What is Ghost Commerce - How Does It Work in 2024

  • 10 mins read
  • By Jason Loyed
  • March 15, 2024

Understanding Ghost Commerce Ghost commerce, also known as ghost dropshipping, is an emerging business model that offers a unique approach to selling products online. 

Unlike traditional eCommerce methods, ghost commerce eliminates the need to manage inventory, handle shipping logistics, or operate a physical storefront. 

Instead, it allows entrepreneurs and influencers to showcase and promote products from various suppliers, acting as a middleman between customers and manufacturers.

At its core, ghost commerce is a fusion of dropshipping and influencer marketing strategies. Entrepreneurs leveraging this model do not own or stock the products they sell. 

Rather, they partner with third-party suppliers or manufacturers who handle the inventory and fulfillment process. By curating a selection of products from these suppliers, ghost commerce retailers can create an online presence, market the items through their website or social media channels, and facilitate sales without the hassles of inventory management.

The concept of ghost commerce has gained significant traction in recent years due to its low barrier to entry and scalability. With minimal upfront investment and overhead costs, aspiring business owners can tap into the vast potential of eCommerce without the traditional constraints. 

This model allows them to focus their efforts on branding, marketing, and customer engagement, leaving the logistics to the suppliers.

How Does a Ghost Commerce company work?

Online Presence Setup 

The first step is to establish an online presence, either through a website, social media channels, or both. This serves as the virtual storefront where products are showcased and marketed. Entrepreneurs can leverage platforms like Shopify, WooCommerce, or Magento to create a professional-looking online store without the need for physical inventory.

Supplier Integration 

Ghost commerce businesses partner with third-party suppliers or manufacturers who offer dropshipping services. These suppliers have existing inventory and handle all aspects of product fulfillment. The entrepreneur integrates their online store with the supplier's system, enabling seamless order processing and data synchronization.

Product Curation 

From the supplier's catalog, the ghost commerce retailer carefully selects and curates a range of products to feature on their online store or social media platforms. They have the flexibility to customize product descriptions, images, and pricing to align with their brand identity and target audience.

Customer Acquisition 

Through effective marketing strategies, such as content creation, social media promotion, influencer collaborations, and search engine optimization (SEO), ghost commerce businesses attract potential customers to their online presence. The goal is to drive targeted traffic and generate interest in the featured products.

Order Processing 

When a customer places an order on the entrepreneur's platform, the order details, including the customer's shipping information and payment, are automatically forwarded to the integrated supplier. This process can be streamlined through automated integrations, minimizing manual intervention.

Fulfillment and Shipping

Upon receiving the order, the supplier handles the entire fulfillment process. They pick, pack, and ship the product directly to the customer's provided address. Depending on the arrangement, the supplier may use branded packaging or discreet unbranded shipping materials.

Payment and Profit 

The ghost commerce retailer collects the payment from the customer at the retail price. They then pay the supplier the wholesale cost of the product, keeping the profit margin as their revenue. This eliminates the need to manage inventory costs or storage fees.

Customer Support

 While the supplier handles the physical fulfillment, the ghost commerce business is responsible for providing customer support, addressing inquiries, managing returns or exchanges, and ensuring a positive customer experience throughout the purchasing journey.

By leveraging this model, ghost commerce companies can capitalize on the growing demand for online shopping while minimizing the operational complexities associated with traditional eCommerce businesses.

Is Ghost commerce the Same As dropshipping?

No, ghost commerce and dropshipping are not exactly the same, although they share some similarities. Here's how they differ:

Dropshipping:

  • In dropshipping, the retailer lists products from a supplier on their online store and facilitates customer orders.
  • When an order is placed, the retailer purchases the product from the supplier, who then ships it directly to the customer.
  • The retailer is responsible for handling customer service, returns, and exchanges.
  • Dropshipping businesses still need to set up and manage their own online storefront.

Ghost Commerce:

  • With ghost commerce, the retailer does not own or operate an online store themselves.
  • Instead, they act as an influencer or affiliate, promoting products from suppliers on their website, blog, or social media channels.
  • Customers make purchases through the retailer's affiliate links or product recommendations.
  • The supplier handles all aspects of fulfillment, shipping, and customer service.
  • Ghost commerce businesses do not need to manage an e-commerce platform or handle order processing.

Key Differences:

  • Dropshipping involves running an online store, while ghost commerce relies on affiliate marketing and influencer promotion.
  • Dropshippers purchase products from suppliers, while ghost commerce retailers earn commissions on sales.
  • Ghost commerce businesses have minimal operational overhead compared to dropshipping stores.

While both models eliminate the need for physical inventory, ghost commerce takes a more hands-off approach by leveraging affiliate and influencer marketing strategies. It allows entrepreneurs to focus solely on product curation and promotion, leaving the logistics to the suppliers.

