Many people dream of starting a retail business, what if I told you that you can start an online business today just by following the information in this article. Better yet what if I told the cost of starting this business is super low, and you don’t have to purchase any inventory to get started. This sounds exciting, well this business model is called drop shipping. Drop Shipping is one of the easiest ways to make money online selling on eBay, Amazon or your own website via Shopify.
What Is Drop Shipping?
Drop shipping is an online business method where you do not store any inventory, instead you partner with a wholesale dropship supplier. You list their inventory on various websites such as Amazon, eBay, Bonanza, or your own site via Shopify.
All the inventory you list is at a marked up price, once you receive payment you then forward the shipping information to the supplier, who then ships the item to your customer and you keep the difference in your PayPal or bank account as profit.
4 reasons why you should consider drop shipping:
1. Lowest start up cost of any business model: Drop shipping is one of the easiest business to start because you don’t have fork out thousands of dollars for inventory. Instead, you partner with a supplier and offer thousands of their products to your customers.
2. Easy to learn and it works: When launching a new business it takes a lot of work, and most of that work is deciding what inventory to spend your hard earn money on. Not to mention you would need to develop a system of organization to keep track of your items.
When starting a drop shipping store, you need not worry about how much to spend on inventory because you’re able to list thousands of items on your website. Many suppliers have data feeds that make this process super easy. You can even have a store created for you for super cheap. Companies like Wholesale2b not only offer a list of dropship suppliers, but they can also create you a store for about the amount you would pay for a night out at the movies.
3. Work from anywhere: With all the packaging and shipping handled by your dropship supplier, you’re free to operate your business wherever you have an internet connection. Most drop ship business owners love this because a good majority of your business can be ran while on vacation, traveling or while working at your current job.
4. Drop shipping works: At this point you may be thinking, is dropshipping a scam? The answer is no. Many big name retail stores such as Walmart, Sears, Best Buy and even Target all use drop shipping. These stores provide a variety of products without the hassle of storing additional inventory or worrying about fulfillment
How To Search For Drop Ship Suppliers?
Before you get started you want to make sure you got all the right documents and legal stuff in order. Most quality wholesale supplier will want at least a EIN number, your sales tax id, or both.
There are many ways to find dropshipping suppliers, my video below will show you one of those ways.
If you’re pretty confident on the items you want to sell you can always contact the manufacture of that item if they are not willing to dropship. They will almost always be willing to send you a list of wholesaler or retailers who carry their items.
You can also find supplier via Google. If you’re going to use google to find suppliers keep the below 3 tips in mind.
How Find Wholesale Suppliers using Google.
1. Search Google nose bleed seats: Retail dropship suppliers are horrible at SEO they only exist to supply business with their items. So you will need to search deep into Google. Most wholesalers will not pop up on the first page of a search. It’s not uncommon to find a verified dropship supplier on the 30th or 40th page of a search result.
2. Old ugly looking web sites: Wholesale suppliers tend to have horrific looking and outdated old school styled websites. While a supplier site that has all the fancy flash animations and responsive theme may look nice and enjoyable to navigate. Keep in mind not to discount the suppliers site you come across that looks a hot mess, often those sites offer the best pricing and service.
3. Use different search terms: When you’re searching for your supplier make sure you don’t limit yourself to a search like “drop ship supplier” you want to change it up with words like wholesale supplier, manufacturer, drop ship wholesale suppliers, merchant supplier and any other words that describe your niche.
Shipping Issues & Drop Ship Problems, 4 Tips On How To Solve Them.
Drop shipping is an amazing business model, however, it does not come without its cons. Shipping problems will arise in everyone’s online retail business at some point. Learning how to navigate through these rocky situations is often what makes or breaks a beginner drop shipper.
1. Low Profits and the competition is fierce.
Solution: Dropshipping is very competitive and it can lead to some deep price cutting by your competitors, which in turn result in lower profits for those selling in the niche who wish to compete.
To be successful on running a dropship business, you can’t always compete on price. Some of the most successful Shopify owners who drop ship found a way to add value to their store, Though top notch product education, amazing service or unique product selection. For additional information on how to compete and add value to your dropshipping stores check out these articles.
2. Out of stock items and updating inventory can be a problem.
Solution: The best way to navigate this issue is to not put all your eggs in one basket. Make sure you have at least two suppliers for your drop ship store. This way if one supplier is out of stock you can easily order from your backup supplier. Keep in mind that all supplier will not have every single item the other has however you should be able to find 2 or 3 suppliers who have pretty much the same stock. One of the issues that will happen is selling an out of stock item. Some suppliers are better than others and keeping inventory files updated. So it’s best to always have a group of trusted suppliers for you store.
3. Selling item you have never seen or have limited knowledge of.
Solution: it’s 2015 people, you can become an expert in just about anything. Becoming proficient in a new drop shipping product line is no different. When you start making sales of your product you will become very familiar with frequently asked questions regarding your items. Also, if you ever need help answering a question a quick call to the supplier or manufacturer should get you on the right path.
4. Involving a third party will result in more fulfillment errors, mistakes, and logistical problems.
Solution: You can have the best system and strategy for running your dropshipping business and even then some of the best suppliers will at some point have a mistake or fulfillment issue.
Whenever this happens you need to just chop this up as the cost of doing business. Regardless of what happens you still have to take full responsibility for the issues because your the reseller. Most suppliers are understanding of a fulfillment issue on their end and will make right some issues. However, it is not wise to point fingers at your supplier or debate with your supplier on paying return shipping charges or paying to ship out additional items. Its best to just swallow the cost and keep business moving so the buyer can get a solution to their problem as soon as possible.
The conclusion on dropshipping
Is dropshipping a lottery ticket to overnight success? Of course, it is not, but it does provide a great solution to starting a real business without investing thousands in start-up cost.
The low investment is exactly why many entrepreneurs love the dropshipping business model. Dropshipping is low risk with a very high reward. Start your dropshipping business now with this Shopify 14-day free trial.