Do you know that you can front an online store without going through the pains of capital investment and fulfilling purchase orders? Yes it is possible. You can be in any location and still run the business effectively once you are you are connected to the internet. So what kind of business are we talking here? In case you have not heard it before or you have but don’t know how it works, it is DROP SHIPPING. In this article, I will show you how you can successfully run and make money from drop shipping.
Drop Shipping: What does it mean?
Drop shipping is a retail fulfillment technique in which a store does not keep its merchandise in stock but arranges with the manufacturer or wholesaler to directly ship orders to the buyers. This method eliminates the need for you to keep inventory or physical stock of goods since you can partner with a supplier that drop ships and then list their products for sale.
Finding the right product
Drop shipping is only as profitable as the volume of products you are able to sell. How do you now find the right product to sell? There are several ways to look for ideas, but you need to carry out research to find the needs of people and the products that meet those needs. You can get ideas from your local community, social curation sites (such as Pinterest), trendy products publications, social forum communities, online consumer marketplaces, B2B wholesaler marketplaces, and so on. Your product must be one that is trendy or gets constant purchase orders depending on your niche, and one that meets your profit goal. If both satisfy your expectations, then you are good to go.
How to find reputable drop shipping suppliers
You have to thread this path of the business cautiously as there are several scammers out there. It is possible to find manufacturers with drop shipping programs, and if not consider checking wholesalers or distributors. But the lower you go down the chain, the higher the price of the product and the narrower your profit margin.
Genuine drop shipping manufacturers do not sell directly to the public nor do they publish their product pricing. Another feature of real drop shipping wholesalers is that they require formal application for partnership. So you should be on the lookout for these in your search. If you are in the US, you will be required to provide EIN number of your business and reseller’s certificate (also called resale certificate or license). That means you must have a legally registered business to start drop shipping.
Places where you can sell your products
There are several channels you can choose from to sell your products. You can sell on established third-party websites such as eBay and Amazon or sell on your personal ecommerce store. While established websites offer advantages such as easy startup, overwhelming traffic and less marketing, your profit margin gets thinner as they get commissions from successful sales, ranges between 10% and 15%, plus you are not building a brand for your business. With your own ecommerce store, you get more control over your business but you will have to work really hard on traffic.
Once you get an order on your storefront, quickly place an order from your supplier and provide the address of the buyer. They will take care of the rest while you make some profits. Even though it might start out slowly, with time and the proper strategies, especially marketing, you can become a power seller and lay the foundation for your own ecommerce store.