Shipturtle is suitable for building both marketplaces and drop-ship businesses.
A marketplace is a platform where multiple sellers can list and sell their products to customers. In contrast, dropshipping is a business model where the retailer does not keep inventory, but instead transfers customer orders and shipment details to a manufacturer or supplier, who then ships the products directly to the customer.
Operationally, both models are similar, the difference is primarily in billing and accounting.
1. Marketplace: The customer is buying from the vendor.
The vendor raises the invoice to the customer. The merchant raises an invoice to the vendor for services in facilitating the transaction.
Example: Suppose the vendor offers a product to you for $100 and you sell it for $150 on your platform. In this case, the vendor will invoice your customer for $150, and you will raise a platform fee of $50 to your vendor to facilitate the transaction. In some countries, you may need to charge tax on top of $50, which means Vendor will get $150 – $50 – Tax
2. Dropshipper: The customer is buying from the merchant.
The merchant raises the invoice to the customer. The vendor then raises an invoice to the merchant for the goods sold less the merchant margin.
Example: Suppose the vendor offers a product to you for $100 and you sell it for $150 on your platform. In this case you will invoice your customer for $150, and the vendor will invoice you for $100. The vendor will get $100 as per their invoice.
Shipturtle manages both these models by making changes to the respective invoice documents. You must, however, consult your accountant for your business. We do not claim expertise in accounting and taxation.