E-commerce and Online Business Reference

Today we are going to explore, drop shipping,  another excellent home based business opportunity.

Now, what is drop shipping you ask?

Drop shipping is a technique where distributors, wholesalers, manufacturers and/or importers sell their products through you. Basically, you create your own online storefront that sells their goods.

However unlike a traditional storefront, you wouldn’t have any inventory on hand. This is  because the other parties involved  handle the logistics.  Essentially when entering online drop shipping you enter a partnership, where the drop shipper does the dirty work.

Like with affiliate marketing your are responsible for driving the traffic and turning it into sales. Once you set up your store front all that is left is to receive and forward the orders, That, in a nutshell is how drop shipping works.

With that said, let’s talk about pros.

Pros:

As you do not handle inventory and there would be no stock carrying expenses to worry about.
There is no need to invest money to buy the product because you only pay after you get paid by the client who bought it.
There is no quota as to how many products you must sell. It doesn’t matter if you sell just one item each time.
Your drop shipper would be the one to handle all the necessary specifications and images that you would need. This way, you won’t have to spend time and money on making your own.
You get to put your own selling price on the product which is extremely convenient if you have extensive knowledge of your niche market.
You are not limited to working with just one supplier. You can open a web store that offers various products from multiple drop shippers.

To start a drop shipping operation the first thing you need to do is find the products you want to sell and the drop shippers who can supply you with them.

Some of the most popular items include books, shoes, clothing, toys, music, movies, accessories, bed and bath items as well as video games. Of course this is by no means a complete list. Just like with affiliate marketing, we strongly recommend that you look into products that you have a passion for.

Of course, drop shipping does have its own set of drawbacks such as lack of control of inventory levels, discontinued products and turnaround time.

Fortunately most of drawbacks can be limited with the use of a reputable drop shipping service.

Some thing that determine the reputation of a drop shipping service include:

Their readiness and willingness to ship one item at a time.
Free membership
Should be reputable and has had experience in the business.
Is okay with using your name or your shop’s name as the shipper.
Is willing to enclose an invoice from you.
There should be no indication on their packaging that points to them as the drop shipper.
Is willing to accommodate other specifications from you.

One of the most reputable drop shipping partners is www.doba.com. Doba has a solid reputation and is on the forefront of drop shipping.

Using their website you would be able to set up your very own store front with ease as well as immediately get connected to merchants. All that’s left for you to do is drive the traffic.

Still, like with every other business opportunity, the more research you put in the better.

Unless the internet up and vanishes, E-commerce is here to stay in Canada and the world. The reasons why an online presence is vital to your existence as a retail business is simple.

Canadians are shopping online. Proof: Statistics Canada estimated that Canadians used the Internet in 2009 to place orders for goods and services valued at .1 billion, up from .8 billion in 2007. The increase resulted from more online shoppers and a higher volume of orders. In 2009, about 39% of Canadians aged 16 and over used the Internet to place more than 95 million orders. This was up from 32% and the 70 million orders placed in 2007, when the survey was last conducted.

Bigger retail stores buy their products online. So if you are a smaller business hoping to get your products into a bigger store, you need an online presence. Nowadays, you cannot walk into a store to showcase your product to the manager without them asking you for the web address of your online store.

The Benefits of E-Commerce To Your Business:

You can sell to more customers. You do not necessarily have to shut your doors to the walk-in customers, but by having an online store you can begin to reach out to potential customers that do not even live in the same zip code.

You can sell more types of products. E-commerce allows you to sell digital products and physical products. So if you are already selling physical goods, you may decide to branch out and begin selling an e-book or MP3s or digital instruction manuals.

The opportunity for expansion is unlimited. The number of people buying on the internet is growing every year quickly and without an online store you are missing out on a huge sectore of consumers.

Your competition has an online store. The fact is that if you want your business to stay alive, you need to stay competitive.

It is easier to get started than you think. Many business owners are simply scared of technology and believe that they cannot learn to use it. In the early days of the internet, you had to be a computer whiz to have your own online store, but nowadays shopping cart software is simple to install and simple to use.

It is inexpensive to get started. You can buy online store software that will have all the functions you need for around 50$ .

Drop ship businesses provide the service of shipping merchandise from a supplier directly to a retailer’s customer. Which means, you as the retailer, can ship to your customers directly from the suppliers’ ware-house. This service minimizes the risk of a business owner because you do not need to buy an inventory and stockpile it beforehand. Suppliers take care of the warehousing, packaging, and shipping, providing a financial savings over the course of time.

Drop ship businesses provide even more benefits. As a merchant you are not required to invest larges sums of money in inventory. The opportunity to start the business with little risk is quite attractive. The expense of having to buy packaging materials and shipping labels is done away with and there is no need to handle any product returns.

Also, the ability to select and purchase products at wholesale prices while establishing your own profit margin is essential to the future of your business.

