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Can you start your eCommerce portal without a single product in stock? (Drop-shipping in Indian eCommerce)

So you are bitten by the entrepreneurship bug 🙂 And now you want to enter the hot eCommerce market in India by starting your own e-commerce portal! BUT HEY, you don’t manufacture anything.. and you don’t want to invest any money in stock either! So what will you sell? How will you do the business online?

You can still do it. And the answer to this is DROP-SHIPPING. With drop-shipping, you can sell any product without owning it. You don’t have to worry about fulfilling the orders. You don’t have to worry about blocking capital in stock. You dont have to worry about limitation in variety. The concept of Drop-shipping empowers you to start your full-fledged eCommerce website without stocking any products or investing much money.

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  • So what is Drop-shipping? Drop-shipping means that a seller does not keep goods in stock, but instead transfers customer orders and shipping details to manufacturer / wholesaler, who then couriers the product directly to the customer – (Wikipedia)

So if you are not a manufacturer & you want to start your online shop, you have two clear options

  1. Purchase & stock inventory up-front & dispatch when the order comes
  2. Transfer customer orders & let your vendor fulfill it (i.e. drop-shipping)

Drop-shipping is a normal part of almost every big Indian eCommerce player. Almost all of them use some drop-shipping, sometimes as a complement to their own stock. I have had a personal experience running an online shop and had tie-ups with around 30 ‘vendors’ to do drop-shipping of different products. So from personal point of view, i shall try & explain THE GOOD & THE BAD & THE UGLY side of drop-shipping in your eCommerce start-up in India

 ——- THE GOOD:

» It just takes away the hassle of stocking inventory. So no blocking of capital in purchasing / keeping stock and no risk of dead stock.

» There is no hassle of managing logistics either. So all you have to do is promote your e-commerce site well and attract as many customers and convert that traffic to sales. Once the sale is completed, the back-end is some one else’s responsibility.

» With drop-shipping, you can increase your product offering & variety without investing more in inventory. You can have unlimited products on your online shop by associating as many drop-shippers possible. You can have the best variety in a particular niche category

Seems like a cool idea, isn’t it? but drop-shipping has its own disadvantages too.

 ——- THE BAD

» Since distributors and manufacturers are different for each product category, it’s more difficult to manage. When the number of your vendors increase, there is more chance of failure in proper correspondence.

» One of the biggest issue with drop-shipping is higher shipping charges: if the customer buys 3 products from 3 different vendors then you will be paying courier charges on 3 different packages from 3 different companies. And someone, either you or your customer, will have to take that hit..

» At the end of the day, you do not have control on what is being delivered to your customer. The quality of product may not be up-to mark. The product could be defective. And then, you would get in a catch 22 situation where you might not be able to even spoil your relation with the vendor by doing returns & neither can you disappoint the customer.

» It is understandable that you might be just starting out & might not be able to generate huge sales for your vendors (at least, initially). Then, the vendors might require some minimum sales & you have to figure out if your volumes fit with their minimum requirements.

 ——- AND THE UGLY

When you use drop-shipping for your eCommerce venture, you need to have stringent control over every order and keep your vendor and your customer in the loop. Because, even though shipping is vendor’s responsibility, it is your brand that is attached to the transaction. So, if anything goes wrong, the consumer will blame you and not your vendor.

TO DO OR NOT TO DO.. 

All in all, it’s a great technique if executed well. It allows you to hand-pick & sell the widest variety of product possible in a particular category. The best eCommerce websites don’t just sell from a single vendor, rather they take advantage of the unlimited space by selling from every vendor who is worth it & can meet your standards of product and service.

WHERE DO I FIND DROP-SHIPPERS FOR MY CATEGORY?

Anyone can become your vendor & do the drop-shipping for you  – A Manufacturer, A wholesaler, A distributor. Where do you find them? on other eCommerce sites!

The best resource to find vendors is ebay India. A lot of manufacturers / distributors are selling their stuff on ebay. Perhaps, they can be your vendor too! On ebay, you will find a lot of interesting stock for your store. And there are some very good vendors (based on their rating) with whom you can partner to provide variety on your store. Such vendors take care of all the stocking & shipping, and you just have to pass-on an order to them.

On other ‘jack-of-all’ e-commerce websites, most of them prominently display the vendor’s name. Try googling them & contact them. Most of them would readily agree to become your vendor too & offer their range on your eCommerce site too! You will have to really dig ebay & other ecommerce sites to find the best vendors & products for your online shop.

