Looking to start your own drop shipping business, here is the complete guide that helps you to know the secrets and get succeed.
Drop shipping -What is really about it
Dropship is the kind of retail business, where retailer (you) need not to keep the products in your own store location but to pass the orders to the dropshipper(who actually holding the product in their store) to your customer. That means, you need not to pay the product in advance, keeping it in your store and waiting for getting order from the customer, but you will just instruct the dropshipper to ship the product to your customer as soon as you have got order.
Simply saying you are going to act as a middle man between the whole sale supplier and customer and you are taking away the margin as your profit.
For Example ( All the price information are guessed, not real)
The whole sale price of the laptop will be 500 USD but the end market retail price will be 620 USD
You are paying
500 – For Whole sale price
20 USD- For shipping
20 USD- For payment transaction fees
Total expenses: 540
Net Margin: 80 USD/unit
If you are selling 20 units’ means, you will gain 1600 USD (20*80) as your margin.
You can increase your margins by exploring more products and retailing it.
How Drop shipping got works -Quick Look
Still confusing? Here is the visual help for you! Have a look at the below image will shows “How dropship business works”
Photo : How Drop shipping Business Works Flow char Diagram
Step 1 : Showcasing products to sell
You are displaying the prospective products on your website or with the third party marketplaces like Amazon, ebay, Etsy or any other network
Step 2: Customer pays for the product
Customer finds the products with the website and makes order with their preferred payment method.
Step 3: Forwarding the orders to Dropshippers
You receive the orders from your customers and forwarding this order to your drop shipper.
Step 4 : Dropshipper shipping the goods to customer
After paying the dropshipper for the product, they will ship the order directly to the customer premises on behalf of you (You can also chooses to receive the product in your location and reship the product the customer location by yourself)
Dropship Advantages- Why should you offer this?
No prior payments required- Yes. you need to pay for the products in advance which you are going to sell. You can transfer the money to the dropshipper after you receiving the product from your customer.
No website is required- you no need to start the website on your own and pay for the hosting, you can simply promote your products with the established markets like Amazon,Ebay,Etsy and even with your regional markets.
No technical knowledge is required – You no need to be a experienced person to handle the shipping and handling requests, the suppliers will take care of the process.
Dropship Pitfalls – Should be avoided
Selecting products with highest competition- marketing the products online became more competitive every day, selecting the product which has the more competitive will ends with low or No sales. Most of the beginners of drop shipping are looking for competitive products niche like electronics which has the both the higher demand and the highest competition.
Losing money with the fake suppliers- Most of the entry level drop shippers fell into this trap, they end up with thier investment loss or poor quality products supply.
Purchasing the products at higher price -This will be another sad part of the story. some times the wholesale price from the particular supplier will be more costlier than the retail price. The reasons will be the supplier may not be the root supplier, they may re-supplier or sub dealer.
Start-up Resources – Quick check list
Here is the quick checklist of items will be required to start the dropship business.
Product Information – Complete product information includes technical specifications, attributes (color,size,Age),title,description,images and videos of the product.
Supplier Info- Before begin, you have to calculate the approximate shipping cost of the material to the customer location, shipping methods ,delivery timing .you have to plan accordingly when you list your items.
For E.g
If the particular product is shipped from USA to Asian country then it may takes more time than delivering within USA. The shipping cost will be changes according to the type, weight, shipment region of the product.
Easy contact methods
As much as possible you have to setup the easy contact methods, so that customer can reach you when they have pre or post sales questions.
Provide the correct e-mail address, telephone number with country code and supply the other communication medium like skype or toll free telephone number(if any).
Marketplace Account
A valid registered account required for listing the product with the marketplace like Amazon, EBay and Etsy. With this account only you can reach the millions easily to the millions of potentials customers to buy.
Receiving payments
Most of the marketplace portals pay you by check, Wire transfer, Paypal, Moneybookers or with any other payment gateway accounts. Having the account with these services enables you for the promoted payouts delivered in-time
Hope this Drop shipping guide helps you for start your own dropship business, make a comment here for any further questions.
In theory, drop ship businesses can be easily set up and are very profitable. You can run your own business from home, with no equipment and little to no outlay. You don’t even need a website if you use something like eBay or Amazon Marketplace. You need to find the right product, in the right sector, and the right angle and anyone can do it.