The Drop ship businesses selling process explained:

Select products you’d like to sell from the suppliers Product Catalog.

List those products on your web site or auction

After the product sells collect your money from the buyer.

Place the product order through your supplier/shipper after you’ve been paid.

The difference between what you charged and the cost of the item is your profit margin.

The product is shipped directly to your customer by the manufacturer.

Often times it is said by online retailers, eBay sellers, online auction gurus, and others: “You can’t make any real money with drop shipping. The prices and fees that drop-ship suppliers charge eliminate your profit margins.”

If that is true, why then are there thousands of retailers (including Sam’s Club, Costco, and Amazon) who sell millions of dollars of merchandise every month and make a handsome profit doing it. For them, a drop ship product source increases their profit margins by slashing the amount of time and money they have to spend on managing inventory and packing and shipping products themselves.

The business scenario for determining whether Drop ship businesses are beneficial or viable options for your business must be viewed from a cost benefit analysis standpoint.

Exploring the cost benefit analysis of Drop ship businesses:

If you are contemplating a start-up business or are operating an established one,

Drop ship businesses offer several benefits:

Setup fees are minimal.

The supplier maintains and manages inventory.

Your supplier packs and ships products directly to your customers.

Only pay your supplier after your customer pays you, guaranteeing profit.

Able to perform market research of products with little or no risk.

Without the need to stock/Inventory items, the freedom to focus on marketing, advertising, and cost effectiveness becomes the mainstay of the business operater.

With Drop ship businesses, you are able to boost profits, cut costs, increase sales, save time, and reduce risk, all with less manpower.

There are various types of Internet businesses that an Internet business newbie or aspiring online entrepreneur could choose from. Generally, online or e-businesses are relatively cheaper to set up & easier to run than their offline counterparts, but they’re arguably more competitive. To succeed in the world of online business, an e-business newbie must be passionate about the business, must have a good knowledge of the business and must possess a good deal of communication & marketing skills. The early days of new Internet businesses are usually the toughest & most discouraging, and during these times, it’s only passion that keeps the newbie from throwing in the towel. Of course, it would be foolish to jump into what you know absolutely nothing about. Doing a lot of research & planning is, thus, absolutely crucial to the ultimate success of any online venture. Most importantly, if you cannot communicate adequately and promote your products or services, then don’t even bother starting an Internet business because the competition will just put you out of business.

Types of online or e-businesses include the following:

1. Corporate Websites – these are not actually e-businesses in the real sense of the word. They are, rather, online representations of established offline businesses. These established “physical” corporations use their websites to maintain an online presence through which they market their products or services to a much broader audience. They can also use this medium to transact business with clients who, otherwise, would have been impossible to reach out to, hence increasing their customer base.

2. Informational Sites – this type of Internet business includes online encyclopedias, online news, e-magazines, blogs, forums, specialized websites, etc. These e-businesses monetize their sites by paid subscriptions, placement of contextual ads like Google AdSense, promotion of affiliate products, or even selling ad spaces on their sites directly to advertisers. Of all these, I believe blogs are probably the easiest and most inexpensive to set up and run, hence I advocate blogging for any Internet business newbie or aspiring online entrepreneur with little or no start-up capital.

3. Web Services – this type of online business include email services, search engines, social networking sites, chat rooms, bulk SMS service, web hosting, graphic design, web design, Internet marketing, translation services, market research, online payment services, directories, online market place, software development, etc.

4. Online Shops – just as the name implies, this type of Internet business entails displaying and selling of ones own products in a shop, except in this case both product display and transactions are carried out online. Delivery of the sold “physical” products, however, is done offline, well except for some digital products like software, e-books, music, videos, games, etc, that are downloadable directly to the buyers computer, PDA, phone, etc. Note that in this type of business, the shop owner must actually own the “physical” products on sale, not necessarily being the manufacturer, but has at least acquired the products and have them in stock ready for delivery to any buyer. Hence, it could also be an already established offline shop looking to expand its customer base online.

5. Affiliate Shops – the difference between this type of online business and online shops as described above is that with affiliate shops, the shop owner doesn’t have to own or have in stock any of the “physical” products on sale. It is also not the responsibility of the affiliate shop owner to deliver any sold product to its end buyer. All the affiliate shop owner does is to market and sell products owned by other individuals or companies.

6. Online Trading – this includes forex trading, stock trading, options, futures, precious stones, crude oil, real estate, e-minis, etc.

Now, of all these various types of Internet businesses, some are easy to setup while others are less so, some are also easy to run while others, not so and some are relatively less expensive than others. For a new Internet business owner or aspiring online entrepreneur, I advocate blogging and/or affiliate marketing because they are relatively easier to set up and run, and also very inexpensive. For instance, you could start a money-making blog with NO CAPITAL at all, provided you have access to a computer linked to the Internet.

