Best Dropshipping Software & Tools

Dropshipping Software Definition: What is Dropshipping, what is Dropshipping Software, and why is it needed?

E-commerce is increasingly penetrating more and more product areas today. In addition, selling through online stores using sophisticated shop systems is becoming more practical and efficient. In contrast to traditional retail sales on site, companies do not have to pay store rent, need significantly fewer employees on average, and can usually offer many more products. Nonetheless, selling on the Internet is not self-sufficient. In particular, the logistics behind the shop operation represents a major challenge for many e-commerce managers. An online store can usually handle thousands, tens of thousands, or even hundreds of thousands of products. However, many places have a problem creating the corresponding storage capacities and shipping resources. A lot of investment is often required here, which ultimately detracts from the profit and often makes the hurdle of getting into e-commerce in the first place very high. Dropshipping (in German "Direct Shipping" or "Long-distance business") can effectively remedy this logistical problem and make the entire online sale even more efficient! As part of dropshipping, online merchants have the opportunity to offer products that they do not store themselves. They basically take on the role of middlemen between provider companies and customers. They sell and promote dropshipping goods, but dedicated suppliers handle the logistics - from storage to shipping and possible returns. Dropshipping software, in turn, forms a technical interface between e-commerce managers and their providing companies or logistics partners. Dropshipping tools specifically take on central organizational tasks between these parties and their systems, ensuring smooth sales processes. Ideally, customers will not notice any difference between purchasing from a dropshipper and a traditional online business.

How does Dropshipping Software work?

In dropshipping, the online traders are practically skipped in the supply chain when a product or several products are sold. This means in detail that the respective online shop operators do not handle delivery and even storage of the offered goods themselves. The process is as follows (simplified here):

1. E-commerce managers first select suppliers who offer goods that are interesting for their target group. Even with this basic step, good dropshipping software supports its users. They usually offer ready-made interfaces to various suppliers, via which e-commerce managers can integrate their products into their shop system again via an interface.

2. Individual products from the stocks of provider companies are then to be offered in the own store at an individual price and/or - depending on the interfaces - also on external marketplaces, such as Amazon, eBay or AliExpress. In fact, many solutions come with marketplace connections. eBay and Amazon dropshipping software is then the norm because they are undoubtedly the largest and most promising marketplaces. AliExpress dropshipping software is also increasingly in demand internationally.

3. Only when a customer buys a product in a dropshipping online store or on a connected marketplace, the good is ordered from the delivering company, which then sends it directly to the buyer. Depending on the equipment, dropshipping software can - besides its function as a technical interface between traders, suppliers, online store, marketplaces, and customers - take on a variety of other tasks. These range from order management and inventory tracking to support features to automatable workflows and marketing tools.

What are the advantages and disadvantages of Dropshipping Software?

Dropshipping software is ideal for companies or startups with few resources to set up e-commerce businesses. A small operation can easily set up an online business with the help of a dropshipping tool. The dropshipping model means no effort in goods logistics for e-commerce managers. The supply chains are greatly reduced. In turn, dropshipping software makes it particularly easy for users to select suitable suppliers, add products to an existing e-commerce shop, and perform central to-dos related to direct sales. It takes over the majority of logistics once an order has been placed. At best, operators of dropshipping shops get software that takes off their hands and hence have more time to take care of important processes that are not or at least significantly less supported by digital helpers, such as personal customer service and strategic considerations. This leads to more efficiency on different levels and can massively boost sales - among other things through very smooth software-driven sales processes and more time for better support. In addition, the following advantages exist, all of which contribute to a possible plus in efficiency.

• Scalability: A major advantage of long-distance business is that an infrastructure is already in place that traders can use as needed. This makes scaling easier, as the supply chain does not have to be built by yourself.
• Low overhead: With long-distance business, the costs required to establish an e-commerce company are significantly reduced. Although the profit margins are also lower than with traditional online trading, the quite clear overhead costs usually make establishment worthwhile.
• Quick Setup: In addition to low overhead, dropshipping software enables articles to be sold incredibly fast in an e-commerce store. If you use eBay dropshipping software or Amazon dropshipping software, you don't even have to create your own online sales platform. Many softwares for dropshipping can be integrated into e-commerce platforms and used with a few clicks. The respective dropshipping tool can handle the entire order processing in the backend and work directly with the supplier. Users do not have to do much more than choose the optimal basic settings and suitable products for their e-commerce.