Ghost Commerce vs Dropshipping: What's the Difference and Which is Better?

Can You Make Money With Ghost Commerce?

Yes, it is definitely possible to make money with ghost commerce, but like any business model, it requires strategic planning and consistent effort. Here are some key points about the potential for generating income through ghost commerce:

  1. Low Startup Costs: One of the biggest advantages of ghost commerce is the relatively low startup costs compared to traditional eCommerce businesses. Since you don't need to invest in inventory, warehousing, or logistics, the initial financial barriers are much lower, making it an attractive option for aspiring entrepreneurs with limited resources.
  2. Passive Income Potential: Ghost commerce can provide opportunities for passive income streams. Once you've established a strong online presence, optimized your marketing strategies, and built a loyal audience, the sales can continue to flow with minimal ongoing effort, providing a consistent revenue stream.
  3. Scalability: Unlike brick-and-mortar stores or traditional eCommerce models, ghost commerce businesses can scale rapidly without the constraints of physical space or inventory management. As your audience and sales grow, you can expand your product offerings and supplier partnerships relatively easily.
  4. Profit Margins: While the profit margins in ghost commerce may be lower compared to selling your own products, the low overhead costs can still make it a lucrative endeavor. By strategically curating high-demand products and leveraging effective marketing techniques, you can maximize your earnings.
  5. Diverse Income Streams: Many successful ghost commerce entrepreneurs diversify their income streams by promoting products across multiple platforms, such as websites, blogs, social media channels, and influencer collaborations. This diversification can lead to higher overall earnings and reduce reliance on a single traffic source.

However, it's important to note that success in ghost commerce requires dedication, effective marketing skills, and the ability to build trust and credibility with your audience. 

Consistently providing value, establishing partnerships with reputable suppliers, and maintaining transparency with customers are crucial factors in maximizing your earning potential in this business model.

Conclusion

So this is all about ghost dropshipping or ghost commerce, I  hope you will understand now how ghost commerce works,

If you are planning to start your ghost commerce store go ahead we are here to guide you if you have any doubts contact us at Ecom Parkour.

Jason Loyed
Co Founder of Ecomparkour
As a Paid Media & Web Analytics Specialist, I accelerate e-commerce brand growth by leveraging paid media, data tracking, and web analysis to optimise digital strategies.
Table Of Content
By Jason Loyed
10 mins read

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What is Ghost Commerce - How Does It Work in 2024

  • March 15, 2024

Understanding Ghost Commerce Ghost commerce, also known as ghost dropshipping, is an emerging business model that offers a unique approach to selling products online. 

Unlike traditional eCommerce methods, ghost commerce eliminates the need to manage inventory, handle shipping logistics, or operate a physical storefront. 

Instead, it allows entrepreneurs and influencers to showcase and promote products from various suppliers, acting as a middleman between customers and manufacturers.

At its core, ghost commerce is a fusion of dropshipping and influencer marketing strategies. Entrepreneurs leveraging this model do not own or stock the products they sell. 

Rather, they partner with third-party suppliers or manufacturers who handle the inventory and fulfillment process. By curating a selection of products from these suppliers, ghost commerce retailers can create an online presence, market the items through their website or social media channels, and facilitate sales without the hassles of inventory management.

The concept of ghost commerce has gained significant traction in recent years due to its low barrier to entry and scalability. With minimal upfront investment and overhead costs, aspiring business owners can tap into the vast potential of eCommerce without the traditional constraints. 

This model allows them to focus their efforts on branding, marketing, and customer engagement, leaving the logistics to the suppliers.

How Does a Ghost Commerce company work?

Online Presence Setup 

The first step is to establish an online presence, either through a website, social media channels, or both. This serves as the virtual storefront where products are showcased and marketed. Entrepreneurs can leverage platforms like Shopify, WooCommerce, or Magento to create a professional-looking online store without the need for physical inventory.

Supplier Integration 

Ghost commerce businesses partner with third-party suppliers or manufacturers who offer dropshipping services. These suppliers have existing inventory and handle all aspects of product fulfillment. The entrepreneur integrates their online store with the supplier's system, enabling seamless order processing and data synchronization.

Product Curation 

From the supplier's catalog, the ghost commerce retailer carefully selects and curates a range of products to feature on their online store or social media platforms. They have the flexibility to customize product descriptions, images, and pricing to align with their brand identity and target audience.

Customer Acquisition 

Through effective marketing strategies, such as content creation, social media promotion, influencer collaborations, and search engine optimization (SEO), ghost commerce businesses attract potential customers to their online presence. The goal is to drive targeted traffic and generate interest in the featured products.