Well all I can say at this point is good luck with your chosen type of Internet business.

It takes a lot of dedication to have a good business and sell online. Selecting a good ecommerce software package is just but one of the many steps needed to make the process of getting an online company on its feet. Other steps involved in every ecommerce site which wants to be a success story when it comes to sell online include:

• Selecting and registering a web domain.

• Selecting a reliable web hosting company.

• Designing the actual website you will use to market and sell online products.

• Deciding on the appropriate shopping cart ecommerce software – there are several out there, you just have to get a cart provider that meets your needs.

• Establish a payment gateway.

• Organizing a portal for credit card processing.

• Setting up a merchant account.

• Marketing – This has a lot of impact on how much success you will make online. Getting to make your products known in the market. This can be done by starting an affiliate program.

Prior to making a single sale online, all the above steps need to be taken into consideration in order to make the ecommerce software you selected to start generating cash for you without having any glitches. There are reported cases where people are unable to sell online until they try software products from a couple of vendors.

Fortunately, this doesn’t have to happen to you too. There are ecommerce services that take up the responsibility of doing all the above steps for you; especially the tricky bit of getting you a shopping cart ecommerce software that will be compatible with your website. Over and above that, they can improve your chances of selling online by availing powerful marketing avenues such as search engine optimization, advertising your website on social networking sites which will guarantee your product to sell online. All the above combined are referred to as the power of ecommerce software.

With a myriad of ecommerce solutions online, you can use online reviews to assess which one in particular is suitable for you. However, below are some pointers that you can use to determine the suitability of ecommerce software.

How to Know That a Particular Ecommerce Service Will Help You Sell Online

These are known criteria used by top reviewers on the internet.

Ease of Setup

To establish your online business, the ecommerce service should be in a position to illustrate what you need to do and also how to get it done. If the company you are dealing with does not give you all the tools you need in coming up with your ecommerce site, you should ask them to give you a list of compatible tools that will work with your site instead of having to use the trial and error option.

Feature Set

This has to do with the ecommerce software or tools that come with the package from the ecommerce service in order to get your online business up and running. Typically, we look at features the service avails to clients, for instance: site creation, report generation, payment options and shopping carts et cetera.

Ease of Use

Since a website is a perpetual work in progress, it should be easy to update as well as generate reports from, which are easily customizable to give you particular information that you wish to get in the shortest time possible. Essentially, a suitable ecommerce service should be creative while still maintaining ease of use.

Fraud Protection

Your hosting website should be in a position to offer you a secure server over which your clients can safely reveal their credit card information while making an online purchase. The most sensitive part when it comes to showing credit card information is the CVV2 code which is usually a 3-digit figure printed on the back of most credit and debit cards. As a merchant you should always look for ecommerce software that enables you to offer the best fraud protection available in the market.

Help/Documentation

Ideal companies should give you ongoing help and support especially when dealing with such a dynamic field – the internet. Better and newer internet solutions are generated frequently and therefore you must be able to keep up with the trends. Support and help can be in the form of periodic downloads, live chats, telephone operators, wikis, forums or even blogs.

The above pointers regarding how to select ecommerce software should get you to sell online in the shortest time possible.

Business sites such as eBay and Amazon, to Multiply and other free hosted sites- online businesses have gradually gained popularity due to their convenience for both owners and buyers. If you are interested in starting a business, this online way provides the perfect strategy.

There is no limitation as to what types of businesses can be offered online. Whether you plan to offer services or products, marketing them online, while still difficult, allows you to reap the benefits of saving significantly on promotional costs.

You will find that, as with any business offline or online, you still have to decide the basics such as:

i) what type of business you plan to build,

ii) what service or product you plan to offer to your potential clients.

Off course, the key benefits of being a business owner are that you get to make the critical decisions, decide your own working hours and are truly the master of your own fate, well “to some degree”!

I say “to some degree” since as you will soon realize, when and if you become a business owner, online or offline, you still have to be prepared to be of service to your clients as much as 24/7.

Online Service-type business

Dominating the online business industry is the service sector. This is due to the fact that it provides convenience of access for both domestic and international markets and, if done right, can showcase a modern and innovated approach. This can promote your entire gamut of services and will also function to give you a unique status in your field.

For examples of some online service-type business ideas that are relatively easy to set up and can take on the nature of permanence, see below:

· Online translation services

· Web development

· Online newsletter

· Internet dating site

· Resume writer

· Online reviewer

Online Product-type business

While the fact that this type of business has tangible products and which are visible makes it easier to market such products, they will generally need the added support of an offline marketing effort.

Even though this may be the case, you are still looking at businesses which are relatively easy to set up and, you will have endless creative publicity possibilities. Here are a few examples of online product businesses:

· Online boutique

· Online jeweller

· Online Car rental service