Don’t Get Confused Between Dropshipping and Marketplace

February 01, 2022 4 min read

Dropshipping Sites for Sale and their relevance with the marketplace are not new for the people associated with e-commerce or owning dropshipping stores for sale. These terms are often used interchangeably without concerning a fine difference between both of these models. It's quite important to clear the confusion and delineate the exact meanings, purposes, and mode of action of both models. Before you build a Dropshipping Store or Buy Premade Dropshipping Stores for Sale, get to know what your mode of action, responsibilities, and stakes would be. 

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Dropshipping versus Marketplace

The fundamental concept to understand is that every retailer, wholesaler, or manufacturer requires a marketplace irrespective of its model being dropshipping or not. Simplifying the concept. Sellers with the Dropshipping Stores for Sale sell products through their website and take orders from the customers which are shipped or delivered by the manufacturer or wholesaler at the doorstep of the customers but on the behalf of the seller owning the dropshipping store for sale. This means that products and the responsibility to deliver to the customers belong to the wholesalers or the manufacturers but it will contain the contact information and logo of the seller accompanied with the whole branding, marketing, and return shipping labels. In short, buyers get their ordered products from the sellers of the dropshipping website for sale from whom they ordered without knowing the behind-the-scenes path of delivery.        

On the other hand, a marketplace involves the sellers and the manufacturers or wholesalers, or retailers as a separate entity. The seller exhibits numerous products on his website that belong to and labels to the manufacturers or wholesalers of the products. Sellers just showcase products, take orders from the customers, and pass them onto the wholesalers or the manufacturers who deliver the products to the buyers with their identity, logo, and labels. In other words, you can say that that seller at the online marketplace offers his platform to the numerous interested vendors, manufacturers, wholesalers, retailers, or small businesses to utilize his platform to exhibit their products to large audiences, to sell them, and gain profit. Of course, it also benefits the seller. Unlike the seller of the dropping sites for sale, it allows those third-party sellers to sell products with their branding.  Similarly, the buyers are also aware of the fact that the products they are purchasing from certain websites will be delivered by third-party sellers. Examples of such marketplaces include Amazon, Alibaba, eBay, and many others.

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Purchasing and Point-of-sale Experience

For Dropshipping Sites for Sale, retailers possess authority for choosing, curating, and controlling the products from third-party sellers whereas that is not the case with the marketplace. However, they have the authority to set the cost to the buyers while with dropshipping, retailers manage the costs of the products. Regarding fulfillment, both the models have no control over it. The retailers have no authority to propose branded packaging. Moreover, the shipping method and the time required to deliver to the customer is proposed by the sellers in the case of the marketplace whereas, for dropshipping, retailers are the ones to propose the shipping protocol to the suppliers.

Regarding customer services, both the models direct the buyers to get a return authorized. However, the buyers are allowed to directly approach the seller, in case of purchasing from a marketplace whereas dropshipping websites for sales direct the buyers to contact the retailer first. The trailer is supposed to channelize the suppliers to coordinate and answer the queries of the buyers and to give them relief from the objections.

Moreover, the business model of both the online marketplace and the dropshipping sites for sale are quite different from each other. Dropshippers collect money from the buyers and remits the vendor the wholesale amount plus the fulfillment cost, preferably already decided and committed. On the other hand, the marketplace’s mode of transaction involves the money transfer and the deduction of a set percentage or amount followed by the transfer of the rest of the money to the seller.  

 In a Nutshell,

The sellers of the dropshipping stores for sales never give disclosure to the buyers where the products are located and who the actual manufacturers or the retailers of the products are. The buyers can view the products, descriptions, specification details but nothing beyond that to whom this product belongs. Previously it was referred to as blind dropshipping owing to the unfamiliarity of the buyers with these details. All they are in contact with are the owner of the dropshipping site for sale.

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On the contrary, sellers with the marketplace are open to sharing the details of the manufacturers or wholesalers. They exhibit proper disclosure, where the particular product belongs, and from whom it will be delivered. Moreover, they ensure transparency with proper checks and balances to ensure the credibility and reliability of the third-party sellers by allowing buyers to leave comments about their purchasing experience in terms of ratings and honest reviews. It assists other buyers as well to know the credence of the seller from whom they are gonna purchase that ultimately results in a better experience and reputation of the marketplace itself. It in turn encourages other sellers, retails, wholesalers, or small businesses to utilize their platform to grow their business.

Based on the above analysis, in the previous blog, we guide you a little bit to explore the marketplaces to do exhaustive research and comprehensive analysis amongst numerous online marketplaces by analyzing the review, comments, and rating of the sellers given by the buyers based on their purchase experience. After all, it all reflects on the credibility and reputation of the marketplace establishing it as a profitable and trendy platform to grow the business and generate more revenues. For some buyers, it makes marketplaces more worth it as compared to the dropshipping websites for sales. However, opinion varies greatly.

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