eCommerce is an excellent field to get into these days as it is one of those markets that keeps growing steadily. Predictions say that global eCommerce sales will hit $4.2 trillion in 2021, which is a considerable cake to cut your little piece of profit from.
However, just like starting any other business, it is not the most straightforward task for newcomers. What would you sell, and how would you market it? Is there a profit to be made in your particular niche?
One of the most important questions you will ask yourself is what eCommerce business model you should adopt. Will you open your eCommerce store and handle inventory, warehousing, and shipping? Or, should you consider weighing in on the dropshipping vs. drop surfing debate and use one of these models?
Let’s start with a quick refresher course on what dropshipping is and take it from there.
What is Dropshipping?
Dropshipping is an order fulfillment method in eCommerce. It comes with a significant advantage over your traditional eCommerce store in that you can outsource a considerable part of your inventory and shipping to someone else. With no up-front inventory expenses, starting a dropshipping business is easy and cheap – all you need is a solid understanding of how to use an eCommerce builder. You “only” need to create an excellent selection of products, market them well, and then provide top-notch customer service.
Here is how it all works: A dropshipper creates an eCommerce website, selects their products and wholesale suppliers for those products, and then lists them on their site. Once a customer places the order on a dropshipping site, the dropshipper forwards it to the wholesaler. The supplier takes it from there and ships the product to the customer. All you have to do is source the best products, offer a reasonable price, and make sure your customers are happy with the support they are receiving.
How About Drop Surfing?
Drop surfing is essentially a type of dropshipping that focuses on maximizing profits. This business model is also often referred to as “surfing the wave,” an expression that earned the process its name. Let’s see how drop surfing works in practice.
This eCommerce model operates in the same manner as standard dropshipping, with a single exception. Here, the dropshipper focuses on maximizing their profits on top of their regular dropshipping duties. Many old-school sellers agree that drop surfing is just a smart way to do traditional dropshipping and that the new term is simply a marketing trick.
You can achieve what is considered to be drop surfing in two ways. The first means that you choose a different supplier for each order, basing your choice on where you will get the best deals. It complicates the process slightly, as selecting suppliers is not as simple as it may seem. It works best if you have the time to make sure the new supplier matches the quality of the product and provides equal or better shipping costs and timeframes.
The second definition of drop surfing you will see online is the one that explains drop surfing as switching products on offer to make as many sales as possible. It means doing in-depth research and finding items that are currently trendy or are expected to be fashionable in the future. It is exceptionally time-consuming, and you will be facing a lot of hit-and-miss moments in the lifespan of your online store. Still, if you select the right products, you will undoubtedly make much more sales and earn significantly more money.
Now, let’s get back to our debate: drop surfing vs. dropshipping. Let’s cover the pros and cons of each so that you’ll have the information you need when starting your new online business.
Pros of Dropshipping
We’ve already covered the basic pro of dropshipping: no inventory. With any type of dropshipping model, you don’t have to store any inventory, keep stock of items, or handle the shipping yourself.
With that in mind, traditional dropshipping has some advantages compared to drop surfing. Since you are working long-term with the same supplier, and hopefully, the same customers, you get the unique opportunity to build long-term relationships. Furthermore, you get to build your brand, which is something that will undoubtedly pay off in the long run. Investing in earning a returning customer is much more profitable than constantly chasing new ones.
Also, the most significant benefit to the traditional dropshipping model is the possibility of doing it part-time. Once you achieve a deal with a good and reliable supplier, complete your website, and list your products, your ongoing work is almost done. Since it is predictable, you can also automate many remaining tasks, for example, by using order fulfillment software. It is not something you can do as quickly with the drop surfing model. All you have to do is provide exceptional support, handle an occasional return or two, and work on updates to improve the customer experience.
Cons of Dropshipping
As mentioned before, the major downside of dropshipping model is that a major portion of your business is out of your control – the product itself. You cannot control its quality, how it will be shipped, and many other significant aspects of the dropshipping business itself. You should test each provider, but you’ll have to compromise on some aspects. Still, once you manage to score a good supplier, you’re set.
