So, you’ve decided to start selling online, but you’re not sure which type of e-commerce business model is best for you. You might be deciding between dropshipping and private label dropshipping if you want to start an e-commerce business that doesn’t require you to buy inventory up front.
All of these ways to run an e-commerce business can be profitable, but each has its own pros and cons. So it’s important to think about the pros and cons of each before you start.
Now, if you’re brand new to e-commerce, dropshipping is the best way to get started.
We suggest that you start with dropshipping because it doesn’t require a big investment up front. You don’t need any stock to get started. Once you’re good at dropshipping and have found a product that makes money, you can go ahead and put your own name on it.
This article will explain the difference between dropshipping and private label. Then you can decide which type of business is best for you.
WHAT IS DROPSHIPPING?
With dropshipping, you don’t have to own any of the products you sell. You use your own website, social media, or any other platform to sell someone else’s product.
When a customer buys something from your store, this is called dropshipping. Then, you buy that item from the supplier. The product is then sent directly to the customer by the supplier on your behalf.
Dropshipping: How It Works
Dropshipping’s pros and cons Dropshipping’s pros
Low Money Spent
Dropshipping is a lot cheaper to start because you don’t have to buy the products right away. At first, you won’t have to spend much.
Many products to choose from
You can change the type of product you sell at any time when you use dropshipping. So you can always test different products and try out new markets.
Low Risk
Dropshippers don’t have to have the product in stock. Even if some of your products aren’t selling well, you don’t have to worry about having too much stock. That way, you can change your product whenever you want.
All of these pros may sound great, but let’s talk about some of the problems with dropshipping.
Dropshipping has some drawbacks.
More Competitive
Now that it’s easier to start a dropshipping business, you can expect more people to use it as their business model. People might also be selling the same products, making it harder for you to stand out.
Product Branding: Another problem with dropshipping is that you can’t brand the products you sell. Most dropshipping companies sell products that aren’t branded. So, dropshipping isn’t usually the best way to run your brand’s business in the long run.
This is where private labeling comes in handy.
How does private labeling work?
When you do private labeling, you sell products with your own label or brand name on them.
Dropshipping and private labeling are not the same thing. When you private label a product, you have more control over it than when you dropship it.
Pros and cons of having your own brand
Private labeling is a business model that has pros and cons that make it a better choice for some entrepreneurs than dropshipping.
What’s good about private labeling
Name-brand goods
With private labeling, you can sell products that have your name on them. With this business model, the manufacturer will put your brand and logo on the product and let you customize it using your colors or branding guidelines.
Price of a product
With private labeling, you have more say over how much to charge for a product. Since you are buying from a specific manufacturer, you can get better prices and have more control over the products than with Dropshipping.
The first products
The fact that you can brand your own products gives your brand its own identity and makes you stand out from your competitors. You can also put together any products you want to make a unique experience for each customer.
Even though these are big benefits of private labeling, this type of business model also has some problems.
Private Labeling Disadvantages
Higher investment up front
If you are new to e-commerce, you should know that private labeling will require a bigger investment up front. When it comes to private labeling, most manufacturers or suppliers will need a minimum order quantity (MOQ) from you. So dropshipping is a better way to start a business if you are a beginner.
More Risk
When you do private labeling, you’ll have to keep stock on hand, which means you’ll be taking on more risk. So, we suggest private labeling when you already know that a product will sell. If your product doesn’t sell, you’ll have a lot of stock that’s just sitting there.
Dropshipping vs. Private Label or Other
In short, private labeling is when you sell something under your own brand or label. This gives you some control over how your product is branded and how it grows. You can also sell products that are ready to ship and have your own brand or logo on them.
With dropshipping, you sell the brand-name or generic products of another company without having to keep any stock on hand.
Dropshipping is different from private labeling in that you don’t have to keep any inventory on hand. So when you use dropshipping, you have less risk but less control.
Private label dropshipping is a way to do both of these things at the same time.
Private label dropshipping lets you sell products under your own brand without having to keep any stock.
