Although dropshipping today is a very hot topic being discussed among many retailers, and it does have many benefits, it may not be the best option for every business. However, in this chapter, we will take a closer look at some of the advantages, as well as disadvantages to being had from running an online dropshipping business.
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First, if you are just starting out in setting up an online business, and do not have much-operating capital, then this may be the best option for you to go with. The great thing about this particular type of business is that you do not need to hold vast stocks of the products that you are selling.
Instead, this is all done for you by the dropshipping supplier you have gone into partnership with. This results in you eliminating a significant cost in order for your business to be set up and to get it running.
The site you set up can be produced very quickly, and so be providing the product to those people you are targeting.
As you are getting the customers orders before you actually order the goods from the supplier, this means that you have little or no initial investment to make.
Because you are not actually holding any of the inventories yourself, then you do not need to pay either for storage facilities or having to invest in expensive merchandise which you may not in fact sell.
Setting up an online dropshipping business provides you with the chance to diversify what you are actually offering to your customers. In fact, you will only be limited by not being able to find the right dropshipper for the product or items that you wish to sell.
Although there are plenty of advantages to setting up a dropshipping business, there are many disadvantages as well.
First, as you do not own the inventory that you are selling, then you will usually find that you have no control over how the product is packaged. Also, you will not be able to include any coupons or offers into the package which can help in increasing the amount of return business you get.
Every company which offers their dropshipping services will have a different fee structure, so carry out as much in-depth research as possible.
In fact, you do not want to end up with high shipping costs, as this will only make people less reluctant to purchase their goods from you.
With dropshipping, because you are only ordering one item at the time rather than bulk amounts, then you will not expect to get the same kinds of discounts.
If you decide to sell multiple products that are supplied by multiple dropshipping companies, then you will also see a significant increase in the fees that you pay to the dropshippers, which, in turn, will need to be passed onto your customer in order for you to make a profit.
There are many suppliers who will be able to provide you with dropshipping services that you can use to integrate their products into your website.
However, you may find that you will be charged a fee for using a particular service through them, so be sure that you carry out your research thoroughly before opting for one particular dropship supplier.
One major drawback to be had from setting up a dropshipping business is that not all manufacturers allow for dropshipping. This is because they will need to employ more staff (extra costs) in order for them to process these individual orders, and could result in delays in their normal shipping and receiving system.
There are other companies who will only supply in bulk, so this means that it is impossible for smaller outlets to get custom orders provided for them for select numbers of items.
However, when dropshipping is available, certainly many small as well as internet-based businesses find that it can solve many more problems than those it may create.
It really is very easy to get your dropshipping business up and running. The main pieces of equipment that you will need are a good computer, and also a good quality internet connection.
But not only is it fairly easy to get your business up and running, you will find that there are very few barriers which will prevent you from getting started, and the cost for starting out is very low, so you should not need to invest much money up front initially.
However, below these are the steps that you will need to take in order to get your dropshipping business up and running.
1. Set yourself up an online shop, either using one of the many online shop builder programs available, or by building your own site, or setting up an account with an auction site such as eBay (if you choose to use eBay as your primary selling place, I recommend getting a good auction template that you can simply plug your information into to save time).
2. Find your wholesale supplier who has the product that is looking to sell, and who offers a dropshipping service.
3. Once you have found the company that you want to deal with, you can open an account with them.
4. Next thing you need to do is start building your site, using both content and images that the dropshipping supplier has provided, or that you have produced yourself (I recommend the latter, as it will distinguish you from other sellers who may be utilizing the same dropshipper).
5. Set up a system on your site so that you know when an order has been placed for a particular item, and so payment can be taken.
6. Pass on the details of the order directly to your dropshipping supplier. Once they receive the order, they will then bill you at the price that you have both agreed upon, and then they will arrange for the item to be dispatched. In most cases, the dropshipping supplier will provide labels which refer to the business or website where the order has come from, rather than from their own business.
Probably one of the best ways of finding a reputable dropshipping supplier is through contacting the wholesalers directly, and asking if they operate a dropshipping service.
However, the other way you can find details regarding reputable dropshipping suppliers is through the internet, and this is probably much easier than having to ring round hundreds of different wholesalers.
First, the best thing you can do is search the internet using the terms “drop shipping”, “dropshipping”, “drop ship” or “dropship” and include with this the product that you are interested in. Normally by doing this, you will find the results that you get are pretty good.
Also, take a look at some of the sponsored links that you find in the results search pages that are offered up by such sites as Google and Yahoo.
These will often give you a good idea of some of the more up to date dropshippers that are around. Join a dropshipping forum, and there you will be able to chat to many like-minded people who can provide you with details and information on the best dropshippers for a product that you are particularly interested in.
