What is dropshipping? It is a business model in which the selling company does not manufacture or own any product, only acting as an intermediary between suppliers and end consumers.
Since July 1, new legislation has made dropshipping practices severe restrictions, clogging up customs and prompting several complaints from consumers who fail to see their products arrive on time.
However, Portuguese e-commerce site Insania has just invested € 200,000 to open a logistics center to position itself as “a solution for companies that have dropshipping business models and suffer from customs restrictions,” the company says. in the statement.
The insignia guarantees fast delivery with no additional fees. “For consumers, this is a solution as they will not have to provide proof of VAT payment or wait for mandatory customs clearance from July 1 for orders from outside the Community,” says Insania.
“This investment not only enables physical stores to be stocked, but also increases product availability, lowers prices and guarantees same-day delivery in the Lisbon and Porto areas,” emphasizes Maria Amelia Teixeira, CEO of Insania.
A solution that, he adds, “reduces dependence on suppliers for immediate product availability.”
Many sites use this business model where a reseller sells items from other international suppliers but they have no inventory. It is just an intermediary responsible for the demonstration and distribution of products, with no authority to manage inventory or send it to third parties. Examples of this practice are Amazon, AliExpress, eBay or the vanished Gearbest.
“Dropshipping has never been an option for Insania as it is not sustainable for us. We believe that the best way is to increase our warehouse stock, which is why we invested in the logistics division to increase our warehouse capacity, ”explains the manager of Insania, a marketplace that aims to take over the Amazon giant’s stake in Portugal.
Insania, established in November 2010 and ending 2020 with a turnover of around three million euros, opened two physical stores in Porto and Lisbon in 2018 with an investment of over two million euros, and opened a store in Spain last year.