Do dropshipping tools have any disadvantages at all with all these clear advantages? Quite - as with practically any software, specific limitations or problems can occur. In the case of dropshipping solutions, the following factors should always be considered.

• Low profit margins: One of the main disadvantages of long-distance business is that the profit margins are much lower than when logistics are self-organized. The latter approach makes building supply chains relatively expensive upfront. Still, you don't have to pay extra for a supplier's existing infrastructure or its use. The potential profit per sale in dropshipping is quite low due to the associated fees.
• Little Control: Using a dropshipping program means e-commerce managers have little or no control over the availability of their stocks, their quality, or the shipping speed. All of this is in the hands of the respective dropshipping partner companies. Therefore, it is essential for online shop operators to check the offered dropshipping products for their quality and also to closely examine the shipping conditions of potential direct shippers.
• Communication Problems: In dropshipping, e-commerce managers work directly on customers. Therefore, they also act as intermediaries to suppliers in specific contexts. For example, if there is a problem affecting individual orders, provider companies should inform their online traders about it so that they, in turn, can notify end customers. This doesn't always happen reliably and promptly, which can lead to annoyed customers.

How do you choose the right dropshipping software or what should you pay particular attention to?

The market now offers a variety of dropshipping solutions. Some of them cater to specific areas of this commerce variant and offer, for example, primarily tools for inventory, order, and purchasing management. Others are designed as comprehensive suites. With correspondingly well-equipped dropshipping shop software, the possibility of creating an online store and much of what is needed for its functional operation is often provided. The key to understanding which platform is right for your own company lies initially in answering the following questions:

• On which e-commerce platform and on which marketplaces should sales be made?
• Where are products and suppliers to be sourced from - certain industries, national, international, etc.?
• Is an all-in-one tool for omnichannel management including shop design wanted, or rather a more or less simple integration?
• What is the budget for the solution?
• Are there already expansion plans that the dropshipping software must be able to keep up with?

With appropriate answers, interested parties already have a precise overview of what their future dropshipping application must deliver. A closer look at individual functions provides more precise insights. The following features should always be considered when researching.

• Product search and import: With the product search, e-commerce managers can select and import the products they want to sell from popular dropshipper companies. More advanced tools include product research features for identifying particularly profitable goods.
• Product Ratings: To help users make informed decisions about what products to include in their store, some dropshipping platforms include customer product reviews. Reviews from other traders may also be found.
• Listing Management: Dropshipping software often includes special tools for managing product lists. This enables e-commerce managers to easily download, edit, and publish product lists - ideally in large quantities.
• Order and order processing automation: Automation of orders and their fulfillment automatically passes these from the sales channels to the suppliers, who then process or execute them. If multiple suppliers are planned to work with, you should look for a tool that lets you prioritize suppliers at the product level.
• Inventory Automation: Inventory automation synchronizes product data directly from suppliers, including inventory, SKU, and price information.
• Price Automation: Using price automation, e-commerce managers can create pricing rules to automatically determine and change product procurement costs. It is often beneficial to rely on a tool that allows maximum and minimum prices to be determined and can synchronously update prices on all marketplaces.
• Shipment Tracking: Shipment tracking automatically updates shipping and tracking data from suppliers and also passes this on to end customers.
• Analytics and Reporting: Finally, analytics and reporting features allow e-commerce managers to monitor their performance and revenue. This, in turn, provides insights for optimizations and entirely new strategies.
• Marketing Tools: Some dropshipping software has onboard marketing tools that help e-commerce managers promote their business or the offered products. This can, for example, be in the form of targeted e-mails or social media posts.

What do Dropshipping Softwares cost?

If you're looking for a suitable dropshipping software, you'll find quite a few free applications. However, these usually only offer basic features, with which very few e-commerce managers can work effectively. Especially beginners are often well advised to choose a preferably holistic solution to keep software breaks or necessary connections with other systems, which can of course always lead to certain difficulties, down to a minimum. Dropshipping tools are usually provided in subscription models. Businesses here pay monthly or yearly and sometimes per user. To effectively support dropshipping processes, a variety of tools and connections or sales channels are generally needed, which are hardly ever completely free to provide. Good solutions with a beneficial range of functions start at around 30 to 40 Euros per month. Depending on the equipment, dropshipping software can be significantly more expensive. 300, 400, or 500 Euros per month and per user and more are possible. These are then often all-round multi-channel e-commerce software, with which users can manage all their sales channels via a single platform, creating whole shop systems with dropshipping options or similar comprehensive programs.