E-Commerce Business at its core can be referred to the sale and purchase of goods as well as services via electronic channels most probably the Internet. Internet can be termed as one of the wildest invention of this century and as created a boom in online sale and business industry as well. People now tend to perform all their activities on Internet and that also includes shopping. Internet has completely revolutionized the way of doing business as you can not only sell the physical products but can also sell digitized products such as videos, audios, software and services over the Internet through your proper E-Commerce Business.
In a successful and comprehensive E-Commerce Business all the transactions that involve various business and government organizations, consumers and financial organizations are done online via Internet. The concept of E-Commerce has evolved over the years and with the advent of technology related to smart phones online business has become more popular and mobile commerce has created its own independent market. Social Media is also a great driver of E-Commerce Business as Face Book drives 85 percent of sales on the E-Commerce platform of giants like Shopify.
Pakistan is also included as one of those countries where the percentage of Internet and smart phones users is leveraging with each passing day. However the size of E-Commerce in Pakistan is considerably small but with the advancement in technology and building of trusting among the business and consumer it is expected that soon there will be realization of the full potential of E-Commerce Business in Pakistan as there are number of advantages associated with the E-Commerce Business such as there are no geographical barriers as it comes in an open structure, the cost of transaction is also very low in E-Commerce businesses and there are very limited barriers associated with the entry in the world of E-Commerce Business.
In the current scenario there are number of factors that are hampering the growth of E-Commerce in Pakistan. These factors are explained in detail as under:-
Delusion about E-Commerce Business in Pakistan
Most of the people in Pakistan don’t have the actual concept about the E-Commerce business due to low literacy rate and non-exposure to the actual facts and figures regarding E-Commerce. Most of the people think online shopping only revolves around purchasing digitized products and the payment can be only done through the credit card. Most of the people in Pakistan don’t possess a credit card so that don’t realize that they can also purchase online physical products without having a credit card. Moreover the conventional entrepreneur of Pakistan don’t know exactly that E-Commerce Business means serving the existing customers, developing new and advanced markets and exploring new channels of distribution for the existing products.
Drop Shipping is a term used for retail business where you can setup a comprehensive retail fulfillment without keeping and maintain specific inventory and stock at hand. The basic idea behind Drop Shipping is not to spend money in maintaining inventory and when you have to sell a product you purchase it from another third party and deliver it to your customer directly. In this kind of business the merchant virtually sells the product and never physically sees or purchases the product before reselling it. It is different from the standard retail method of as merchant don’t have to maintain his own inventory. Instead the inventory or stock is purchased from the third party depending upon the orders. The products for the placed orders are purchased from the wholesalers and third party manufacturers. The concept of drop shipping is ideal for the online businesses where the merchant or seller can’t maintain a physical warehouse or an inventory.
There are number of benefits and advantages associated with the drop shipping such in order to launch a business with the concept of drop shipping you need less capital as compared to a business that uses standard retail and inventory approach. You don’t have to invest thousands in maintaining and keeping the stock as in drop shipping you usually purchase a product after you have generated a sale and are being paid by the customer first. So in short we can say that in order to start a drop shipping business you need a very little money o invest and no major inventory you front investments. Basically drop shipping is an extended form of E-Commerce and is very easy to manage as you don’t have to deal with the physical products. There is no need of marinating and paying for a warehouse, there is no worries how to package and ship your order as well as you don’t have to worry about tracking the inventory and managing the accounts of inventory. There is no worries regarding items to be handled and also worries about the inbound shipments as well as you don’t have to worry about ordering new products for the inventory to keep the stock at a specific level.
Drop shipping results in low overhead cost as you don’t have to purchase the inventory beforehand that means you overhead expenses are quite low. You can simply run your drop shipping business directly from home from your laptop as it let you operate from a flexible location. The only thing you have to do properly is to run an effective communication with your customers and suppliers and rest is done very easily. Drop shipping also let you offer a wide range of products to your customers as you don’t have to purchase products prior to the sales so you can present a huge selection in front of your customers so that they can select from the selection. The Drop shipping business is also very easy to scale as you can simply leverage the suppliers and most of the work in processing the order is done by the suppliers. All these plus points make drop shipping a very attractive option for both the beginners and advanced E Commerce businessmen.
Scope of Drop Shipping in Pakistan
Pakistan is already experiencing boom in the usage of internet and online shopping. With each passing day people are becoming more and more prone towards E-Shopping and E-Commerce. However there are a few obstacles associated with the concept of drop shipping in Pakistan and one of the biggest concerns is that most of the foreign companies do not ship their items and products to Pakistan. Most of