Compared to the drop surfing method, the most significant con of dropshipping is the slim profit margin. After all, since it is effortless and cheap to get started, you’ll be facing a lot of competition. They will be offering the same products for next to nothing in an attempt to attract customers. While you can provide your customers with the best shopping experience, nothing stops them from comparing your prices to those on other sites. You should expect to lose a significant portion of your budget-savvy customers to these sites.
Pros of Drop Surfing
The primary positive side to drop surfing is the opportunity to change your profit margins per product by outsourcing the order to a different supplier to get the best price for each product. You are also not tied up to a particular set of products. Instead, you can and should change them as often as possible to get more sales and increase your profits.
It makes for a much more hands-on experience and gives you a faster turnover pace, making it better than dropshipping for some people. “Riding the wave” will undoubtedly skyrocket your sales, especially if you have a knack for marketing. If you have enough customers and market knowledge, you can even become the one setting the trends.
Cons of Drop Surfing
First off, drop surfing is a time-consuming effort, and you can’t really do it part-time. It requires constant research and always being on the hunt for cheaper and better products. Also, some aspects of this type of business are a bit difficult to automate. Also, the field of research constantly changes. If you want to maximize your profits, you’ll have to dedicate enough time to your drop surfing eCommerce business.
This means dedicating enough time to compare suppliers’ prices for each product manually, as that’s the only way to ensure you’ll have the highest profit margins. Keep in mind – suppliers tend to change their prices often, so you’ll have to do this repeatedly to achieve optimal results. As your business scales, this will require a much more substantial time investment.
It is also a considerable gamble as you’re not creating long-term relationships with either suppliers or customers. Since your offer constantly changes, you might have to start multiple drop surfing eCommerce websites to accommodate the new trends outside your niche.
Furthermore, once you start changing your selection to accommodate the newest trends, you’ll have to spend a considerable amount of time managing those changes and getting the best deals from your suppliers. It won’t leave you with much time to focus on your marketing efforts, so attracting new customers might prove to be a challenge.
Which Method is Better?
Since drop surfing is essentially a sub-class of dropshipping, it’s impossible to separate the two business models from each other. When setting up your dropshipping store and adding new products, you are effectively drop surfing. On the other hand, every drop surfing business follows the same order fulfillment model as dropshipping. Both require an eCommerce platform or website to operate. So, there is not exactly a lot of difference between the two to make one intrinsically better than the other.
The main difference lies in how much time you have available for your business. You can do drop shipping part-time, but full-on drop surfing requires your complete dedication, especially as your business grows.
With standard dropshipping, you can make a decent selection within a chosen niche. You can expect to eventually cultivate a loyal customer base that looks to you for the product(s) they need. You also have plenty of time for focusing on marketing efforts and further improving your customer experience by implementing credit card or crypto payments, for example.
Of course, you can always employ drop surfing software or hire someone to help you out with these parts of your business so that you can focus on finding the best deals or improving your customer support. It all comes down to profit margins – if your business grows enough, you can either expand your dropshipping model with people hired to do drop surfing for you or, alternatively, do that part yourself and leave customer support to someone else.
Which Business Model Should You Choose?
When deciding which of these two business models is better for you, think about the following questions:
How much time do I have to invest in this?
How much do I want to earn?
In this situation, one answer heavily influences the other. If you have enough time and are comfortable doing a lot of research and constantly hunting for a better deal, then one of the two drop surfing models is the perfect choice for you.
The ultimate model would undoubtedly be a combination of dropshipping and drop surfing. A careful selection of products and suppliers is a must. However, if you could get a better deal with another reputable provider, there’s no reason why you shouldn’t take it. The same goes for finding new products and niches. You should always watch for trending products that could work with your website and the current selection you have on it.
On the other hand, if you are getting into dropshipping as a part-time gig, then a more traditional dropshipping model will work better. After all, once everything is set up and done, you don’t have to spend too much time on stuff like finding new products to rotate on the site. If you have an excellent selection of products that bring decent revenue, you should have more than enough time to focus on scaling.
Whichever method you choose, keep in mind – a happy customer is a returning customer, and you need as many of those as possible to earn a living. Compromising your product quality, not answering inquires from worried customers, or providing poor-quality products for the sake of increasing your margins is never a good idea.