So.
Hey, everyone.
My name is Navdeep.
And in this video, we're going to talk about all the different types of logistic business model.
So in logistic, we have three different types of business model.
The number one is your DROPSHIPPING business model.
And this kind of business model is used by many freelancer or many individual creator who are simply
selling the product in a different country.
Now, in majority of the Dropshipping business model, people have their supplier or fulfillment in
China and they are selling all of these products in United States or in UK.
And that's your Dropshipping business model.
The second type of logistic business model is third party logistic business.
So let's say if you are a manufacturer or a small business owner, in that case you need someone who
can handle your complete logistic and supply chain.
And that's why you have these third party logistic company or third party logistic aggregator who can
manage your supply chain and distribution.
The third type of business model in the logistic business is your last mile delivery business.
So if you look at all your Foodtech platform or let's say all the startup who are shipping the product
within a city from one location to a different location, these are last mile delivery business.
Let's start with Dropshipping business model.
Now, this is used by a lot of freelancer who wanted to generate some side income and that's why they
are doing side hustle using Dropshipping business model.
And the idea is super simple, so you don't really have to worry about the quality of the product.
You don't really have to maintain the inventory and you don't really have to worry about the headache
of logistics shipment and reverse fulfillment.
You just have to maintain your website and you will list these product.
And if a customer purchase these product, then you will transfer both of these details like the shipment
detail and the customer detail to a supplier, and they will supply these product.
So if I talk about the three important parties that are there in a Dropshipping business model, you
have a retailer and you are the retailer in a dropshipping business.
So your responsibility is to make sure that you have a good product portfolio.
Then you have your full filter who is shipping the product on your behalf directly to the customer.
So this supplier, all the fulfillment is there in China and they are having this product in bulk quantity
and they are managing your shipping, logistics and fulfillment by themself and you are giving them
a small cut out of the complete transaction.
And then you have your customer who is purchasing the product.
So let's say as an online retailer you are selling a sofa for a cat or a dog online, so you have to
find a full filler or a supplier for these product who can ship these product on your behalf directly
to the customer with the help of a logistic company.
And that's your Dropshipping business model.
Now, in Dropshipping business, you have 13 advantage.
And few drawbacks as well.
Let's talk about the advantage of using a Dropshipping business model.
And again, this is widely used by a lot of freelancer who are doing side hustle.
The first advantage of using a Dropshipping business is that you need a very less capital.
Now, in Dropshipping business, you don't really have to maintain any of this inventory because it's
the full fillers or the seller's responsibility to make sure that they always have this inventory in
their warehouse.
So you just need to create your own ecommerce store using Shopify or WooCommerce, and you need to drive
traffic on that e-commerce store so that people can purchase it and that's your job.
The second advantage of Dropshipping is that you can easily start this business.
So you can easily start your ecommerce store with $30 a month and then you can integrate these other
tools like email marketing, product recommendation.
So within $100, your ecommerce store or a digital store will be up and running.
The third advantage of Dropshipping is that you have low overhead because in a Dropshipping business
your only job is to make sure that your online website is up and running.
You don't really have to hire a lot more people to manage your inventory or to manage your warehouse.
You can do this dropshipping business all by yourself.
The fourth advantage of Dropshipping is that you can do it from anywhere you want.
You can be in India, Vietnam, Australia or in any African country, and you can start your Dropshipping
store.
You can sell these product in US or UK.
And I'll tell you exactly how will you sell these product to different people?
And you can have a full filler or a supplier from China.
So you can start this ecommerce store or a dropshipping store from anywhere you want and you can easily
test out these different product.
So normally people start by testing out one product.
Let's see if you know a lot more about dogs or cat.
In that case, you can start with dogs of our cats so far.
But you can always research more about it, and we'll talk about that in a while.
Let's talk about a few problems that are there with Dropshipping.
Now, the first problem that a lot of people have started facing with Dropshipping is that the competition
is increasing because a lot more people have started selling these product online with the Dropshipping
business.
And that's why the margins are very less.
So if you are advertising a lot, then less people will convert and that's why your customer acquisition
cost will be very high when compared with the margin.
The second problem with the Dropshipping is that you will have a higher shipping complexities and time.
Now, majority of the Dropshipping product comes from China, and if a product is directly coming from
China to a different country, then it will take at least 10 to 15 business days for that product to
reach to your customer.
Now, I'm giving you a very high level overview of Dropshipping business.
If you wanted to start this business, I always recommend you to dig deep into this and do your own
research.
So let's say if you're interested about selling the product related to your dog or your cat, or let's
say if you are a pet owner, in that case you have a higher probability that you can figure out different
ways to sell these product online.
So you can pick your niche based on the kind of core competency you have.
Second thing you need to keep in mind that your product selection should appeal to the impulse buyer.
So you would be only selling all those product that people wanted to instantly explore if they see the
photo of that product.
In short, they are solving the burning pain point of your customer.
Now I'll show you all those different types of product in a while, and I'll also tell you how exactly
can you research about those product?
Another thing you need to keep in mind while you're picking your niche is that you have to sell unique
product that are currently not on Amazon.
So if you go to Alibaba.com and if you search for the unique product that are being purchased by people
in China or in Japan that are not there in the US or UK right now, in that case, you can pick all
of those products.
So in order to pick a niche, you have to keep all these four things in mind so that you can create
a strong brand in the long run.
Then the second thing you need to do in a dropshipping business is that you have to perform a competition
research.
So you have to look at your competition, what kind of product they are selling, what's their value
proposition.
Now once you have picked your niche and you also have performed the competition research, now you have
to create your own Dropshipping store or a website using Shopify.
So you can use platforms like Shopify or GoDaddy to pick your domain name, and then you can quickly
integrate that domain name with Shopify.
And that's how you can establish your online presence by creating a website or a digital store.
Then you can source all of these products on your website using a plugin called Aweber, Lu and AliExpress,
and then you can sell all of these product globally on your eCommerce platform.
Now let's understand the most important part of this video.
How exactly will you sell these product online to different people?
So let's say you are picking a product, a dog or a cat so far online.
In that case you have to go to Instagram and you have to find all the pages where people are posting
dog and cat videos online.
So you have to ask them that.
If I promote my product on your Instagram page, using your story where you simply have to put up a
video and you have to give a swipe up link of my Dropshipping store, how much charge will you take?
And let's say the admin of that Instagram or a Facebook page will say that I'm going to charge you hundred
dollars and I'll put up your promotional story on my Instagram page and then people can swipe up and
they can buy the product because I have, let's say, 500000 to 1 million followers.
So in that case, you will simply send a video of your product and they will put that video into their
Instagram story and then people will swipe up.
And if they find that product interesting, they can buy that product.
So you are paying, let's say, $100 to that specific person and let's say you are getting a sale of
$1,000.
And let's say if your contribution margin is 20%, in that case, you can generate a profit of $200.
So you can see that with $100 of promotional offer, you are generating $200 of profit.
But again, in Dropshipping business model, you have to make sure that your video and the product is
attractive enough and they are having an impulse buying behavior so that people can quickly buy those
products from your Dropshipping store.
And you can also generate a decent amount of profit so that you can justify your cost that you are paying
to this admin of an Instagram page or a Facebook page.
And and you can look at all of these different products from Alibaba and you can source these product
using all blue on your Shopify or WooCommerce store.
And that's all about your Dropshipping business model.
In the next video, let's talk about third party logistic business.