How To Make Money With An Online Drop Shipping Business

When starting an online business, one of the key elements is having products to sell. So how do you get products, where do you find them, how do you know if they will sell, and how do you get them to customers?

In the vast world of Internet entrepreneurship, there are many answers to all those questions. You could create your own products, but that can be a long and slow process. Or you can buy in bulk from a manufacturer and then ship products to your customers as they shop. But that's an expensive solution, and you have to risk investing that money into buying stocks, storing inventory, and not having sales, which can be particularly troublesome if you're dealing with perishable goods for fashion items.

There is a solution that allows you to avoid all those hassles. and it makes the whole process of starting your online business so much easier. It's called drop shipping. and it has taken the online business world by storm. A direct purchasing business is one of the fastest, easiest, and lowest-risk ways to start an online business.

Take a look at how to start a drop shipping business, how the drop shipping business model works, and the key things to know before you get into it.

The table below can help you with your decision-making process, and provides an overview of the pros and cons of starting your own drop shipping business.

advantage

Sell almost any product, in any niche

Use a proven business model, which is even used by large retailers like Amazon

No need to store any inventory

No need to pack or ship products

No start-up capital required

disadvantages

Expensive profit-consuming drop shipping or handling costs

Not all companies are willing to jump ship

Shippers must give you accurate inventory numbers so you don't sell items if the shipper runs out of stock

Some direct delivery providers have inconsistent service, slow shipping times, or difficult return policies

Start a drop shipping business

Estimates vary, but industry observers have found that 20 to 30 percent of online retailers use drop shipping. therefore, it is a proven business model, and you will be in good company if you follow this path. Even large retailers like Amazon use drop shipping.

With drop shipping, you can sell almost any product in any niche. Considering that almost any product can be purchased on amazon.com, if it's for sale on amazon then you can probably sell it with your own drop shipping business as well.

The benefit of direct shipping of someone else's products means you don't have to deal with the hassles of traditional businesses like:

Store your products (it can be very expensive to buy large amounts of inventory and rent warehouse space)

Packing or shipping products, preparing orders and packing them several times a day and heading to the post office

Having to deposit your money up front to buy wholesale products to resell, which you are not sure to sell

When you run a business using drop shipping, you avoid those problems and the possible loss of any initial capital investment.

In addition to all of the above benefits, you don't have to worry about building or leasing commercial spaces, hiring employees and having a large payroll, or having to be stuck in a physical location during normal business hours.

Now that you've had a look at the benefits of a drop shipping business, here's how the drop shipping business model works.

How drop shipping works

With drop shipping, you work with a wholesaler or distributor who offers this service. Not all manufacturers and wholesalers offer drop shipping, but many do.

You handle all the marketing of your business. This means that you set up your website with a shopping cart (or set up a virtual store on Amazon), write your blog, do social media marketing and email, and in any other way you can contact your prospects and customers. You will tell them all about the products and use your marketing and sales skills to tell them how the products will improve their lives. Essentially, you do all the marketing, advertising, and promotion to attract customers and make the sale.

When it's time to ship the product and fulfill it, this is where the sender takes over. the direct delivery company has the inventory in its warehouse. sends incoming orders to your dropshipper, paying the wholesale price for each order.

This can be done by email, sent online, or through a spreadsheet file; it depends on the sender. In many cases, this process can be fully automated, taking you out of the equation and saving you time so you can focus more on marketing your business and less on your business operations. The dropshipping company places the order and ships it directly to your customer, not including pricing details or information about the supplier, so that the customer thinks the package came directly from you.

Drop shipping companies charge a fee for this service. Every company is different, but typically it's about $ 2- $ 5 per item or order and is often called a handling fee or drop shipping fee. That adds up to the wholesale price of the product itself and the cost of shipping, which adds up.

However, you can still make a profit as a drop shipping business, despite the lower margins. If you want to increase your profits, you can increase your prices, at least as much as your market will support. You can also sell more volume. and you can always contact your direct shipper to negotiate a lower handling fee.

Another strategy is that you can do what is known as white labeling or private labeling of the products that you sell, which means that you put your own name or brand on them so that you can distinguish yourself from all the competitors who sell the exact same thing. This allows you to avoid competing on price alone.

Remember, however, that you are not risking your money up front. You only pay these fees if you actually sell a product.

What products can be shipped?

As with any online business, you want to be in a market that is “hot” and where there are lots of people ready to buy the products you sell. At best, the niche you specialize in should also match one of your personal interests.

