One of the proven ways of making money online is dropshipping. It can provide you with the chance to make good money continuously if it is properly done.
All you need to do is to find a reliable supplier, create an online store and start interacting with customers without leaving your home. To make money by dropshipping, you will have to find suppliers that will give you good discounts.
This article provides valuable you can implement to help you get the most out of your dropshipping business. The points discussed include:
- How Drop Shipping Works
- Challenges Associated With Dropshipping
- Harnessing the resources of the internet
- Get The Right Suppliers
- Conduct Diligent Research
How Drop Shipping Works
With drop shipping, you work with a wholesaler or distributor that offers this service. Not all manufacturers and wholesalers offer drop shipping, but many do.
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You handle all the marketing for your business. This means that you set up your website with a shopping cart (or set up a virtual storefront on Amazon), write your blog, do social media and email marketing, and any other way you can contact your prospects and customers.
You will tell them all about the products and use your marketing and selling skills to tell them how the products will enhance their lives. Essentially, you do all of the marketing, advertising, and promotion to get the customers and make the sale.
When it comes time to actually send out the product and fulfill it, this is where the drop shipper takes over. The drop-ship company has the inventory in its warehouse. You send your dropshipper the orders that come in, paying the wholesale price for each order.
This can be done by email, submitted online, or through a spreadsheet file—it depends on the drop shipper. In many cases, this process can be fully automated taking you out of the equation and saving you time so you can focus more on the marketing of your business and less on the operations of your business.
The dropshipping company puts the order together and ships it directly to your customer, without including any pricing details or information about the supplier, so that the customer thinks the package came directly from you.
Drop-ship companies do charge a fee for this service. Each company is different, but usually, it’s about $2 to $5 per item or order and is often called a handling fee or a dropship fee. That’s on top of the wholesale price for the product itself and the cost of shipping, which does add up.
However, you can still make a profit as a drop shipping business, despite the thinner margins. If you want to increase your profits you can raise your prices—at least as much as your market will bear. You can also sell more volume. And you can always contact your drop shipper to negotiate a lower handling fee.
Another strategy is you can do what’s referred to as white labeling or private labeling the products you sell, meaning you put your own name or brand on them so that you can distinguish yourself from all the competitors selling the exact same thing. This allows you to avoid competing just on price.
Challenges Associated With Dropshipping
1- Higher Potential Competition
Because it’s really easy to get started, there’s a lot higher potential for competition. That’s why you’ll find a lot of advice out there that recommends you start off with finding a niche audience like cat lovers, or gamers. So you can operate with less competition.
2- Supplier Errors
There are supplier errors. Though uncommon, it is inevitable that a supplier will mistakenly ship the wrong product to your customer. If this happens, don’t take it personally and handle the return like a professional either order a brand new product from the supplier or offer a complete refund.
3- Shipping Times Usually Longer
Also, since many drop shipping suppliers are based in China, shipping times are generally longer, turning some customers off. ePacket it makes it easier, delivering some orders in as little as two weeks. But generally speaking, if you make your shipping times clear throughout the buying process, many visitors appreciate the clarity, especially if you’re selling an item in a niche where delivery times are a little less crucial.
Harnessing the resources of the internet
The internet has forever changed the way business is done. You no longer have to do a lot of things manually. There is no need to rent a physical space for your business. As a dropshipper, all that you need is a very attractive and professional designed online store.
When customers order goods from your store, you simply forward their requests to your supplier who will handle all the shipping arrangements. There are thousands of people that make money by dropshipping on online marketplaces such as eBay.
Opening an online store is a very economical way of doing business. A lot of online entrepreneurs have taken advantage of the big discounts and free shipping offered by dropshippers to make money by dropshipping.
You do not need a lot of money to start this type of business. You will also gain a lot of experience about how business is done in the online market when you work with drop shippers. They are experienced professionals who understand how the system works.
Get The Right Suppliers
To be successful with dropshipping, you need reliable partners with proven reputation. If you entrust your business to strangers that have no references, you might be throwing away your money.
In this business, you will be dealing with products that you will not actually get hold of. This is why getting a trustworthy wholesaler is very important. The sellers (dropshippers) hold the products in their warehouses until you get orders from your customers.
Once you give them the details of the orders that you have, they are responsible for ensuring that the buyers receive their goods. If the buyers do not receive the goods, it is your name that is at stake. Don’t make the mistake of trusting just any dropshipping site. Do your homework; research and find out everything you can about your options. Visit websites that compile and rank dropshipping suppliers to make your decision process more manageable. Not only will you be able to compare and contrast dropshipping service offerings, but you will also be able to read reviews from real users.
Conduct Diligent Research
Before you choose to do dropshipping online, you have to take some time to conduct research. Find out the reliable companies that provide dropshipping services. You should also find out the types of items that sell quickly.
If you want to sell to international customers, you have to choose products such as clothes, tableware, toys and so on. These items rarely have warranty problems. Items such as cell phones and other electronics products are not ideal for international markets because of warranty issues.
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Before you start to make money by dropshipping, make sure you have a professional website. You need to hire SEO services that will help to make your website popular on the internet so that you can start getting a lot of visitors. SEO services will also ensure that your website is prominent in major search results.
Finally
An online drop shipping business is a quick, easy, and low-risk way to start selling online. You won’t have to put up a bunch of money upfront on inventory that might not sell, your drop shipping partner will handle all deliveries to your customers.
Pick the right niche market and product, and you could have a profitable venture on your hands. You could even expand into other niches and sell other products, too.