Seller’s Quick Guide to Dropshipping in the Philippines
Published: December 1, 2020 | Updated: December 3, 2020 | Posted by: Moneymax | Personal Finance
Gone are the days when starting a business means finding a location where you can set up shop or scout for multiple staff members who will man your store. Doing business in this age is possible even if you’re alone and doing it within the confines of your home. All you need are these: an online shop, a strong Internet connection, and a trusty supplier.
However, one thing that puts off budding online businesspeople is the product inventory. Ultimately, you will still need to source products from a supplier and find ample space where you can keep them.
You can actually solve such inventory problems when you’re dropshipping. This concept of business has been around for a long time, which proves its profitability. If you want to dip your toes into business, then dropshipping in the Philippines might be ideal for you.
Read on to learn the pros and cons and how to become a dropshipper in the Philippines.
Table of Contents
- What is Dropshipping Business?
- How Does Dropshipping in the Philippines Work?
- Advantages of Dropshipping
- Disadvantages of Dropshipping
- How to Start a Dropshipping Business in the Philippines
- Where Can I Get My Products?
- Dropshipping Philippines Tutorial
- Final Thoughts
What is Dropshipping Business?
Usually, online businesses always have products on hand to sell. But that is not the case when it comes to dropshipping. Dropshipping is an order fulfillment method meaning you work as the intermediary between your customer and your supplier of products.
How Does Dropshipping in the Philippines Work?
First, you set up your online shop and post your products there. Your customers will then place their orders at your shop. After you see your customers’ orders, you will then relay them to your supplier. Your supplier, on the other hand, accepts the orders and delivers the products to your customers’ address.
The business model seems pretty straightforward, to be honest. But don’t get excited yet. You need to understand that this trade comes with some pros and cons. Looking into these will help you fine-tune your decisions and minimize certain risks.
- 10 Steps to Starting an Online Business in the Philippines
- Online Business Ideas You Can Start Even with Small Capital
Advantages of Dropshipping
The number one advantage of dropshipping is that you eliminate the need for a complicated logistical system. You don’t need to rent a warehouse since you will not be developing and producing the products. And because your supplier will be delivering the products to your customers, you don’t need to bother about finding a shipping company.
Since you don’t have to build a logistics infrastructure, you don’t need to shell out a great deal of money. Costs associated with inventory, staffing, warehousing, security, and shipping will not be a big concern. You don’t need to have a product development team, which typically requires a lot of budget, since all your products will come from your supplier.
Streamlining cash flow and invoicing helps make your business operations efficient. All you need to think about is the linear flow of your customers’ money towards the supplier. As soon as the customers pay you, you will be able to pay the supplier and expedite the delivery.
Want to offer new products? You can do so without spending eating away at your budget. It can be as easy as finding a new supplier that offers the products your customers want or try the new product line of your existing supplier.
Disadvantages of Dropshipping
Entering the dropshipping business may be easy – it is so easy that others, even non-business owners, can do it! However, that means the competition can be high. When the market is saturated, finding customers can be a challenge. This is especially true when your competitors are selling the same products sourced from the same supplier. In order to stand out, you need to up your marketing game or find a niche where the competition is low.
Another problem you may encounter is the inability to have quality control procedures on your end. Because the products are shipped straight to the customer, you don’t have the chance to make sure that items are in great condition. Without quality control, your customers run the risk of receiving faulty products.
Wrong deliveries are also another quality control issue that you need to tackle. It’s important to understand that customers are very sensitive when it comes to this matter. If you don’t solve these dilemmas or you don’t have countermeasures in place, your reputation will be damaged. Your sales leads might not even convert.
How to Start a Dropshipping Business in the Philippines
Let’s say that you have understood the conditions and consequences of dropshipping and you want to go into it. The next thing that you need to do is to come up with a plan, which can be pretty simple.
First, decide which products you like to sell. With dropshipping, you can sell a wide range of goods, from bluetooth speakers to organic feeds and security cameras. If you have a specific interest or passion, such as collectible toys and action figures, you can easily integrate it into your dropshipping business.
Once you have decided what you will sell, pick an online platform. There are plenty to choose from, but you need to pick the one that suits your business size, budget, and types of product that you will sell. Here are some of the popular platforms for dropshipping in the Philippines:
Dropshippers in the Philippines:
- 8 Golden Rules for Starting a Small Business in the Philippines
- How to be a Shopee or Lazada Online Seller
Where Can I Get My Products?
The choices of dropshipping suppliers can be quite overwhelming. And since you’re just starting in this field, it would be wise to go for the tried and tested ones. It’s important to note that many dropshipping platforms also double as product suppliers.
Alibaba is usually at the top of the list of every dropshipper in the Philippines. This is because this company has almost everything – from smartphone cases to food and beverage machinery.
AliExpress, a company owned by Alibaba, also has a wide range of products that are affordable. It also provides free shipping services worldwide, making it one of the top suppliers for dropshipping in the Philippines.
If you want to target the local market, then look no further. Lazada, another Alibaba-owned company, makes a good choice, knowing that the mass market is very familiar with this platform.
In case you’re using Shopify, you can integrate Oberlo. Oberlo also has a comprehensive directory of products, which you can easily import for dropshipping in the Philippines.
Regardless of your supplier choice, doing your due diligence is a must. Signing up with these suppliers may also come with a fee. For instance, a pro plan with Oberlo may cost $80 per month.
Don’t forget the cut that the dropshipping company will get from your profits. Dropshipping in Lazada Philippines may mean that the online platform will get 1-4% commission from your sales.
Dropshipping Philippines Tutorial
Here’s a simple guide about dropshipping in the Philippines through Shopify and AliExpress:
Related article: How to Register Your Online Business and Pay Taxes to BIR
Starting a business can be nerve-racking, especially that it requires you to invest heavily in the set-up and operations. If you want to try your hand at it without spending a lot of money, dropshipping in the Philippines may be a good starting place. But before you do anything, always start your business plan with clear and specific goals. Make it a habit to list down your priorities.
-  Dropshipping Definition (Entrepreneur.com)
-  Make or Break: Seven Ways to Improve your Business Cash Flow (BBC.com)
-  5 Worst Side Effects of Bad Customer Service (and How To Avoid Them) (DiScipio, Impact, 2017)
With a goal to help Filipinos lead healthier financial lives, Moneymax regularly publishes tips and tricks on personal finance and lifestyle, among many other topics. For more finance-related news and articles, follow Moneymax on Linkedin.