E-Commerce Vs DropShipping is two big shots in the business industry. Both businesses are not the same. If you landed on this post, then you must be seeking to find the difference between E-Commerce Vs DropShipping.
In this post, we have detailed some of the answers to related questions that might be running through your mind. Thoughts like; Is Dropshipping profitable? What are the Legit E-commerce websites in Nigeria? Online Stores where you can buy from in Nigeria, among other searches.
Dropshipping and E-commerce are both business models that have proven strategies and steps which they work with. These businesses are some of the lucrative businesses in Nigeria that any entrepreneur can invest in. There are also some skills that you need to have as an entrepreneur that we have detailed under another post. You can check it out on that link.
The Big Difference Between E-Commerce Vs DropShipping
Before picking any of the business models you wish to venture into, then you need to know the difference between E-Commerce Vs DropShipping.
To clearly understand the big differences between E-Commerce Vs DropShipping, we would introduce their definitions first, and what each business model entails.
After you must have known the meaning of E-Commerce and DropShipping, you should also know the Pros and Cons of E-Commerce and DropShipping, and between E-Commerce Vs DropShipping, the business that will best suit your interests.
What is E-commerce?
E-commerce is the buying and selling of goods and services on the internet. The term E-commerce is a short form of the word “Electronic Commerce”. Electronic has to do with gadgets and technology, while commerce on the other hand simply means Business.
Before the introduction of E-commerce, buying and selling only used to occur over the counter with the buyers and sellers physically present. During the older days, sales used to be by trade and batter as there was no paper currency.
With the current technological innovations, you no longer need to go through the whole stress of walking to the market to purchase groceries. With E-commerce, you can remain at the comfort of your home and have your goods delivered to you.
E-commerce bridged the gap between the home and store. Shopping became a lot easier and more interesting with the introduction of online shopping.
E-commerce has a lot of Pros because you can buy online and complete your transactions by making payments online. In E-commerce, the customer browses through a catalog of products on the seller’s website, makes a pick on the particular product he wishes to buy, fills out a form where he would input his delivery address, and pay online or at the point of delivery depending on the terms of the business.
The cycle of E-commerce cannot be complete if the seller fails to deliver the required product by the customer or if the customer did not receive his expected product.
Categories Of E-commerce
The E-commerce industry can be categorized into the following:
Business To Business (B2B)
Business To Customers (B2C)
Customer To Business (C2B)
Customer To Customer (C2C)
Just as their names imply, sales and transactions are made between different entities.
Pros Of E-commerce
1. Location is not a constraint on the sales and purchase of goods with E-commerce. No matter the geographical location, you can get what you want in the comfort of your home.
As a customer, you are treated at your best because you get to be served best. The seller takes up the whole duty of delivering the product to you.
2. There are no time constraints to E-commerce. Most online stores function 24/7 just like some of the online stores in Nigeria we listed in our previous posts. You can order from whatever product you want at any time and season of the day.
Cons Of E-commerce
1. The customer’s information and personal details are not entirely secure despite the claims made by the online Stores. Most online stores allow you to buy through a trusted vendor who would get the product to you. In that way, your information is secure and only available to your vendor.
2. The cost of setting up an E-commerce website and store is relatively expensive. To become a high player in the E-commerce industry, you need to have enough funding and substantial capital that will see you through the early stages of the business.
3. Delivery of wrong or delayed orders. Some E-commerce websites are not effective and may deliver damaged goods to their customers. However, the customer can return the product if it does not suit his or her taste.
What is Dropshipping?
Dropshipping is another business that has a similar model with the E-commerce industry. In Dropshipping, the orders on goods are received and delivered to the customers without selling them in stock or stockpiling the goods.
In other words, Dropshippers promote and sell goods that are not theirs. They only re-route the goods whose orders they receive to the suppliers or sellers who Ultimately deliver them to the customers.
Dropshipping is an interface between the seller and the buyer. The Dropshippers may help the producers sell more products with little or no extra effort.
The reputation of the Dropshippers lies in whether the suppliers deliver the goods to the buyers in good conditions. If the goods became defective in the course of supplying, the Dropshipper would be considered a party to the damage of the product. The Dropshipper does not Handle inventory on the available stock.
Pros Of Dropshipping
1. Dropshipping does not require as much capital as do E-commerce Industries. This is another one of the significant differences between E-Commerce Vs DropShipping.
2. To enter into the Dropshipping business, you may only require the contact of the manufacturers, distributors, and that of the customers if they are not available on the customer database of the manufacturers.
3. You can run a Dropshipping business from just any location. This is a similarity in the E-Commerce Vs DropShipping businesses.
Cons Of Dropshipping
1. The integrity of a product depends on whether the customers get what they want and what they ordered. If there is any damage to the product even during production, the Dropshipper bears the Brut.
Similarities Between E-Commerce Vs DropShipping
1. Both E-Commerce and DropShipping are managed online
2. The business models of E-Commerce Vs DropShipping entails that the customer places an order and has it delivered to his address.
Differences Between E-Commerce Vs DropShipping
The initial aim of the post was to get you to understand the big differences between E-Commerce Vs DropShipping. After having read through the descriptions of both the E-Commerce and DropShipping business models, you may have a clear picture of their differences.
However, we have explained the major differences between E-Commerce Vs DropShipping
1. E-commerce websites sell varieties of products while Dropshipping businesses focus on getting a particular product delivered to their prospects.
2. E-commerce websites market different brands while Dropshipping services focus on a given brand.
3. The capital investment for starting up an E-commerce site is comparatively expensive with Dropshipping
4. From the pool of many products of the E-commerce websites, his profit margin is large but this is not the same with the Dropshipping services.
5. E-commerce websites are more of entrepreneurs and can handle the business and order fulfillment whereas Dropshipping services are not in charge of the delivery logistics.
6. E-commerce sites brand the product, a Dropshipper does not handle the product sales or advertising. He is only concerned with the distribution between the producer and the delivery man.
Check out also, our other post on Drop Service- What is Drop Service and How Do I start Now?
There are other differences between E-Commerce Vs DropShipping, but the few we listed in this post are some of the major differences.
You must have become knowledgeable of the two businesses and the one that may interest you to invest in. Whether it’s E-Commerce or DropShipping you decide to go for, both are profitable businesses in Nigeria.