Drop shipping is like any business and the most important thing when starting out on any venture is to do your market research FIRST… Not only are there billions of web pages out there that could be selling competitive products, the net changes so fast that you are obsolete as soon as you have gotten started.
If you are going to set up a drop shipping business you want make sure that the product that you choose can be easily sold. And you want to know how many competitors you have. And you want to stay as up to date as possible. Selling products on the Internet is easy. Hundreds of thousands of people do it every day online on auction sites such as eBay. The most difficult part of internet sales is getting the products delivered to the customer, otherwise known as order fulfillment.
You must have an efficient fulfillment system. One of the reasons that brick-and-mortar stores are so slow on the uptake when it comes to online business, is that supplying retail stores is done with pallet-sized orders usually. But internet sales requires an entirely different kind of fulfillment system. Selling on the internet is essentially mail order, with shipments going out in small parcels to end users.
Ideally a drop-shipper should be transparent. With most of your drop shippers, especially those with whom you do a regular business, you can send them labels and forms so their package looks like it is from you. Your customer probably won’t know that your hands never touched the product. The customer will think that you have a warehouse.
You will be using third party customer service so you will not have full control. Drop shipping is really outsourcing your order fulfillment services to a third party. You will be dependent on your drop shipper to have the products in stock, to deliver on time, and to properly pack and ship your products. So pick your drop shipper carefully.
At the end of the day, however, drop shipping exists because it works. And the largest catalog companies and web sites use it. And savvy small web sites and auction site sellers use it. Drop shipping is simply an arrangement between you and the manufacturer or distributor of the product you sell whereby the manufacturer or distributor — NOT YOU — ships the product to your customers.
There are a few huge advantages to this model. First, it SAVES YOU THE COST of building your own inventory. If you’re like most people starting a small business, you don’t have much capital with which to play with. The last thing you want to do is tie up your cash in inventory that you may or may not be able to sell.
Not having inventory also means no leftovers. If the product you sell suddenly becomes outdated, obsolete, or just plain un-trendy, you aren’t the one with a house full of stock that nobody will buy. Many online retailers find themselves having to offer deep discounts — and taking huge losses — on old products just to get them out of their homes to make room for more inventory! You’ll be able to ADD NEW PRODUCTS ALMOST INSTANTLY. Since you don’t have to worry about ordering inventory, you can add products to your web site within a few hours.
If learning more about the drop shipping business is an interest of yours, Worldwide Brands is an awesome place to start as they have tons of material that teaches you this awesome business, including over 20 video tutorials.