PS. We don’t carry a list of Indian Shoppers and there isn’t an open list of the same. But you can safely assume that anyone & everyone who is selling online can become your drop-shipper. The best way to finding your drop shippers in India has been aforementioned.

For reference you can check out Doba.com. It is one such drop shipping company and the biggest player in international markets. Although, the thing to note here is that – no such players are currently working in India. Every website in India, sets up their own network of vendors and suppliers.

TERMS TO CONSIDER WHILE NEGOTIATING WITH A DROP-SHIPPER:

  • Payment terms : Initially, you might have to trust the vendor & pay him in advance before he ships the product. And this is where it becomes more important to choose the right vendors to work with.
  • Margins : They majorly depend upon the category. The industry norms are 15% to 30% commission in apparels, gifts, etc & 5% to 10% margin in electronics. It also depends upon the brand. You are bound to get smaller margins on bigger brands as compared to smaller brands.
  • Product Database :  To list their products, it is necessary for the vendor to provide you complete database & all imp information related to the product being offered.
  • Delivery time-lines : This is the most important point in ecommerce. You must try & get your vendor to agree on ‘Dispatch within 24-48 hours of receiving the order’ This is where ‘Vendor Agreements’ can be of great help. It is always advised to sign a Vendor Agreement on this & other important terms before you begin your operations.

So this was all from a personal experience & perception. Looking forward to hear other thoughts on this topic


Do you already have your products and vendors in place? Would you like to get started and launch your business now? Give Zepo a try and start your online store in the next 5 mins.

Yes, I’d Like to Start my own Online Store

 

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Tanya Rao

Tanya Rao

Curious Growth Hacker @ Zepo. Traveller. Foodie. Cider Lover. Social Media Enthusiast. Audiophile at the Cellular Level. Start-up Kid. Sarcasm is First Language. Madness Personified. Love Mondays.

  • Universel EStore

    Please send a vendor agreement copy to universelestore@gmail.com

  • sudheesh

    Hi,Thankyou..thanks alot ZEPO..Can you please send me the vendor agreement on itsmesudheeshkumar@gmail.com

  • Hi there,

    Have sent you the same. Please do have a look at it.

    • kichumarine

      Thank you!!

  • kichumarine

    Hi zepo very good information thank you very much please send me the vendor agreement on kichumarine@gmail.com

  • sanjay

    can you please send me vendor list to my email ansalads@gmail.com

  • Alkesh

    kindly send a copy of vendor agreement –

    Email: business@connectwide.com
    Thanks,
    http://www.connectwide.com

  • Sachin Jain

    Zepo, please send the vendor agreement copy at my email id cssachinjain.2012@gmail.com

  • kindly send a copy of vendor agreement @ admin@unikdeal.in

  • pankaj

    Very informative. Would request you for the vendor agreement.Thanks in advance.
    Pankaj Mishra , apexpankaj001@gmail.com

  • pawan chaturvedi

    Very informative article

    Very informative. Would request you for the vendor agreement.Thanks in advance.
    lucky258333@gmail.com

  • binu

    Please send vendor agreement sample binukar@gmail.com

    thanks in advance
    Binu

  • Thanks Amanda! Glad you liked the article.

  • Hi Jitesh,

    We’ve sent you the same. Please have a look.

  • Amanda

    Great information.

  • Amanda

    Hi Zepo, great information!
    Just wanted to ask you a question… Hope you’ll answer soon

  • Jitesh

    Very informative. Would request you for the vendor agreement.

    Thanks in advance.
    Jitesh
    http://www.Wagonjo.com

  • Rohit

    Awesome source of information. Just what I was looking for. Can I request you to send me a sample vendor agreement form on bsmart.rohit@gmail.com?

  • Shefin Khadar

    Thanks for sharing a very usefull information, Kindly share me the Vendor Agreement file to my email Id hishefin@gmail.com

  • Please send me a copy of vendor agreement…already have a functional Handicrafts Marketplace..ope to all handmades and handcrafted from India…
    regds
    Vani
    http://www.dastkari.com

  • Kindly send me some details of Drop shipping companies, that to contact further for my website.

  • Will you please send me the vendor agreement sample form to dadhibaban1985@gmail.com

  • Nitish Goel

    Please send a vendor agreement copy at nitishsayhi@gmail.com

    Thanks 🙂

    Have a nice day.

  • Hi Saket,

    In case of drop-shipping, your vendor will issue an invoice to you. However, you will need to issue to an invoice to your customer. Your vendor can’t issue it on your behalf.

