The benefits of drop shipping

The main reason people decide to drop ship items instead of selling items in a more traditional form is that drop shipping offers the entrepreneur many benefits.

Less upfront capital.
With the traditional form of stock reselling, you need to prepurchase stock in advance. Generally wholesalers require you to purchase a minimum quantity (normally at least 500 units) before they will even talk to you. Not only do need to pay for this in advance but you also need to work out storage of these units. The main issue here is your tied to this one stock line and have outlaid a significant amount of money to be able to sell it. Continue reading

The benefits of drop shipping

Picking a niche that is of interest

One of the first things you need to do after deciding to start a e-commerce dropship store is to decide upon what niche you like to enter and what products you would like to sell.

Is no silver bullet for the best niches to get into as many of them have different merits and huge markets. When it does come down to is your personal preference and interests. You also need to consider how long you are planning to run this business for. You may find something that is amazing to sell with great margins and returns, however if you are not very interested in the niche itself you will very quickly lose focus and not work as much as you should. Continue reading

Picking a niche that is of interest

The drop shipping order process

Still curious about what drop shipping is and how you can do it? Hopefully the below order processes will help to explain it further.

 

Traditional e-commerce store:

  1. you purchase stock in bulk from a supplier
  2. you receive the goods and store it
  3. you manually list the stock for sale on your website
  4. you advertise your website and the goods you have for sale
  5. customer views your website and orders an item
  6. you pick and pack the item and make it ready for shipping
  7. you ship the item directly to the customer

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The drop shipping order process

Manufacturers vs wholesalers vs retailers

When you’re trying to find a supplier you will come across a number of manufacturers, wholesalers and even retailers. The trick is to know the difference between the three of them and what the best option is for you.

 

Manufacturer.
A manufacturer is a company that physically creates and manufactures their own products and makes these available for sale. Many manufacturers do not sell directly to the public and rely on wholesalers to resell their products. The main reason they do this is because they do not have the sales staff and resources to handle individual small end-user sales. Continue reading

Manufacturers vs wholesalers vs retailers

Not getting scammed and watching out for fake drop ship suppliers

Unfortunately the Internet is still the wild West. It is also a worldwide platform which does offer some form of anonymity. You have to remember that not everyone is as nice as you and some people are out to rip you off.

There are a couple of ways you can avoid getting scammed or at least minimise the risk.

Place a small test order.
Before dealing with any supplier on ongoing basis, you really should place a small test order first. You should make sure this test order to sent directly to you or someone you trust. The selected test the supplier before you build ongoing relationship. Continue reading

Not getting scammed and watching out for fake drop ship suppliers

The disadvantages of drop shipping

Although drop shipping is a business offers a number of distinct advantages it also has a few disadvantages. The low barriers to entry, the no set location and competitive nature of e-commerce stores can make drop shipping a bit harder.

Resell price.
Depending upon what niche you enter, you may find that other people who are also drop shipping mean that you need to have low margins to compete. This is especially true due to the low barriers of entry, minimal overhead costs and the fact that they have invested so little to get started means that some people are willing to sell a rock bottom prices. There are ways to overcome this issue which will cover in more detail later on. Continue reading

The disadvantages of drop shipping

Handling returns

It does not matter what you sell who you purchase stock from unfortunately at some stage there will be the need to handle returns. A dropship store is different to a traditional store as you did not directly send the product to the customer. So there are a couple of different options available to you depending on who the supplier is and how you want to handle the return itself. The other option to consider is if you want to hide the supplier from your customer (this is very useful for products that have repeat sales, or for customers you are trying to upsell)

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Handling returns