Dropshipping vs. Online Store: Key Differences and Benefits

With the emergence of e-commerce, business people can sell their products online. Two of the most widespread e-commerce strategies are dropshipping and running a conventional online store. Analyzing the differences between these two models enables the business person to select the most appropriate model to suit the business objectives and financial capacity.

In this article, we will provide an comprehensive comparison of the difference between dropshipping and ecommerce. We will describe how each of them is used, the advantages and disadvantages of each, and what you should consider when deciding on which strategy to use in your business. We will also talk about how Flashop works for both the dropshipping business and general online stores owing to the versatility of the catalog and the trustworthy supplier base.

 What is Dropshipping?

Dropshipping is an e-commerce model where store owners sell products to customers without actually keeping inventory on hand. Instead, when a dropshipping store makes a sale, it purchases the item from a third-party supplier or manufacturer who then ships it directly to the customer.

Here is how the dropshipping order fulfillment process typically works:

• A dropshipping business owner sets up an online storefront, usually through a platform like Shopify or WooCommerce.

• The store owner populates their website with product listings. These are usually sourced from a wholesale supplier directory like Flashop, which provides a huge catalog of items.

• When a customer places an order and payment is processed on the store's website, the store owner receives the order notification.

• The store owner then forwards the order details to the relevant supplier through a direct integration or manually.

• The supplier packages and ships the product directly to the customer per the order details provided by the store owner.

• The supplier also provides tracking information back to the store owner so they can monitor the fulfillment status.

• The customer receives the package shipped directly from the dropshipping supplier.

As a leading B2B platform, Flashop enables dropshipping by providing store owners with access to a wide selection of trending and niche products, allowing them to build their store without purchasing inventory upfront.

What is a Traditional Online Store?

A traditional online store, also known as a self-fulfilled e-commerce business, is one where the online merchant buys inventory upfront and manages the entire customer experience from start to finish. The store owner handles all aspects of inventory management, packaging orders, and shipping products directly to customers.

Here are the typical steps involved when running a traditional online store:

• The business owner sources and purchases inventory in bulk from wholesalers, distributors, or manufacturers. This inventory is stored in the merchant's own warehouse or third-party fulfillment center.

• The business creates product listings on their online storefront. This is powered by a platform like Shopify, Magento, or WooCommerce.

• When a customer places an order through the store's website, the order information is received by the business owner.

• Staff at the warehouse pick the purchased items from available inventory to fulfill the order.

• Employees then package the items, usually adding custom branding, inserts, or messaging.

• The store owner organizes delivery of the packaged order to the customer, usually via a shipping carrier like UPS, FedEx, or USPS.

• The customer receives the purchase shipped directly from the online store's warehouse.

While most traditional stores manage their inventory, Flashop offers flexible sourcing options, allowing merchants to purchase inventory as needed.

What Is The Difference Between Ecommerce and Dropshipping?

While both models, ecommerce or dropshipping, involve selling products online, there are some very important distinctions between dropshipping and owning a traditional online store:

Inventory Management

One of the biggest differences is inventory management. With dropshipping, store owners never have to handle, store, or manage inventory. Products ship directly from the supplier to customers per each order. Online stores have to purchase and manage their own inventory, which requires significant upfront costs and continual monitoring of stock levels. Carrying inventory also comes with risks like dead stock and tying up working capital.

Flashop eliminates all inventory headaches for dropshippers by sourcing products from suppliers only once an order is placed. For traditional online sellers, Flashop provides flexible order volumes so merchants can purchase inventory as needed rather than large upfront buys.

Ecommerce vs Dropshipping Cost

Cost is another important factor to consider. Starting a dropshipping business requires substantially lower startup costs. Without needing upfront inventory purchases, entrepreneurs can launch dropshipping stores very affordably. Traditional online stores require much larger investments in inventory, warehousing, packaging materials, and other startup costs.