If you are passionate about a certain market or type of product, that enthusiasm will make your marketing efforts and, by extension, your business stronger. Not only that, but you will really enjoy what you are doing, which will make your job feel more enjoyable.

Fortunately, there are drop shipping companies that work with almost every market, niche, and product type. This includes baby items, yoga apparel, electronics, clothing, art, books, beauty supplies, supplements, home and garden items, and more.

A great place to look for hot niches is the big online e-commerce platforms like Amazon. and eBay. Whatever the items on the bestseller lists, it could be a great fit for a drop shipping business. But also keep an eye on the trends you see on Facebook and other social media. Also, look for the products that are featured in the news and listen to the products that your friends and family are talking about.

During the holiday season, football season, back to school and other special times of the year, related products can work very well.

A big mistake many people make when starting any type of business, including dropshipping, is that if they see other people doing it, they think that it is too competitive and that they cannot make money. Could not be farther from the truth. If you see a lot of competition, that's the sure sign of a large, healthy, and profitable market.

Keep in mind that while you can sell products that are in trend and / or in season, you will also want to make sure that you are selling products that are "perennial," meaning that there will always be demand for them and sales will be more consistent.

Picking up a direct loader

Before you start working with a shipper, do the ordering process yourself from the customer's point of view. It is important to see how easy the product is to order, how long it takes to ship, and how the sender handles any returns or issues.

Ask potential shippers how they will notify you of their stock levels for each product. If you sell an item to a customer but the sender is out of stock, this can cause you a huge dilemma and create angry customers.

This will also give you the opportunity to see the quality of the product as well. make sure the products are of the level of quality that you will be proud to offer your customers. In some cases, dropshippers will be willing to send you a complementary product for evaluation or at least sell it at your cost.

If you are in a niche and have used other similar products, you can try the product yourself. Use it, study it, and see if it delivers on its promise. Is it made of quality material or ingredients? Check the opinions of others online to see if their experience matches.

If you're not in the niche, have a friend or family member try the product. Also do your research by thoroughly checking online reviews and forums in that niche for user feedback and related Facebook groups. Knowing the product will also help you sell it, making your marketing that much more authentic and effective.

Here are some of the top operational sender and sender directories available today:

Sun wholesale

Direct dropship

World brands

Oberlo

Salehoo

You can also do a Google search for "drop shipper" or "(niche) + drop shipper" to find other dropshipping companies.

Key questions to ask a prospective drop shipping partner

Partnering with a direct carrier is a great way to start an online business with minimal risk. By not having to spend a lot of cash to buy products in bulk, you are not risking your money. You don't have to stock any inventory, and you don't have to worry about keeping up with shipping products to customers in a timely manner.

But that doesn't mean you have to hand over those important elements of your business to just anyone. working with a faulty shipping loader, and they're out there, could sink your business before it takes off.

You don't have to go into the process of finding and negotiating with a potential blind drop shipping partner. Here are some key questions that can help you determine if they are right for your business.

1- Once a customer has placed an order, how long will it take to process and ship it off-site? (remember you can also "buy them secretly" to verify this as well)

2- What shipping methods are available for products? This is especially important if they are located abroad and are shipping internationally. Do you use services like ups and fedex? Can a customer overnight an order? Do you rely solely on the United States Postal Service?

3- This is a great question: do you have a tracking system so that you and / or your customers can easily see the status of each order? This is one of the most important things customers want to do.

4- How do you handle problems like lost shipments? You don't want customers to get frustrated with problems you can't control. And keep in mind that as a seller, you are ultimately responsible for customer service. Will lost shipments cost you money?

5- Do the products you offer have guarantees? What happens if the customer is not satisfied with the product? What is the return policy? Does the sender guarantee the product? What if the product fails in some way?

6- Make sure the sender's policies match your customer service philosophy. If a customer feels that you have been taken advantage of, you cannot point to the sender and blame them, because you are the one who sold the product to the customer.

It's also a good idea to check out forums, blogs, and social media for feedback on the drop shipping business from other online entrepreneurs. Senders who have a bad reputation or have bad business practices will be exposed quickly, often in detail, so you can avoid them.

Drop shipping is one of the easiest online businesses

An online drop shipping business is a quick, easy, and low-risk way to start selling online. You won't have to spend a ton of money up front on inventory that might not sell - your drop shipping partner will handle all deliveries to your customers.

Pick the right niche and product, and you could have a profitable business on your hands. You could even expand into other niches and sell other products as well.