Business how does dropshipping business work

Published on March 10th, 2021 | by Sunit Nandi


What’s Dropshipping

In this article, we introduce how dropshipping businesses can succeed with the use of web scraping. First of all, let’s see what dropshipping means. According to the definition from Wikipedia:

“Dropshipping is a streamlined form of retail business wherein the seller accepts customer orders but does not keep goods sold in stock. Instead, in a form of supply chain management, it transfers the orders and their shipment details to either the manufacturer, a wholesaler, another retailer, or a fulfillment house, which then ships the goods directly to the customer.

How Does Dropshipping Business Work

Dropshipping has become a well-known e-commerce business model because it offers such huge numbers of benefits for retail sales. With dropshipping, the business owner does not have to keep up a stock of merchandise. They just have to purchase the item from the supplier who handles the stock and the shipping.

It allows you to start an eCommerce store without having to do large investments in inventory upfront. In a traditional retail setup, retailers had to tie up vast amounts of capital purchasing inventory.

how does dropshipping business work

That’s why 33% of the online store has adopted this business model. The light asset model means a low market entry barrier. It’s a business easy to start, grow, and manage. It allows you to be your own boss and work from anywhere.

It also comes with fierce competition, especially in the most popular markets. It’s far from easy to make the business stand out from other competitors.

Challenges in Dropshipping Business

The best method to clear up misconceptions and abstain from making regular blunders is to learn from the mistakes other business owners have made. Here is a rundown of normal dropshipping mistakes and tips to steer your business in the correct direction.

tips on successful dropshipping business

#1 Break into a wrong niche

How to identify your desired product or niche. People tend to have their criteria to find their ideal product lines and dropshipping businesses gain extra strength in a niche that fits. More can be learned in Shopify’s dropshipping guide.

#2 Pick an inappropriate supplier

Dropshipping suppliers make mistakes during the order fulfillment process. 84% of eCommerce retailers cite the initial stages of finding and securing a good supplier to be the biggest obstacle to getting their business going.

Low-quality suppliers often mismanage the process which ultimately results in endless frustration with missing items, mismanaged shipments, and low-quality packing, resulting in damaging a business’s reputation.

#3 Fail to keep track of the price and inventory from suppliers

Most of these suppliers are not very tech-savvy and the stock information they share with you might be delayed and not accurate. For a dropshipping business, it is essential to know the price and stock updates so that you can update your information accordingly.

Or else the below issues will bring financial loss:

  • The original price is higher than the resale price
  • Overselling when product is out of stock

Every entrepreneur wants a hassle-free system to manage pricing and inventory. That’s where a web scraping tool can help.

How to use web scraping to solve Dropshipping issues?

Data extraction and data analysis are powerful skill sets to fuel your dropship business, especially in empowering your capability in:

  • product research/selection
  • inventory management
  • quality assurance
  • MAP monitoring, etc.

Read stories: Web Scraping Manages Inventory Tracking for Retail Business, Wine Price Comparison Service Built with Web Scraping.

web scraping data benefits dropshipping

Get insightful data with web scraping

You can do more than just a reseller, but an entrepreneur who takes control of your business.

  • Finding the right niche product line is not an easy job. One way to solve this problem is by scraping the information from multiple supplier websites. After conducting post-analysis of the statistics, your decision could be more statistically dependable.
  • Monitoring the inventory changes of products imported from popular eCommerce websites like AliExpress, eBay, Banggood (includes EU and US sites), Chinabrands, CJDropshipping, and Shopify, WooCommerce and Wish stores, can be automated with a mighty web scraping tool. Also, this feature can monitor the price changes for the variations. When your supplier’s price changes, the system can update your price automatically.
  • If the tool can scrape inventory and price information changes in products and update your website’s information automatically, you have one less thing to worry about.

And web scraping is the good fit for not only drop shipping businesses, but for all eCommerce products research. Watch a video about how to scrape product details and images from AliExpress.

What Web Scraping Features Are Important for a Dropshipping Business?

With most web scraping tools, you are able to use a script (you can call it crawler/scraper/bot as well) to scrape all sorts of the public information from a supplier website according to your scheduling timetable.

#1 Real-time scraping: as real as possible

Web scraping generally takes a longer time than a search engine, so it’s technically hard to achieve real-time updates. For example, Octoparse, a world-leading web scraping tool, adopts an alternative way to provide real-time search results. By scheduling tasks with a short interval time, your database always stores the latest results.

Read story: Researcher gets streaming data with web scraping

#2 API integration: as easy as possible

octoparse api integration

Here are the requirements for dropshipping. The extracted data shall be easily connected to your database (SQL, AWS, Azure, Google Sheet), or other data analytics tools (BI), or visualized tools (Tableau) to connect eCommerce stores (Shopify, Magento). Octoparse API can easily support all the functions.

#3 Data quality: as complete as possible

Any data missing will cause financial loss. It’s important for a dropshipping business to have complete data. IP blocking, CAPTCHA, location of fields changing will cause data missing during extraction. Octoparse uses IP rotation on the cloud extraction to bypass IP blocking to prevent data missing.

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I'm the leader of Techno FAQ. Also an engineering college student with immense interest in science and technology. Other interests include literature, coin collecting, gardening and photography. Always wish to live life like there's no tomorrow.

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