For example, a dropshipper can start a store with just a few hundred dollars while a traditional store may need thousands upfront. Flashop makes launching a dropshipping business accessible even to new entrepreneurs through competitive product pricing and seamless integration with e-commerce platforms.

Control Over Branding and Packaging

Dropshipping stores have almost no control over branding and packaging since products ship from third-party suppliers in plain boxes. Unless suppliers offer white label products, dropshippers are very limited in how they can customize packaging and branding.

In contrast, traditional online sellers fully control branding and packaging. They can create premium unboxing experiences with custom packaging, branded inserts, and other creative elements that align with their desired brand image. This allows traditional stores to differentiate on branding.

Profit Margins

Dropshipping businesses tend to have lower profit margins per sale, as the store needs to pay a wholesale price to the supplier. By buying inventory directly from manufacturers or wholesalers, traditional online stores can potentially achieve much higher margins. However, Flashop helps narrow this gap by providing dropshippers competitive product pricing to help maximize profits.

Shipping Times

Shipping times can vary significantly. Dropshipping often results in longer shipping times, especially if products are shipped from overseas. Traditional online stores can ship products faster, often delivering within 1-3 days from a local warehouse. Faster shipping improves customer satisfaction.

Risk and Responsibility

Dropshipping minimizes inventory risk since store owners pay for products only after making a sale. However, they have less control over customer experience and are more reliant on suppliers for quality and returns. Traditional online stores take on more responsibility for inventory and fulfillment but offer greater control over the customer experience.

Benefits of Dropshipping

While dropshipping comes with some drawbacks, it remains a popular business model due to these substantial advantages:

Low Startup Costs

The extremely low startup costs make dropshipping an very appealing model for new entrepreneurs, especially those with limited budgets. Dropshippers can launch an online business with very little money upfront, unlike traditional e-commerce that requires major capital to acquire inventory.

By completely avoiding upfront inventory purchases, dropshipping allows starting an online store on a shoestring budget. Less risk also lowers barriers for entry for aspiring business owners.

Flexibility

Dropshipping offers unmatched flexibility when it comes to testing new product ideas and expanding your catalog. You can add or remove products anytime without being stuck with excess inventory. This makes it easy to refine your product selection based on what sells best.

With a traditional online store, you're locked into whatever inventory you've already purchased upfront. Having to offload unsold stock can lead to losses. With dropshipping, adapting to demand is much simpler.

No Inventory Management

A major perk of dropshipping is completely handing off inventory management duties to suppliers. Store owners don't have to worry about forecasting demand, carrying stock, or managing a warehouse. The substantial time and hassle saved from avoiding inventory responsibilities is a huge benefit.

Global Market Access

Easy access to global markets is another major advantage. Since you don't have to worry about international shipping and customs when suppliers handle fulfillment, it's simple to sell overseas without expanding your operations.

Language or geographical barriers disappear. Dropshipping enables a location-agnostic business model.

Overall, Flashop enhances the benefits of dropshipping through its vast global network of suppliers, competitive product pricing, and seamless integration with e-commerce platforms like Shopify.

Benefits of Running a Traditional Online Store

Despite higher startup costs and effort, building a traditional online store that directly manages inventory reaps some unique rewards:

Control Over Customer Experience

Owning the entire customer journey enables full control over the customer experience. From thoughtful packaging to branded inserts, you can differentiate your business at every touchpoint.

Managing your own inventory also means reliably fast shipping times, boosting customer satisfaction. Overall, traditional sellers can optimize the entire path to delight shoppers.

Potential for Higher Profit Margins

By purchasing inventory directly in bulk from manufacturers or wholesalers rather than through a distributor, traditional online sellers can achieve better per-unit pricing and margins. You also dictate final pricing and sales.

Buying large volumes can lead to discounts, improving profitability. Higher margins mean more earnings per sale.

