Dropshipping in India: How to Build a Profitable E-Commerce Business

Introduction

Imagine being an eCommerce store without any actual store. Crazy!!

All you need to do is to have a website and pass off the orders to another business that actually stores the items and will ship it to the customer. 

Sounds too good to be true? Well, that is what dropshipping business brings to the table. It is an order fullfillment method where an online businesses sells products without keeping them in stock.

Dropshipping business in India is gaining traction among entrepreneurs because it’s low-risk and budget-friendly all the while attracting customers like a regular online store using multiple acquisition/growth tactics such as social media marketing, search marketing, affiliate marketing etc.

To start a dropshipping business in India, one common tactic is to tie up with sellers from wholesale marketplaces such as Ebay or Alibaba who sell items at wholesale rates and then sell those items from your digital store using different marketing strategies. (Ofcourse with a margin baked in!)

However, there’s the catch. While it might seem like a fast way to make money (selling products you don’t even stock and pocketing a margin), it comes with its share of challenges.

So, how does the dropshipping business model works in India? What are the pros and cons? How do you pick the right suppliers or platforms? And how can you make it successful? In this guide, we’ll talk about everything you need to know about dropshipping in India to help you get started.

What is Dropshipping Business?

With dropshipping, you won't need an inventory to store and process shipments. A third party, a.k.a the dropshipper, handles the entire shipment, including production and packaging. All that you will need to do is set up an eCommerce or an online business store and sell the products online.

Once an order has been placed by a customer, you will reach out to the dropshipping business . You will purchase the product from them and have it shipped to the shopper. 

This is the broad concept of dropshipping business. Let’s take a look at how it fits into the Indian eCommerce industry.

How Does Dropshipping Business Work in the Indian eCommerce Industry?

Fancy a try in entrepreneurship without big budget and inventory costs? Dropshipping is a low-risk, cost-effective way to enter the eCommerce market.
India’s eCommerce ecosystem has been experiencing exponential growth, driven by increasing internet penetration, a burgeoning middle class, and the convenience of online shopping.

Dropshipping in India s uniquely positioned to utilize these trends, providing a low-risk entry point for budding entrepreneurs and small businesses. Here’s a closer look at its role and potential in shaping India's eCommerce landscape:

1. Low Entry Point

Creating an eCommerce store where you start from scratch is extremely resource-intensive. Unless you already have an offline business that you want to move to digital, the overhead costs and labor requirements are going to be huge.

With dropshipping business, entrepreneurs can start dropshipping without heavy investments in inventory, warehousing, or logistics, democratizing access to the e-commerce market.All you need is a dropshipping website / dropshipping store that looks and feel like an eCommerce store!

2. Entry to Small Niches

Think about an item that is very niche but in demand from a small community of buyers. Polaroid cameras and accessories for example.

You might have only a small volume of orders every month but there’s still room to make profit. However, setting up inventory would not make sense. In these cases, dropshipping comes in handy as you can get items sourced from global suppliers when you have orders.

3. Work with Global supply

One of the most common dropshipping strategies includes buying cheap items from global markets like China and selling them with a margin. Previously, dropshipping businesses would generally source from AliExpress. However, with its ban in India, things have become complicated.

For dropshipping in India, it is still legal to buy from AliExpress’s parent company, Alibaba, or other suppliers. Dropshipping helps you tap into a global supply chain with comparatively smaller investments.

4. Integrating Global Supply Chains

India's vast geography and customer base pose significant logistical challenges. Dropshipping business simplifies operations by outsourcing order fulfillment to suppliers who already have an established logistics framework and are better equipped to handle deliveries.

Collaboration with local couriers ensures faster and more reliable deliveries, enhancing customer satisfaction.

Dropshipping in India helps online retailers let go of the hassle of maintaining delivery agents and managing inventory. It also allows them to procure exclusive products on-demand, even if ordered in lesser quantities. This is especially true for businesses that sell customized products.

Comparison Between a Normal Shipping Model and a Dropshipping Model in India

Let’s take a closer look at how traditional eCommerce models compare to dropshipping business model in terms of processes, cost, and management.

Normal Shipping Model: For a regular shop, the store manages all aspects of the supply chain. Here's how it works:

Order Placement: A customer places an order on the retailer’s website.

Inventory Check: The retailer verifies the availability of stock in their warehouse or storage facility.

Fulfillment: The retailer picks, packs, and ships the product directly to the customer.

Customer Payment: The customer pays the retailer for the product and shipping charges.

Dropshipping Business Model: In a dropshipping business model, most operational tasks are outsourced to suppliers or manufacturers. Here's how it works:

Order Placement: A customer places an order on the retailer’s website.

Order Notification: The retailer forwards the order details to the dropshipping supplier.

Product Fulfillment: The supplier manufactures (if required), processes, and ships the product directly to the customer.