    In case of interstate business, every state requires you to fill various shipping forms. You can find some help through another post we wrote: http://www.zepo.in/blog/2014/03/20/mystery-behind-shipping-forms-busted/

    Hope this helps.

  • Hi Anil,

    We’ve sent you the same. Please do have a look at it.

  • Hi Robin,

    We’ve sent you the same. Please do have a look at it.

  • Hi Sahir,

    We’ve sent you the same. Please do have a look at it.

  • Anil Chauhan

    Please send vendor agreement sample form to chauhananilk@gmail.com

  • robin

    I want to start dropshipping of products.I shall be benefited if you can send me vendor
    agreement sample copy at saharobin@gmail.com

  • Arun

    I want to understand sales tax liabilities in case of drop shipment. If I am an ecommerce portal and has tie with with manufacturer for drop shipment model, do I need to pay sales tax on invoice I am making to customer? Also manufacturer will be paying sales tax because he is selling the product to me though indirectly?

  • sahir.momin

    Hi zepo very good information thank you very much please send me the vendor agreement on sahir.momin@gmail.com

  • saket

    What about the tax…how we pay to the governament..We will give our invoice or we will give vendors invoice…how do we do interstate business…

  • Hi Raj,

    We’ve sent the sample agreement to your mentioned email id. Please have a look.

  • Hi Raj,

    We’ve sent you the same. Please do have a look at it.

  • Raj

    Hai. it is more informatory. i would like to start an e commerce. can u please mail me the vendor agreement on rrajwins@gmail.com

  • Mandeepakpal Singh

    Hi
    I want to start my own website using dropshipper service, so please send me a sample agreement on my email id beyond087@gmail.com.i shell be thankfull to you

  • imrantak

    hi i need to start a website with dropshipper concept,so kindly send me send me vendor agreement on imrantak@gmail.com

    • Hi,

      Have sent you the sample vendor agreement on your mentioned email id. Please do have a look at the same.

      • ekta

        Hi there. Wonderful and very helpful article I would also like to request The sample vendor agreement at sharma-e@hotmail.com

        • Hi Ekta,

          We’ve sent you the same. Please have a look at it.

  • Himanshu

    Hi Zepo,

    Thankyou for giving this useful information. Can you please forward me the vendor agreement as well- himanshu311@gmail.com

    Cheers!!
    Himanshu

  • hii zepo ur articles r really awsm n m a regular reader of ur articles..i m also launching my ecommerce soon..plz mail me d vendor agreement plz my email- jrnayak27@gmail.com

    • Hi there,

      We have sent you the same. Please do have a look.

  • bipin

    Mam

    kindly please mail the vendor agreement in my id :bipinsinghranaiit@gmail.com

    thank you

  • Aitm Ist Batch

    Hello,

    I also want start online shopping store, Kindly provide the Vendor Agreement details at yatin_sharma4@yahoo.com

    Regards,
    Yatin

    • Hi Yatin,

      Have sent the sample vendor agreement to your mentioned email id. Please do have a look.

  • bd mishra

    hi i am bd mishra,and want to start online shopping store,on drop shipping concept,could you provide me the detail and vendor agreement (so that i could go through and understand the concept more clearly) on bd007m@gmail.com.

    regards

    bd mishra

  • sourav

    Hi, I wanted to ask that is it necessary to register my e-commerce business before starting it. Do i need to register it as a Company as major websites like flipkart, snapdeal etc are registered as a Pvt Ltd Company??
    Plz reply soon….

  • Dhruv Shah

    hello sir…its a very nice information given over here..the good and the bad side of business …thank you …I want vendor agreement and also other if you do have..dhruvshah4598@hotmail.com
    Thank You

  • Hi Rudra,

    Have sent you the same. Please have a look at the same.

  • Hi Pankaj,

    Have sent you the same. Please have a look at the same.

  • Harish

    Nice information for all e-commerce startups. Can you also mail me the Vendor Agreement Contract at harish318 @ gmail.com

    • Hi Harsh,

      Have sent you the same. Please have a look at the same.

      • Aparna Amte

        Hi..Thanks for the info! Possible to mail me a copy as well of the sample agreement @ aparna_amte@yahoo.co.in ? Cheers!