Then there are dropshipping directories. These are probably the easiest way of all for finding dropshippers. However, it is important that you only use the more reputable ones such as WorldWideBrands or Drop Ship Source Directory.
Even though you may have found a good dropshipping company, one of the biggest barriers you may find is the cost.
There are some companies which will charge you a monthly membership fee costing hundreds of dollars, and there are others which require you to have a business license before you can apply for membership.
Also, there are many people around who think that dropshipping is a scam, and this is simply not true. Again, there are a few companies who are willing to exploit us, but these are in the minority rather than the majority. If you were to look closely at this subject, you will find that more than 1.1 million people around the world have been able to utilize dropshipping effectively in order to earn an income.
Also, you may be one of the lucky ones who finds a company that does not want any upfront fees in order for you to get started.
You will soon be surprised at just how many sellers there are on auction sites, such as eBay, who use dropshipping in order to earn an income.
Certainly, if you are looking for a good way of gaining experience when selling online, it is by setting up an eBay account. The great thing is that you will have millions of potential customers who may well be interested in your products. In this chapter, we look at just what you need to do in order to get your dropshipping business up and running on an auction site such as eBay.
As previously discussed in other chapters of this book, you need to find yourself a reputable and reliable wholesale company that also provides a dropshipping service. Also, choose products from the wholesale company that is not already abundantly available online.
Once you have found your wholesale company, you then need to find out about their dropshipping program, along with the fees that they charge for this service, and how they handle both the payments that you make to them and the way in which the products are shipped. Then, once you are satisfied with what they are providing, and you have got your account set up with them, now you can move on to the next stage, which is signing up to the auction site of your choice and get ready to start selling.
When you sign up to an auction site, you are now able to start selling the products you have available through their auctions. When setting up an auction item, you should ask your dropshipper to provide you with stock images that you can use, along with descriptions of the items in question.
It is important, though, that any items you are selling are placed into the correct category, and that you carry out as much research with regard to the price of them compared to what your competitors may be offering them at. It is also important that the description you provide helps it stand out from that of your competitors.
A great way of doing this is by looking at a few of the power sellers on these auction sites, what they have and how they have set them up. Also, never price your products too low at the start of the auction, as you will need to factor in fees for posting the items, as well as ensuring that you making some profit on it yourself.
Certainly, if you find that the winning bid is much lower than you expected, you can soon find yourself losing money rather than making it.
So carrying out research with regard to the product you are selling is very important before you start posting any items.
But if you want, rather than just selling the items through an auction, you can set yourself up with a store, such as an eBay store. This can certainly be more cost-effective because the fee for listing items in this way is much more affordable.
However, one disadvantage to this method is that your store may not get the same sort of exposure as an item that you have put up for auction. But if you are really clever, then you can utilize both of these methods in order to bring more customers to you.
But what is really important if you do decide to use this route for selling products from a dropshipping business, is that you provide a good customer service facility, as well as quick shipping. Soon you will find that by being able to provide a quality service, these customers will return time and again to purchase from you.
Also, eBay has a great email marketing feature, which means that you are able to email all your repeat customers who have decided to opt into your email list with just one click on the mouse.
So as you can see from above, setting up a dropshipping business using an auction site such as eBay can be very painless indeed. However, it is vital that you research your product thoroughly, as well as finding a reliable and reputable dropship supplier.
As you can see from above, setting up a dropshipping business is an excellent way to get started with an online business, and if done correctly, should not be an expensive project.
As you will soon discover, there are hundreds of companies who are willing to provide dropship products to you. Whether it is gifts of items for the home, to power tools and furniture, the choices are immense.
Certainly, dropshipping will offer you many advantages if you are only starting up an online business with very little or no capital. One of the main ones being that the product you are selling does not need to be paid for until it is actually sold, and as you are paid for it by the customer, then the outlay you make to the dropshipper supplier is nothing.
Along with not having to make any outlay to the supplier in order for the product to be sold on your site, you also do not have to worry about storage and handling costs, as this is all covered for you by the dropship supplier you are using.
Plus, by setting up a site where your goods are supplied to you by a dropship supplier, you can offer a much wider variety of items, from a number of different suppliers, and your customers will never know any different.
Unfortunately, there are some downsides to running a dropshipping business, and the main ones are that you do not have any control over the inventory management, whether the product is readily available and if the orders can be fulfilled and shipped on time to the customer who has ordered them.
But if you are still interested in setting up a dropshipping business in order to earn an extra income online, then carry out as much research as possible.
The best thing of all is that, when setting up such a business, it does not need to be expensive or time-consuming.