We understand your point here. But there are various reasons why we are charging a fee for our services. I hope this blog post will help you to get a clear picture on why we charge.
Just like any other business, we incur expenses that cost us dearly. As a dropshipping company that provides free portals and tools, we have to cover all part of e-commerce business for you and there would be no compromise on our services or products.
It starts from sourcing of the products, products photography, warehouse rentals, storage maintenance, products cataloging, shipping and handling, delivery, staff pays, hosting server costs, software costs, white-label costs, etc., It all costs us significantly.
And apart from the expected expenses, we also incur unpredictable ones that adds more expenses.
0% Profit Model (you read it right- Z.E.R.O percent)
End price is very important in E-commerce business. Pricing is one important factor that help customers decide whether to buy or not.
We do not set a single penny above the wholesale cost. This should give you an ability to sell products at the right price and also more room for a higher profit setting.
Below is a famous advice from Jeff Bezos(Amazon CEO/Founder) for all the entrepreneurs.
''Think about what are the things you know will be true even 10 years from now because if those are stable in time, everything else will change. Your competitive set will change, that technologies that you have available to you will change, but the customer needs — if you find the right ones — will tend to be stable in time and then you can build strategies around them."
We believe that along with products and delivery, cost would still matter for buyers even after decades from now.
On contrary, if we don't charge you a subscription fee and add profit margin on top of the wholesale cost, your sale-ability would become tough which would harm your entire e-commerce business experience. This is not the reason for you to start e-commerce business, right?
So we better work as a service company than a product company that would result in increasing of your sales.
Why A Dropshipper Should NOT Set A Profit Margin
If we have to make profit from product costs, the margin, we need to set as a dropshipping company, would be higher than a wholesaler's one. This business model is as such. We had to put efforts, money and time that a regular wholesaler or retailer don't need to.
For ex: a traditional wholesaler who deals in bulk selling, don't provide services like photographing, cataloging, shipment services, tracking, customer support, etc., they would be more interested in clearing the stocks as soon as possible, with a minimum work.
On the other hand, a retailer would be selling single pieces at higher profit with more variety of products than more stocks in a same variety. This don't provide bandwidth for retailers to provide services required for e-commerce.
And as a dropshipper, we wear different hats
We acquire the inventory like a wholesaler and sell it like a retailer- with single shipments.
Provide you all the services involved in e-commerce business.
And even more services, as a dropshipper - white label management, delivery management, etc.,
So, if we have to set a profit in products, it has to be high margin and it definitely will affect your sale-ability.
If you have a different opinion, try Googling to know why some dropshipping businesses are not finding a required success.
Free E-Commerce Package
Having your own E-Commerce site is very important in your online sales business. Apart from listing products on marketplaces, you should have an e-commerce website for yourself.
Your own E-commerce site provides you the liberty to set your own profit margin and not share the commission with marketplaces. Moreover you can use it however you want, in your own brand/domain name. You don't need to follow the strict policies set by marketplaces. You are the decision maker of your business and this is possible only when you have your own e-commerce portal.
But getting E-commerce site is an hectic work and not easy to get one. Irrespective of your decision on choosing a SAAS platform or going to a customized website from web development company, you incur a lot of monthly payments or one time payment and still won't know whether the site you received is working properly or not, as there are 999 features in the E-commerce sites that you can't know which is essential or luxury and it differs from site to site.
No two developers would provide you a similar advice on choosing right e-commerce features.
You may start with a low cost website, but while getting it completed, you'd be paying at the higher side.
And apart from that, you also need to deal with hosting, domain companies, server configurations, payment integrations, etc.,
We solved that problem by providing you a standard website with required features that an E-commerce site needs and apart from that, the site we provide you is mostly customizable without requiring a coding knowledge. If there is something more you need, our developers would love to help you with that.
Now you don't have to worry about which features to choose, which is the good hosting, what will be the end result, etc., we just take care of everything.
Reducing The Competition
We don't want to create a flock of sellers. If we made our drop shipping services free, we must be having at least 100 times more number of sellers than our registered count currently.
But that would create a hell lot of competition for you and other indirect problems. We'll also face some consistent issues from amateur sellers who are not serious about the business, unimaginable returns due to misleading sales, etc., which indirectly would have increased both your cost price and the competition.
That will NOT be an healthy business scenario overall. Did you just see what Reliance Jio had made to the other telemarketing companies in India?
Yes, we also have used the benefits of Jio, no denial on that part. But it has literally killed the competition. Airtel, India's number 1 telecom provider, has slashed their costs 10 times.
When a 'free' thing collapses even the mighty industry that has only few mighty players, what would it do to you? how would you compete with someone who is selling at 50% loss? Yes, he hasn't paid any subscription fee and so toying with the concept of pricing.
The 'free' thing didn't do good for Jio either, as they faced a lot of network congestion too and started charging the customers now.
Apart from all that, we are a premium company and we expect a serious sellers who are committed to make profits on long term basis.
Bottomline, the fees we charge is a peanut considering the services and products you'd receive from us.
Not sure? Work out how much it would cost you to spend on acquiring 1000 products and compare that price with our overall service costs(including products).
We are sure you'd love us for reducing all your work at such a low costs and empower you to start an e-commerce business.
If you still have any queries, please feel free to comment below with specific questions and we should be happy to help you.