  • ecomm1103

    hi can you plz mail me vendor agreement on rudra1103@yahoo.com

  • Pankaj Naik

    Can you please send me the vendor agreement file to my id? Thanks in advance !
    My e-mail id is

    pnaik7790@gmail.com

  • Nidhi A

    Thank you very much for the very useful info…would be great if u can mail the Vendor Agreement Contract copy at profit.mybusz@gmail.com

  • paperwaala

    Hi,

    Please can you send me the vendor agreement contract to info@paperwaala.com

  • Sagar

    Please can you send me the vendor agreement contract at sagar_patel5858@yahoo.in

  • Amritpal Singh

    please send me the Vendor Agreement Contract copy at amritpalsingh2717@gmail.com

  • M.Rajan

    Sir,
    I thank you for your guidelines, which are very much helpful to a newcomer, like me. I will be very grateful to you, if you will send one copy of the drop-ship vendor agreement contract, to my mail id: mathewtpr@gmail.com

  • Hi Sowmini,

    Have forwarded the same to your mentioned email id. Do have a look.

    • micky

      hi
      please send us agreement copy on mohitable@gmail.com

      • Hi Mohit,

        Have sent you the same. Please do have a look at it.

  • Hi Amit,

    We have forwarded the same to your mentioned email id. Please do have a look.

  • smitha

    Thanx for the very useful info…would be great if u can mail the Vendor Agreement Contract copy @sowmini_john@yahoo.co.in
    sowsmi

  • Hi Zepo,
    Its an amazing information sharing you are doing and helping others. Can I also get a copy of Vendor Agreement Contract.

  • rontydutta2012@gmail.com

    please send me the Vendor Agreement Contract copy at rontydutta2012@gmail.com

  • rakesh

    Could you please send me the vendor agreement file to my id? Thanks!

    • Hi Rakesh,

      We have forwarded the same to your above mentioned email id.

  • Hi Manjunathan,

    The same has been forwarded to the ngsp.in email id. Hope you have received it.

  • Hi Drsh,

    Have mailed you the same.

    • drsh

      Thanks a lot for sending me the sample vendor agreement

      • Pleasure is ours Drsh.

  • Hi Manjunathan,

    Have mailed you the same.

  • Manjunathan Sheshadri

    Hello
    Thanks for sharing a veryusefull information, Kindly share me the Vendor Agreement file to my email Id

    manjunathan@ngsp.in
    manjunathan_s@live.com

    Thanks in Advance

  • drsh

    I want to start dropshipping of products.I shall be benefited if some send me vendor
    agreement sample copy.

  • Vijay

    Hello, please send me a copy of the Vendor Agreement. Thank you.

    • Hi Vijay,

      Have mailed you the same.

  • sujeet

    Was really informative.thanks

    • Glad we could be of help Sujeet. 🙂

  • Yogesh Patel

    Can you please send me the Vendor Agreement Contract copy at er.yogesh.2006@gmail.com?
    If possible please send me any other Agreements/Contracts that are needed in the process of startup eCommerce business.
    Thanks for your kindness.

    • Hi Yogesh,

      We have mailed you the sample vendor agreement. Hope it helps.

  • Manjunathan Sheshadri

    Hello,
    It was Really helpful, Kindly share across the vendor agreement file to my mail id as well

    manjunathan@ngsp.in

  • Sri

    Hello
    Can you please share across the Vendor Agreement file to my email id as well ?
    shriram.jamadagni@gmail.com
    Thanks in Advance
    Sri

    • Hi Shriram,

      Have sent the same to your mentioned email id.

  • Hi Ramesh,

    In case of COD option too, the drop-shipping process will remain the same depending on the agreement you draw with your vendors. You will have to agree upon who will bear the COD collection charges and how the payment will be settled.

    • girish lad

      Can you please send me the Vendor Agreement Contract copy at ladgirish18@yahoo.in ?
      If possible please send me any other Agreements/Contracts that are needed in the process of startup eCommerce business.
      Thanks for your kindness.

  • ramesh

    hi,
    if the payment option is cod, how the system is work..

  • Sumit Deb

    Hi,
    The article that you’ve shared have boosted my confidence to start up an e-com portal. Basically i am planning to drop-ship some products from wholesalers and some products from manufacturers. So could you please send me a copy of the vendor agreement.

    Thanks

    • Hi Shubh,

      Most certainly. We have sent across the sample vendor agreement to this email id – mailme.sumitdeb@gmail.com.

      All the best to you!

  • Rohit

    Hello

    You mentioned about drop shipping here but as far as i’m aware none of the payment gateways support that? How do you suggest one should go about taking payments from users?

    Thanks
    Rita

    • Hey Rohit,

      A word of advice, if you are a drop-shipping business and you’re applying for a payment gateway, ready up your website and apply for it. You don’t have to necessarily mention that you run a drop-shipping business. That shouldn’t be a problem.

      Also, there are other online payment options like bank transfers. You can try them out as well.

