Blog - We consider profit and understand the risks

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A significant part of retail sales in the world are dropshipping and e-commerce. By 2027, dropshipping will become an industry with a turnover of $591.77 billion.
Once you have chosen the dropshipping business model, draw up an initial business plan, calculate the profits, and assess the possible risks. If you already have a business site, online store, or other promotion channels, you should audit them.

Daehan Trading

will ensure that the product reaches the mass market.
All this is necessary in order for the site, which is the main tool for promoting your business, to work and make a profit. To do this, it does not just need to be made beautiful, it must be convenient and functional. And its content (texts, photos, videos) should influence the decision of the target audience, motivate them to make a purchase, through advertising, discounts and promotions, and create a need for this product among potential customers.

Start with a "client portrait"
The visual range and how the item is presented on the site is critical to your business. In the modern world, not only the text that "sells" your product and helps find your site is important, but also a beautiful photo and a "selling" picture.
You should study your client, learn his age, gender, interests, location, education. Understand which social networks, sites and channels your potential buyer visits. Learn as much as possible about his habits and preferences. Of course, collecting all this information and correctly analyzing it is a difficult task. If you have difficulties, contact Daehan Trading Co. Ltd, their experience and proven market research techniques will help your business, you will receive advice on e-commerce issues. Marketers Daehan Trading Co. Ltd will analyze your site, evaluate its traffic (organic, direct, advertising, social networks), offer additional channels of attraction.
The profit of your online store will primarily be influenced by three factors - these are product margin, site attendance (traffic) and conversion rate (percentage of visitors who made a purchase).

The profit margin from dropshipping is on average 15-20% of the sales price of each product, and the average conversion rate of the e-commerce site is about 2%.
You can preliminary estimate the income from the business model of dropshipping by the formula:
Profit = (Traffic x 0.02) x (Average Order Value x 0.2)

At the same time, it must be remembered that: the discount of the dropshipper when buying from manufacturers and wholesalers can be less than 20%; this is not the final profit and it is necessary to take into account the costs of maintaining the site and marketing; to remain competitive, you often have to cut profit numbers.
Dropshipper can increase profits, for this he will need to look for goods with a higher margin. Thanks to effective marketing activities, you can increase the traffic of the site, make it convenient for quick checkout and payment for purchases.

Know In Person
In dropshipping, as in any business, it is important to constantly track and study competitors. Study their methods of work, learn how they work with partners, buyers, intermediaries; see how often they make changes to their online stores, see how they advertise the product, find out what discounts and promotions offer. Take the best from competitors and add yours! Make your suggestions different in terms of content and visual range. Find out how to highlight your site so it cannot be confused with anyone.
If you are not sure of the purity and profitability of the transaction and you do not have the opportunity to collect the necessary information about competitors and suppliers - marketers and analysts of Daehan Trading Co. Ltd will help you.
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