Customer Payment: The customer pays the retailer, who retains the profit margin after covering the supplier’s costs.

What are the Key Benefits of Dropshipping in India?

1. No added stress about inventory

Traditional eCommerce business models in India require significant storage and inventory management, which can be challenging and time-consuming. However, the dropshipping business model eliminates this burden. Online retailers using dropshipping in India don’t need to store products in bulk or manage complex inventory systems.

This approach saves considerable time and resources, allowing businesses to focus on other critical aspects of their operations, such as marketing and customer engagement.

2. Suitable for businesses with a low budget

Running a conventional eCommerce business in India involves high upfront costs, including expenses for manufacturing, processing, storing, and shipping products, along with managing returns and refunds. These costs can be overwhelming for businesses with limited budgets.

Dropshipping business significantly reduces these financial pressures. Payments are only made after a customer places and pays for an order, minimizing the risk of financial loss. With dropshipping business, entrepreneurs can operate with minimal capital, focusing their spending on essentials like marketing and accounting.

3. Flexibility to Offer a Wide Range of Products

Dropshipping business allows Indian eCommerce businesses to offer an extensive product range without the need for stocking or warehousing. This flexibility helps retailers cater to diverse customer preferences across regions and demographics, from fashion to electronics and niche products.

Retailers can quickly add trending or seasonal items to their catalogs, testing new categories without financial risk. By partnering with reliable suppliers, businesses can reduce costs and stay competitive in India’s fast-growing eCommerce market. Dropshipping in India can be overall a very flexible business.

4. Low Risk business model

Dropshipping business reduces financial and operational risks for Indian eCommerce businesses. Retailers don’t need to purchase large quantities of stock upfront, avoiding the problem of unsold inventory. They only pay for products that customers have already ordered.

This model ensures that retailers are not burdened with dead stock or unnecessary liabilities, making it a secure and efficient way to operate in the competitive Indian market.

5. Independent of Location

Dropshipping business allows Indian retailers to manage their businesses from virtually anywhere in the country. With just a website, a computer, and a stable internet connection, entrepreneurs can run their eCommerce operations seamlessly.

This flexibility makes dropshipping an attractive option, especially for those looking to start a business without being tied to a physical location. It fosters experimentation and growth, enabling retailers to explore new opportunities in the thriving Indian eCommerce industry.

Guide to Starting a Dropshipping Business In India

Fancy a try in entrepreneurship without big budget and inventory costs? Dropshipping is a low-risk, cost-effective way to enter the eCommerce market. Here’s how to start dropshipping business in India

1. Partner with a Dropshipping Platform and Supplier

There are two things to do when you start. A. Find a dropshipping platform to host your website and easily import products from the supplier and B. Find a supplier to dropship your products with.

2. Access and Choose Products

Once you are set up, the supplier will provide access to a catalog of products. These catalogs often include details like product descriptions, images, pricing, and supplier information. Retailers can choose products that align with their niche or customer base and download them in a format like CSV files.

3. Set Up an Online Store and List Products

Retailers need to create their online storefront on platforms like Shopify, WooCommerce, or similar eCommerce solutions. Once the store is ready, the selected products are uploaded to the website, complete with pricing adjustments with profit margins. If the Dropshipper supports it, the catalog can be integrated with your eCommerce platform.

4. Process Customer Orders

When a customer places an order on the retailer’s website, the order details are forwarded to the dropshipping supplier. This is often automated through the dropshipping app, ensuring a seamless and efficient workflow.

5. Fulfillment and Shipping by the Supplier

The supplier handles the rest: processing the order, packaging the product, and shipping it directly to the customer. Many suppliers also let you use your branding. With this option, the customer will receive the product with your brand details and the supplier will never be mentioned.

6. Reliable Customer Support and Post-Sale Management

While suppliers handle fulfillment, the retailer (you) remains responsible for customer support. They must address queries, resolve complaints, and manage returns or exchanges. Building strong communication with suppliers is crucial to ensure timely resolutions.

7. Dropshipping Legal Compliance for India

Operating dropshipping in India requires compliance with local regulations to ensure all business transactions are vetted legally. This includes obtaining a Business license, Goods and Services Tax (GST) registration, especially if annual turnover exceeds the specified threshold. 

Best Dropshipping Platforms and Services in India

1. Clickpost

Clickpost is a logistics intelligence platform designed to streamline shipping for eCommerce businesses, including dropshipping businesses. While not a traditional dropshipping platform, Clickpost integrates with courier partners to simplify logistics and ensure faster delivery to customers.

Its features include real-time shipment tracking, automated notifications, and detailed analytics, making it an ideal choice for dropshipping businesses looking to improve operational efficiency.