Better Customer Loyalty

Consistent, premium branding and faster shipping results in happier repeat shoppers. When you control packaging and speed, customers enjoy a better experience leading to higher lifetime value and loyalty.

Satisfied buyers are more likely to purchase again when you own the experience.

Ability to Create a Unique Brand

Owning the full process from product sourcing to final delivery lets you imbue your unique brand identity throughout the entire customer journey. From branded unboxing to customized inserts, traditional stores control their branding and positioning.

A cohesive brand experience builds trust and recognition for your business.

While dropshipping provides less control over branding, Flashop helps you elevate the customer experience by sourcing high-quality products and providing tracking and support.

Dropshipping Vs Ecommerce: Which Is Better?
Choosing between dropshipping and running a traditional online store depends on your business goals and budget. Here are key factors to consider:

Assess Your Budget
If you're starting with a limited budget, dropshipping is ideal because it eliminates the need for upfront inventory purchases. Those with more capital may prefer to stock inventory for better control over pricing and margins.

Consider Your Business Goals
Your overall objectives will influence the decision. If you value control over branding and packaging, a traditional store might be the better option. Dropshipping is best if flexibility and low overhead are your priorities.

Time Commitment
Dropshipping is less time-intensive since suppliers handle fulfillment. If you have time to manage inventory and want full control, a traditional store may be more suitable.

Growth Potential
Owning inventory can provide advantages as you scale, such as bulk purchasing discounts. However, dropshipping offers easier global scalability due to its low overhead.

 

How Flashop Supports Your E-Commerce Journey

Flashop is designed to support e-commerce merchants every step of the way, whether you choose to operate a dropshipping store or traditional online store.

For dropshipping businesses, Flashop provides:

• An extensive catalog of trending products

• Competitive wholesale pricing to maximize profit margins

• Seamless integration with major e-commerce platforms like Shopify and WooCommerce

• Reliable network of suppliers and manufacturers to fulfill orders

• Helpful customer service team to resolve any fulfillment issues

If you decide to run an inventory-based online store, Flashop can also assist with:

• Flexible order volumes so you can buy inventory gradually instead of huge upfront purchases

• Curated quality products to showcase in your online store

• Fast and affordable shipping options to help you delight customers

• Streamlined product sourcing so you can focus on your core business

Whether you need a trusted supplier for dropshipping or a partner for stocking your own inventory, Flashop has the solutions and support to help your e-commerce business thrive. Our wide range of services can meet your needs as your grow and evolve.

Common Questions About Dropshipping and Online Stores

Should I start with dropshipping or an online store?

For beginners with limited capital, we recommend starting with dropshipping. Dropshipping requires lower startup costs since you don't need to purchase inventory upfront. This allows you to test an online store with less financial risk. With an online store, you need more working capital to buy inventory. Dropshipping's hands-off fulfillment is also easier for e-commerce beginners.

Is dropshipping or an online store faster to get up and running?

Dropshipping allows launching an e-commerce store much faster because you can immediately list products without acquiring inventory first. With an online store, you need time to source and purchase inventory before selling. So if speed is important, dropshipping lets you start selling products in days rather than weeks or months.

Will customers know I use dropshipping?

Most dropshipping suppliers use plain brown boxes without branding, so customers can likely tell it's fulfilled from a third party. Some options to improve branding are requesting suppliers use custom tissue paper or order stickers. Or use a fulfillment center for additional services like gift wrapping.

Conclusion

Dropshipping and traditional online stores are two distinct models, each with its own advantages and challenges. Careful consideration of your budget, goals, and time commitment will help you choose the right model for your business.

Dropshipping offers flexibility and low startup costs, making it ideal for new entrepreneurs. Traditional stores provide more control over branding and higher margins but require greater investment.

Flashop supports both models through its vast supplier network, competitive prices, and excellent customer service. Whether you're starting a dropshipping business or managing a traditional store, Flashop can help you succeed in the e-commerce space. Get in touch with us today to know more.