin of anywhere between 50% to 100%!
Highlights of Reverse Dropshipping
Here are some of the highlights of reverse dropshipping:
- Remember, having a niche target audience and equally niche products is important
- Reverse Dropshipping only deals with high-quality products
- Reliable suppliers are a must
- With high-quality products you will also have higher profit margins
- Your reverse dropshipping website will also face less competition