The difference between private label dropshipping and white-label dropshipping
Many suppliers or manufacturers will give entrepreneurs who want to dropship branded products two options: private label dropshipping or white label dropshipping. There are a few differences, but these models let you sell branded products and keep track of stock.
With private label dropshipping, you have the exclusive right to sell a product from a certain manufacturer or supplier. This lets you change the color, brand, and other details of the product.
When you sell white label dropshipping products, you get them from a manufacturer or supplier and put your own label on them. This is the most expensive way to do dropshipping, but you can’t choose from as many products as you can with private labeling. You can change the logo or brand name when you use white label dropshipping. Still, you won’t be able to change much about the product. You also don’t have the right to sell that product on your own. So that anyone can put their own name on the same product.
Private labeling gives you more control over your products and exclusive rights. Even though private labeling can be more expensive, it can lead to higher profits.
So, let’s talk quickly about how to Dropship private label products.
How to make your own brand of Dropship products
Research on products and ideas for products
The first step of any e-commerce business model, including private label dropshipping, is to find products to sell. You should do market research to find out what products are popular in your market.
You can do research by going to Tik-Tok and searching for “Tik-Tok made me buy.” Then you can look through all of the videos to see what people are buying. Tik Tok is now the biggest social media platform in the world, so you’ll find a lot of videos of people buying and using products.
Once you’ve found a few things you might want to sell, search for them on Amazon to find out how well they sell online. You can also use Google Trends to check trends in broad markets or niches.
For those of you who want a more customized way to look into products. Here is a list of five of the best tools you can use to find ideas for products.
Niche Scrapper Sell The Trend Thieve.co EcomHunt
Dropshipping Center for AliExpress 2. Find dropshipping suppliers for private labels
If you want to start private label dropshipping, you’ll want to make sure you work with the right companies to get your products.
Private label dropshipping suppliers will let you find products that you can brand and change to give your customers the best shopping experience.
One way to find the best private label Dropship suppliers is to use some free dropshipping apps and then contact each supplier individually. This plan is easy to understand. You just need to find the products you want to private label and send a message to the supplier to see if they offer private label drop ship products.
Open a dropshipping store
Once you’ve found the right product and supplier for your private label dropshipping business, the next step is to set up a drop-shipping store.
Your Dropshipping store is the face of your business, so you’ll want to make sure you have an interesting website.
We suggest that you build your store on Shopify, which is the best eCommerce platform in the world. Shopify has a lot of themes that you can use to change how your store looks and feels.
If you want to save time, you can also hire someone to set up your Shopify store for you or buy a store that’s already been set up.
Here’s a step-by-step guide to making your own Shopify store.
Open your private label dropshipping store and get the word out about it
Once your store is ready, you can launch your dropshipping brand and start promoting it.
There are two ways to get people to your store: through free traffic or paid traffic (ads).
When you first open your store, we suggest that you use any free ways to bring in customers. SEO, Facebook groups, and Tik Tok are just a few of these.
If you want to promote your product and have the money to do so, we recommend paid ads on Facebook, Instagram, or TikTok.
Find the right model for your e-commerce business.
A drop-shipping business can be started in many ways. Before you start, you’ll want to make sure you choose the best business model for your eCommerce site.
If you’re trying to decide between dropshipping and private label, you should think about how much money you have, what you’re selling, and how much risk you’re willing to take when starting your business.
Dropshipping is what we recommend for first-timers. You can start private label dropshipping once you’ve found a product that sells well.
So, what you’re really doing is using dropshipping to test out products. Once you know your product will sell, you can start private label dropshipping to build your brand.
To sum up how to start a dropshipping business under your own brand. Here are the steps that you will need to take.
- Market research and coming up with an idea for a product
- Find dropshipping suppliers for private labels
- Make an online dropshipping store and set it up.
- Start your private label dropshipping store and get the word out about it.
No matter what you decide, keep in mind that running a business takes time and that you should never stop learning.
