In rapid growth in world of ecommerce, entrepreneurs are constantly experiencing new entrepreneurs models to maximize their profits and minimize overheads. Two popular strategies that have gained significant are Ghost commerce and drop shipping. While both modulus offer unique advantages. In this blog post, we will drive into Ghost commerce and drop shipping compering their key aspects to help you decide which module might be the best for you.
What is Ghost Commerce?
This is new concept in e-commerce landscape. It involves running an online store without holding any physical inventory or being directly involved in shipping process. Ghost commerce utilize third party services to handle inventory order fulfilment and shipping. This model allows entrepreneurs to focus on marketing, customer services, and growing their brand without any issue of managing physical products.
This methodology is related to similar kinds of selling as dropshipping, influencer marketing, and affiliate marketing. One of the huge advantages of this particular model is that businesses are able to offer and display a seemingly unlimited amount of products with out having to have a physical storefront or actually stock the product.
Simply having a website or online store, quality content, and a presence on social media platforms is sufficient to get started.
Ghost commerce is particularly favored by business owners aiming to promote their products due to its cost-effectiveness. They are not required to pay to display the advertisement on your page; instead, they only pay when a sale is made. As for customers, ghost commerce users facilitate their search for desired products and services.
Key features of Ghost Commerce:
1. No Inventory Management
Ghost Commerce is one such industry where you do not hold any physical inventory. They partner with third party fulfillment centers that store and ship products on their behalf.
2. Automation Tools
Most Ghost Commerce operations are automated, using specific tools to manage orders, inventory status, and communication with customers.
3. Scalability
Third-party fulfillment services allow the Ghost Commerce stores to expand quickly as the limitation of storage space does not exist.
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What is Dropshipping?
Dropshipping is a well established ecommerce model where the retailer does not keep goods in stock. Instead, when a customer place an order the retailer purchases the item from a third party. Dropshipping eliminates the need for a significant upfront investment in inventory, making it an alternative option for new entrepreneurs.
Key features of Dropshipping
1. Low startup cost
As there is no need to purchase inventory cost such as no warehouses, inventory or research costs, dropshipping allows lower initial investment compared to traditional retail modules
2. Broad Product Range
As there is no inventory, so their will be offering a wide range of / variety of product dropshipping, user can get product without any limitations. As it uses third party supplier who ships it directly to the customer.
3. Flexibility
Dropshipping businesses can be run from anywhere with an internet connection, offering great flexibility for entrepreneurs
Comparing Ghost Commerce and Dropshipping
1. Inventory Management
- Ghost Commerce: There are defined no-stocking businesses where the businesses’ owners do not keep any inventory. Outsourcing of every inventory is with third party fulfillment centers.
- Dropshipping: Actually, inventory is under the control of suppliers or manufacturers. The retailer does not consume or keep articles on the shelves for people to come and buy.
2. Fulfillment Process
- Ghost Commerce: The fulfillment centers involve themselves with the entire process of shipping beginning with storage and moving to packing and shipping of orders.
- Dropshipping: The supplier is thus supposed to ensure that the products are delivered directly to the customer upon an order being made.
3. Automation and Technology
- Ghost Commerce: Usually, these refer to higher automation solutions to control the processing, orders, and stock.
- Dropshipping: It must be noted however that Storage Shop does use automation but not in as integral manner as does Ghost Commerce.
4. Control Over Branding
- Ghost Commerce: Provides more branding and customer experience control since a business person can select specific niche fulfillment centers.
- Dropshipping: Since the products originate from a supplier, specific branding control is significantly restricted owing to the fact the supplier may not indeed allow for customization.
5. Risk and Investment
- Ghost Commerce: Typically costs more initially from the use of third party fulfillment centers as well as the automatic equipment.
- Dropshipping: Require less funds to finance and hence less costly for the new generation of business people to venture into.
6. Profit Margins
- Ghost Commerce: Higher profit margins resulting from the improved manageability of the price and the costs associated with meeting the customer’s demands.
- Dropshipping: Generally, lower profit margins since the supplier will cut a portion of the price at which they want to sell.
Which Model is Right for You?
Whether to go with Ghost Commerce or Dropshipping simply depends on what you want to achieve in business, how equipped you are, or the kind of capital you have. If you are in a desperate search of a perfectly automated and easily scalable business model with slightly more control over branding then Ghost Commerce might suit you well. On the other hand, if you are a beginner and you hope to start up an e-commerce store with a small amount of money which you do not want to risk much of, then Dropshipping is a good way to start.
Conclusion
Each of the two business models has its own strengths and weaknesses regarding Ghost Commerce and Dropshipping. Comparing these two models, you will be able to determine which one is right for your business needed goals. If you have chosen the Ghost Commerce model or the Dropshipping model, the main strategy is to use the advantages of the selected model to meet the customer’s expectations and desires.
At WebbyCrown, we provide comprehensive services for your e-commerce website whether it follows a particular model of operation or not. Connect with us today to find out how this can be made to work for your e-commerce business and take your business to the next level.