Which Dropshipping is More Profitable?

Introduction

As an e-commerce seller, you should be happy with increasing sales and customer loyalty. But managing products, storing them and shipping them feels like a headache.

If that’s so, you have a better option here— dropshipping. No inventory storage headache and no need to store the products. All you have to do is rely on the suppliers and let them fulfill your orders.

But there are few dropshipping models, branded or traditional. Do you want to know which one of the 1688 dropshipping models is the best? Today we will discuss various aspects of dropshipping and how you can grow your business with the right dropshipping strategy.

Understanding the Main Dropshipping Models

There are three different dropshipping models. Some might work for smaller business owners, while others are perfect for private-label dropshipping opportunities.

Let’s scroll through different dropshipping options.

Traditional Dropshipping

It’s the most straightforward and easiest way to drop ship products. Sellers have to visit the stores on AliExpress or 1688 and check the products. Please list all the products with the highest sales volume and sell them.

Once an order comes, it depends on the supplier to ship that item. Ultimately it’s the supplier who is responsible, not the dropshipper.

Pros

● Low startup costs. No need to buy stock upfront. You can start with $100.

● Wide product selection. Since 1688 and AliExpress are huge platforms, you have access to thousands of products without storage.

● Quick to start. No delays, you can launch a store within days and start selling.

Cons

● Limited branding control. If you want to win customer loyalty, it’s not possible, as most products usually arrive in generic packaging.

● Variable shipping times. If you are Taobao dropshipping, the products might take weeks to arrive, depending on suppliers. It’s a headache for your buyers. For example, you contact the suppliers and get the premium packaging for your products. Also, fetch the quality products with quality control to improve your brand presence. So you have a lot of control over the branding in this dropshipping model.

Pros

● Higher perceived value. Branded products offer a quality experience and premium boxes. You can charge higher prices and stay in profit.

● Customer loyalty. You own a brand and engage consumers. So consistent branding encourages repeat purchases and makes consumers print your brand name in their hearts.

● Less competition. Branded products always have few competitors. So it’s harder for others to copy your product presentation. 

Cons

● Higher upfront investment. Branding requires setup costs, such as custom packaging and designs. Start only if you are ready to invest in this private label dropshipping model.

● Longer setup time. Creating brand elements and working with suppliers takes careful strategy and success plans. 

Print-on-Demand & Niche Dropshipping

One of the most profitable and engaging dropshipping models is the print-on-demand and niche dropshipping. Instead of selling pre-made products, you can allow consumers to buy customized products.

Once you receive an order, please send all the requirements to the suppliers and let them customize the printings and labels accordingly. It also drives a lot of sales due to the customization touch. 

Key Profitability Factors

Before you prefer a Taobao dropshipping business, always know the profitability factors. Understand whether you can be successful. Try harder to fetch the profitable deals only.

We have added a few factors that affect the profit margins and might dump your business without careful planning. 

Product Sourcing Costs

Product sourcing is the most important. You can’t succeed without selling quality.

So, sourcing stands out as the number one reason for a dropshipping business. There are two options.

● Source yourself if you have experience.

● Contact third-party sourcing services like Buckydrop.

Buckydrop finds the Chinese suppliers and enables Taobao dropshipping. You explore products and quality suppliers. The sourced prices are cheaper so you can make more money.

Shipping & Fulfillment Efficiency

Shipping and fulfillment matters a lot. If you are late with shipping, consumers will choose the competitors. So you have to manage the products and send them on time.

Working with random Taobao dropshipping suppliers risks the supply chain and might delay the product delivery.

But experts like Buckydrop have warehouses near your consumers. Global reach and timely shipping allows you to meet consumers’ needs and ship products on time. It guarantees customer satisfaction and boosts customer loyalty.

Branding & Customer Perception

Branded dropshipping is important. Do you know why? Because it creates a monopoly and increases the customer perception of products.

Here are a few reasons why branding increases product value.

● Products look premium like buying from Nike, Chanel or Dior.

● A few competitors are creating a monopoly in the market and price increases.

● Branding increases the demand for products and leads to higher profit margins.

Buckydrop can help with branding. For example, it offers the following features.

● Customized packaging and labeling. Quality packages with your brand logos give a premium unboxing experience to the consumers.

● Branded fulfillment. We take care of your products and ship them on time with high-density packages. So brand new, undamaged parcels will highlight your brand reputation.

Automation & Order Management

Manual order forwarding, tracking updates and inventory checks are time consuming and prone to mistakes. Automation has many benefits.

● Product synchronization and shipping occurs whenever you receive an order.

● Forward tracking of the products reduces the stress.

● Automated management reduces manual fatigue and works tirelessly to manage your products and win customer confidence for your branded dropshipping.

Buckydrop can also help with branded dropshipping through proper automation and a success strategy as follows.

● Integrate your Shopify or WooCommerce sales channels with Buckydrop and let the automated orders be fulfilled.* Timely shipping and branded packages go through smart warehouses, so more accurate and efficient.

Margin Comparison

Three dropshipping models with different margins. Based on your choice, you can select a different dropshipping model. Usually, niche and branded dropshipping models have the highest profits margins. 

Traditional dropshipping has the lowest profit, while POD has the highest. If you want to elevate the product profits, Buckydrop can help you out.

For example, Buckydrop can help with:

● In traditional dropshipping, faster and cheaper shipping can bump margins from 10% to 15–18%.

● In branded dropshipping, custom packaging can justify a 10–15% higher selling price.

● In niche/POD dropshipping, sourcing efficiency can reduce production costs without hurting quality. 

Choosing the Right Model for Your Business

The right dropshipping model depends on several factors. We have listed the factors and given examples to help you choose the right model.

Budget

What is your budget? It helps decide the types of dropshipping model to choose. For a low to high budget, you can play between the right options.

Each dropshipping model has different budget requirements. For a low budget you can’t start with branded dropshipping. Similarly there are few other options here.

● Low Budget (Under $500) is good for traditional dropshipping to test products without significant investment.

● Moderate Budget ($500–$2,000) can test niche dropshipping with limited branding to stand out early.

● Higher Budget ($2,000+) is good to launch directly into branded dropshipping with professional packaging and marketing.

Focus

How do you plan? What do you plan to do? If you have a long term focus, always win customer loyalty.

Let’s take a few examples here.

● Short-Term Sales Focus means you should go for traditional dropshipping. It’s best for quick market entry and product testing.

● Long-Term Brand Building always goes for branded dropshipping. The purpose is to create a recognizable identity and repeat customers.

● Community/Niche Focus: POD or niche dropshipping connects deeply with specific audiences.

Operational Capacity

If you have a team it’s good for a larger setup and can handle all the tasks efficiently. If you go for a brand and build it, a large team can make your dream come true. A larger setup can also open doors to the better sales and improve your business deals.

Smaller operational capacity is for other purposes. Let’s take a look at the goal.

● Solo Operators should start with traditional or POD. Both run efficiently with automation.

● Small Team is good for branded dropshipping and makes it more manageable with few people handling marketing and customer service.

● Scalable Setup helps larger operations to manage mixed models. For example you can start branded flagship products with niche add-ons.

Conclusion

Every 1688 dropshipping model has pros and cons. All you have to do is focus on the right one. We have given a few tips to help you choose the right one.

● Traditional dropshipping— speed and low startup costs but lower margins.

● Branded dropshipping— more investment but allows higher prices and repeat customers.

● Niche/POD dropshipping— unique and emotional appeal often commands premium pricing.

Want to simplify your dropshipping? Buckydrop is your one stop partner. We source products and ship to customers for you. With higher margins you can open more doors and save more. Contact us now!