When it comes to creating, establishing and launching an ecommerce business as a means to generate passive income and actually profit from the store, Enopoly is the leading automation choice for most. The company guides clients along what platforms might be best-suited for their goals, as well as what business model, either wholesale or dropshipping, might work best.
Two of the more popular platforms in which budding ecommerce sellers are utilizing are Amazon and Walmart. Both still utilize two business models in dropshipping and wholesaling. There are certainly benefits as well as negatives to using both. Enopoly CEO Vlad Varizhuk dishes on the ins-and-outs of the two platforms and business model practices.
“For new ecommerce store owners, dropshipping will probably sound like the better option, but there are both pros and cons to each of the business models,” mused Varizhuk. “Quite frankly, with dropshipping, you can make money and scale faster. At this point, you may be thinking that you do want to do the dropshipping model, but first a quick dive into each model.”
Wholesale
There is more upfront risk in utilizing this traditional business model, which requires more skill and can be time-consuming. This method typically requires storeowners to purchase inventory and basically sit on it.
“With wholesaling, you have to actually buy the products upfront,” Varizhuk stated. “This requires you to do the research on the items you want to sell and then buy the inventory to meet demands, which will typically be in bulk. You then will send your items to either Amazon or Walmart so that they can fulfill your orders.”
If you are not entirely sure you can move all the products, making up for the costs of products, services, etc., can be an uphill battle. If executed correctly, this model will always be welcomed across the platforms because of its ability to stay within policy guidelines.
“This method ultimately requires ecommerce store owners to put in 10 times the research as the products are going to be purchased upfront. With wholesale, it can sometimes take 2-3 times more effort to turn a profit and scale, than with dropshipping.”
Dropshipping
This business model is actually quite popular on both Amazon and Walmart, but is being phased out for two reasons. First, there is no quality control being practiced. The second, boxes are arriving with competitor logos on them. Many stores are still using these methods, along both platforms, however, they are beginning to go away from this practice.
“This model requires you to find suppliers and items you want to sell, take your pictures, write descriptions and upload them to your Amazon or Walmart store dashboards,” said Varizhuk. “From there, when a customer makes a purchase, you will get a notification and then you can go and reach out to the supplier who will ultimately ship the item directly to the customer.”
“Dropshipping requires no inventory purchases upfront and that certainly presents less risk when it comes to your inventory, because you can upload hundreds of products each day and the ones that don’t sell, it doesn’t matter as you didn’t put any money into them already. The ones that do sell, obviously make you money at the end of the day.”
“Many people are guilty of breaking policies when it comes to how shoppers receive their products. If the items arrive at their home and it isn’t branded with the Amazon or Walmart logos, or just simply in a blank box, it violates both platforms in regards to procedure. When dropshipping, boxes can be branded with individual store and company logos. If you are caught by the platforms, they will suspend your account and hold your funds. Trying to come back from that is usually quite difficult. They can be locked up for sometimes up to many months.”
Moral of the story, if one wants to continue using the dropshipping business model, they are encouraged to sell on platforms like Facebook or Shopify. Both Amazon and Walmart are regularly attempting to go away from this model. When you wholesale, you are abiding by all the regulations and procedures by the latter two while ultimately playing it safer.
About Enopoly
Enopoly was founded by CEO Vlad Varizhuk. The company prides itself on serving as the e-commerce industry automation leader, while doing the ‘heavy lifting’ for its clients. Enopoly grants clients the opportunity to invest in an automated e-commerce business of their own, while its employees have a collective decades of experience and millions in sales. For more information, please visit https://www.enopolyautomation.com/