  • Rakesh Nigudkar

    Nice article and quit informative for one like me who is planning to start a shopping portal. Can you please email me a sample vendor agreement which you have mentioned. I will be needing some more expert guidance from people like you to make a successful shopping site….Thanks in advance

    • Hi Rakesh,

      We have mailed you the sample vendor agreement copy. Please have a look at the same.

      And whatever help you need in setting up your online store, do let us know. We’d be happy to jump on a call with you and discuss how we can help you.

  • Rahul Vaidya

    hi please email me the sample agreement copy

    • Hi Rahul,

      We have mailed you the same. Please have a look at it.

  • Ajajahmed Shaikh

    hi please email me the sample agreement copy

    • Hi Ajajahmed,

      We have mailed you the sample vendor agreement for drop-shipping on your registered email id.

  • babbar

    Hey Thank you for such nice blog,
    I would request if you can share with the Agreement sample copy so that I can get an idea of the same and then will work accordingly.

    • Hi Babbar,

      We have mailed the same to your email id. Please have a look at it. And let us know if any more assistance is required from our end.

  • Intekhab

    Ok Kool, *not abt this post here but in general I have gone thru your proposition (and it seems to be nice). Just that how do I decide when I have other options like sh**ify, M**t*ack and others. Tell me WHY ZEPO (over the others) 🙂

    • Hi Intekhab,

      Glad to know that you liked what Zepo doing and are willing to give us a shot! We suggest you give our 14-day free trial a try, which will give you a hands-on of the platform, to help you make a more informed decision.

      As for you asking us, WHY ZEPO; well, there are plenty reasons for WHY US! 🙂 Apart from giving you the simplest and easiest user interface, we bring to you over 100+ free themes to design your store. To ensure that you are all ready-set-go to start selling online, we offer you a free payment gateway and FedEx logistics support at special rates. And amazing customer support for whenever you need us!

      However, that’s us blowing our own trumpet (:-P), you can find a better comparison between us and our competitors here:
      1. http://www.zepo.in/blog/2012/09/16/zepo-vs-the-competition-comparing-e-commerce-solutions/

      2. http://www.zepo.in/blog/2013/03/05/zepo-shopify-india-ecommerce-platforms-compared/

      Hope this helps! If you’d like to get to know us more, please feel free to give us a call.

  • umang

    I’m planning to start my own portal however not aware from where i can get drop shippers detail who can gimme picturtes & detail of their products to showcase on my website

    • Hey Umang,

      We don’t maintain an inventory of drop-shippers and their products. Unfortunately, there is no open of the same for India, too. However, you can try out websites like ebay.in, etc, which lists seller information and ratings. Try googling them & contact them.

      You can safely assume that anyone & everyone who is selling online can become your drop-shipper.

  • So how should you go about looking for your product suppliers? The first approach you can take is through the search engines. You can start off by searching for ‘Manufacturers directory’,

  • Akash

    This is a very interesting article. How do you suggest synchronizing inventory with distributors and the backend of your ecommerce website? At times the distributor is out of stock on certain items and you want to make sure these items aren’t ordered by clients. Should the sync happen everyday? Would distributors be fine with providing this report everyday? Thanks..

    • Hi Akash,

      As of now, we don’t that facility on Zepo. However, we are planning to expose our APIs in the next couple of months. After which, it should be easy for you to integrate such Point-Of-Sale software compatible with Zepo. In such a scenario, you will be able to track inventory across various sale terminals that you may have.

  • Rahul

    This article is a great help for beginers in e-commerce business.

    • Thanks Rahul!

  • kartheekb

    Once again a useful article. I am searching ecommerce related stuff over internet from last few months. After reading the articles here.. I realized. i have wasted my time on other sites. Thq.

    • Thanks for the generous appreciation Kartheek! 🙂 Please do keep visiting.

  • shafs

    initiating an eCommerce site in India. hope to more useful tips from you

    • Congrats Shafs! All the very best in your venture! 🙂

      • Lalit Jethani

        Hi ZEPO. Please send me the drop shippers vendor list too,I must say I am really impressed by your work. If I found a niche product I will choose zepo only.My email is lalit.jethani14@gmail.com

        • Hi Lalit,

          Thanks for your generous appreciation. 🙂

          We have sent you the sample vendor agreement. But unfortunately, there is no open list of drop shippers in India. And that is an endeavour that you will have to undertake personally.

          However, we are in the process of writing a post on how to go about finding drop-shippers for ecommerce. Do keep a lookout on this space for more updates.

          Hope this helps.