2. Indiamart

Indiamart, one of India’s leading dropshipping business, is a B2B platform that connects suppliers and retailers. With this platform, you, as a retailer, will not have to struggle or waste time finding suppliers willing to produce the products you wish to sell.

This dropshipping company primarily focuses on providing pharmaceutical services. However, they also offer products in fashion, food, jewelry, and furniture.

3. TradeIndia

Founded in 1996, TradeIndia functions as a B2B dropshipping business platform in India. It aims to bridge the gap between Indian manufacturers and retailers. The company provides a “360-degree digital solution” to its retail partners.

TradeIndia offers a platform for secure transactions between buyers and suppliers. Additionally, the company assists in locating manufacturers, exporters, and suppliers in India from a global perspective.

4. Exporters India

Exporters India is another B2B Indian dropshipping platform that aims to connect sellers and manufacturers. This company is known for its reliable and flexible services. It is known for its services globally and has been running successfully for the past two decades. 

This dropshipping company has a majority of positive reviews from the retailer's end. They can help their clients connect with companies such as Primark.

5. Coorgle Dropshipping (CDS)

CDS is one of the best automated dropshipping platform in India. It provides a wide range of product categories, from accessories and apparel to electronics. This Indian dropshipping company has a simple user interface and website, making it easy for retailers in India to navigate and find what they are looking for.

One advantage of CDS for retailers is that their names do not appear on the packaging. By withholding their name, CDS maintains anonymity regarding their services.

6. Tradeford

Tradeford is a reputable dropshipping company providing a platform for retailers to access a wide range of products from Indian manufacturers. This company assures retailers of the quality standards of their products.

Unlike the companies listed above, Tradeford is a growth-focused dropshipping company best suited for businesses looking to expand. Since the company is relatively new, it strives to cater better to customers' needs.

7. Baapstore

Based in Chennai, India, Baapstore is a dropshipping company that was started only a few years ago. Within a short amount of time, it has grown to become a reputable and established company. Baapstore caters to all back-end needs of a retailer.

Their services range from delivering, technical, hosting, and cataloging. This gives plenty of time for retailers to focus on their goods. The company has partnered with other reputable brands in India, such as Speed Post, Delhivery, FedEx, Ecom Express, and Aramex. 

8. Hothaat

Established in 2012, Hothaat is a newcomer in the Indian dropshipping industry. This company provides a wide assortment of facilities on its website. It allows its retailers and sellers to maximize the usage of its facilities as much as they wish to.

The main aim of this dropshipping company is to find competitive and reliable manufacturers, suppliers, and merchants to mobilize their products. The platform is managed by professionals and a dedicated workforce, making it a reliable choice for businesses.

9. Jim Trade

Jim Trade is a B2B platform claiming to be India’s largest online business directory. It provides global buyers with information on Indian suppliers across various categories, including agriculture, electronics, and wellness.

The platform also serves as an integrated sourcing tool for B2B buyers.

10. Shopify

Shopify is a globally popular eCommerce platform well-suited for Indian dropshippers. With its seamless integrations for dropshipping apps like Oberlo and Spocket, Shopify enables businesses to set up online stores quickly.

Features such as customizable templates, automated inventory management, and integrated payment gateways make Shopify an excellent choice for scaling dropshipping businesses.

11. Printrove

Printrove is a Tamil Nadu-based print-on-demand dropshipping platform. It offers custom-printed products such as clothing, mugs, and notepads.

Once an order is placed, Printrove handles printing, packing, and shipping while keeping its branding off the products. Its no-minimum-order policy and fast fulfillment make it a great choice for custom product businesses.

12. Glowroad

GlowRoad is a unique dropshipping platform focused on reselling. Retailers can promote products on platforms like Facebook, Instagram, and WhatsApp after signing up. GlowRoad provides additional features such as a webshop, payment gateways, and shipping support, with plans to introduce advanced analytics and personalized marketing.

In April 2022, Amazon acquired GlowRoad in an all-cash deal to enhance its social commerce presence in India.

How to Choose the Best Dropshipping Business Partner in India

Selecting the right dropshipping partner is crucial for your e-commerce success. Here are key factors to consider:

To identify the right dropshipping companies, begin by clearly defining your product and service requirements. Understanding your specific needs ensures you focus on suppliers capable of meeting them effectively. A reliable dropshipping company will help you meet customer expectations and drive business growth.

Final Thoughts

Dropshipping business is a great business model for startups and businesses with limited budgets, offering a profitable and low-risk opportunity. It allows retailers to bypass the complexities of manufacturing and shipping, enabling them to focus on other critical aspects of their business. This model also saves time by removing the need for managing inventory, making it an ideal choice for entrepreneurs, particularly in India. 

We hope this guide has helped clarify how dropshipping business works in India, how to start dropshipping in India and provided valuable insights to help you choose the right dropshipping partner for your business.