Order Processing 

When a customer places an order on the entrepreneur's platform, the order details, including the customer's shipping information and payment, are automatically forwarded to the integrated supplier. This process can be streamlined through automated integrations, minimizing manual intervention.

Fulfillment and Shipping

Upon receiving the order, the supplier handles the entire fulfillment process. They pick, pack, and ship the product directly to the customer's provided address. Depending on the arrangement, the supplier may use branded packaging or discreet unbranded shipping materials.

Payment and Profit 

The ghost commerce retailer collects the payment from the customer at the retail price. They then pay the supplier the wholesale cost of the product, keeping the profit margin as their revenue. This eliminates the need to manage inventory costs or storage fees.

Customer Support

 While the supplier handles the physical fulfillment, the ghost commerce business is responsible for providing customer support, addressing inquiries, managing returns or exchanges, and ensuring a positive customer experience throughout the purchasing journey.

By leveraging this model, ghost commerce companies can capitalize on the growing demand for online shopping while minimizing the operational complexities associated with traditional eCommerce businesses.

Is Ghost commerce the Same As dropshipping?

No, ghost commerce and dropshipping are not exactly the same, although they share some similarities. Here's how they differ:

Dropshipping:

  • In dropshipping, the retailer lists products from a supplier on their online store and facilitates customer orders.
  • When an order is placed, the retailer purchases the product from the supplier, who then ships it directly to the customer.
  • The retailer is responsible for handling customer service, returns, and exchanges.
  • Dropshipping businesses still need to set up and manage their own online storefront.

Ghost Commerce:

  • With ghost commerce, the retailer does not own or operate an online store themselves.
  • Instead, they act as an influencer or affiliate, promoting products from suppliers on their website, blog, or social media channels.
  • Customers make purchases through the retailer's affiliate links or product recommendations.
  • The supplier handles all aspects of fulfillment, shipping, and customer service.
  • Ghost commerce businesses do not need to manage an e-commerce platform or handle order processing.

Key Differences:

  • Dropshipping involves running an online store, while ghost commerce relies on affiliate marketing and influencer promotion.
  • Dropshippers purchase products from suppliers, while ghost commerce retailers earn commissions on sales.
  • Ghost commerce businesses have minimal operational overhead compared to dropshipping stores.

While both models eliminate the need for physical inventory, ghost commerce takes a more hands-off approach by leveraging affiliate and influencer marketing strategies. It allows entrepreneurs to focus solely on product curation and promotion, leaving the logistics to the suppliers.

Ghost Commerce vs Dropshipping: What's the Difference and Which is Better?

Can You Make Money With Ghost Commerce?

Yes, it is definitely possible to make money with ghost commerce, but like any business model, it requires strategic planning and consistent effort. Here are some key points about the potential for generating income through ghost commerce:

  1. Low Startup Costs: One of the biggest advantages of ghost commerce is the relatively low startup costs compared to traditional eCommerce businesses. Since you don't need to invest in inventory, warehousing, or logistics, the initial financial barriers are much lower, making it an attractive option for aspiring entrepreneurs with limited resources.
  2. Passive Income Potential: Ghost commerce can provide opportunities for passive income streams. Once you've established a strong online presence, optimized your marketing strategies, and built a loyal audience, the sales can continue to flow with minimal ongoing effort, providing a consistent revenue stream.
  3. Scalability: Unlike brick-and-mortar stores or traditional eCommerce models, ghost commerce businesses can scale rapidly without the constraints of physical space or inventory management. As your audience and sales grow, you can expand your product offerings and supplier partnerships relatively easily.
  4. Profit Margins: While the profit margins in ghost commerce may be lower compared to selling your own products, the low overhead costs can still make it a lucrative endeavor. By strategically curating high-demand products and leveraging effective marketing techniques, you can maximize your earnings.
  5. Diverse Income Streams: Many successful ghost commerce entrepreneurs diversify their income streams by promoting products across multiple platforms, such as websites, blogs, social media channels, and influencer collaborations. This diversification can lead to higher overall earnings and reduce reliance on a single traffic source.

However, it's important to note that success in ghost commerce requires dedication, effective marketing skills, and the ability to build trust and credibility with your audience. 

Consistently providing value, establishing partnerships with reputable suppliers, and maintaining transparency with customers are crucial factors in maximizing your earning potential in this business model.

Conclusion

So this is all about ghost dropshipping or ghost commerce, I  hope you will understand now how ghost commerce works,

If you are planning to start your ghost commerce store go ahead we are here to guide you if you have any doubts contact us at Ecom Parkour.

ecomparkour
We are your trusted marketing partner, specializing in helping you buy Facebook accounts, and dedicated to unlocking your business's full potential.
Phone: +852 5362 7682
Email: hongkong@ecomparkour.com

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