Last Updated on August 18, 2020
How to make money with a dropshipping business online?
One of the main components when beginning an online business is getting products to be sold. So how do you get products, where are you going to discover them, how do you understand if they’re going to sell them, and how do you get them to clients?
There are many responses to all these issues in the vast globe of internet entrepreneurship. You could create your own products— but that can be a long process that takes time. Or you might purchase from a supplier in bulk and then ship products as they purchase to your clients. But that’s a costly option, and you’ve got to take the risk of spending that cash in purchasing stock, storing inventory, and not having sales, which can be particularly troubling if you’re dealing with trendy products with perishable products.
There is a solution that enables you to avoid all these difficulties. And it makes the entire start-up process much easier for your internet enterprise. And it took the world of online business by storm. One of the fastest, simplest, and lowest-risk ways to get started with an online business is a drop shipping company.
Look at how to start a drop shipping company, how the business model of drop shipping works, and what important stuff you should understand before you go into it.
The following table can assist you with your decision-making method and gives an overview of the benefits and disadvantages of starting your own shipping company.
- Selling nearly any products in any niche
- Use a proven business model that is even used by big distributors like Amazon
- No need to store any inventory
- No need to pack or ship products
- No need for upfront capital
- Expensive handling or drop-ship fees that eat up profits
- Not all companies are willing to drop ship
- Drop shippers must give you accurate stock numbers so that you do not sell items if the drop shipper goes out of stock on them
- Some drop-ship suppliers have inconsistent service, slow ship times or difficult return policies
Starting a drop shipping business
Estimates differ, but industry watchers discovered that online retailers use drop shipping from 20 percent to 30 percent. So it’s a proven business model, and if you take this path, you’ll be in excellent company. Even large distributors such as Amazon are using drop shipping.
You can sell almost any item in any niche with drop shipping. Considering that on Amazon.com you can buy just about any item-if it’s for sale on Amazon you can likely sell it with your own shipping company.
The advantage of shipping someone else’s products means you don’t have to cope with the troubles of traditional companies, such as: storing your products (it can be very costly to purchase huge quantities of inventory and lease warehouse space) packaging or shipping goods, preparing orders and boxing them up numerous times a day and going to the post office with your cash down.
Besides all the above benefits, you don’t have to worry about constructing or leasing company room, employing staff and having a big payroll, or being stuck in a physical place during ordinary business hours.
Now that you have looked at the advantages of a drop shipping company, this is how the drop shipping company model operates.
How Drop Shipping Works
You work with a wholesaler or distributor offering this service with drop shipping. Not all producers and wholesalers, but many do, give drop shipping.
You manage all your business marketing. This implies setting up a shopping cart on your website (or setting up a virtual storefront on Amazon), writing your blog, doing social media and email marketing, and any other way you can contact your prospects and clients.
You are going to inform them all about the products and use your marketing and selling abilities to inform them how the products are going to improve their life. Essentially, to get the clients and make the sale, you do all the marketing, advertising and promotion.
The drop shipper takes over when it comes to actually sending out the item and fulfilling it. The drop-ship business has its warehouse inventory. You send the orders that come in to your dropshipper, paying for each order the wholesale price.
This can be done through email, online submission, or a spreadsheet file— it depends on the drop shipper. This process can be fully automated in many instances to take you out of the equation and save you time so you can concentrate more on your business marketing and less on your company activities.
The dropshipping company puts together the order and ships it directly to your customer, without including any pricing details or supplier information, so the customer thinks that the package came from you directly.
For this service, drop-ship companies charge a fee. Every business is distinct, but it is generally about $2 to $5 per product or order and is often referred to as a processing fee or dropship fee. That’s in addition to the product itself wholesale price and shipping cost, which adds up.
However, despite the thinner margins, you can still create a profit as a drop shipping company. You can raise your prices if you want to boost your profits — at least as much as your industry is going to bear. You can sell more quantity as well. And to negotiate a lower handling fee, you can always contact your drop shipper.
Another approach is to do white labeling or personal labeling of the products you sell, which means you put your own name or brand on them so you can differentiate yourself from all the rivals selling the precise same thing. This enables you not to compete on the cost alone.
Remember, however, that you are not up front risking your cash. You pay these fees only if you sell a product.
What products are dropshipped?
As with any online business, you want to be in a “hot” market where the products you sell are ready for purchase by a large number of people. The niche you are specializing in should also match one of your private interests in the best-case situation.
If you’re passionate about a particular market or product type, that enthusiasm will make your marketing efforts stronger, and by expanding your business. Not only that, but you’re actually going to enjoy what you’re doing, making your work more enjoyable.
Luckily, drop shipping businesses are working with just about every industry, niche, and product type. This includes baby items, yoga clothing, electronics, clothing, art, books, beauty supplies, supplements, items from home and garden, and more.
Large online e-commerce platforms like Amazon are a great place to check for hot niches. And there’s eBay. Whatever items are on the bestseller lists, the fit for a drop shipping business could be great. But keep an eye on trends that you see on Facebook and other social networks as well. Also, look for news products and listen to the items you’re talking about from your friends and family.
Related products can do very well during the holiday season, soccer season, back-to-school and other unique times of the year.
A big mistake many people make when they start any kind of business, including dropshipping, is that when they see other people doing it they think it’s too competitive and they can’t make any cash in it. There could be nothing beyond the truth. If you see a lot of competition, this is a sure indication of a large, healthy and lucrative market.
Keep in mind that while you can sell trendy and/or seasonal goods, you will also want to make sure that you sell “evergreen” goods, which means they will always be in demand and sales will be more coherent.
Choosing a drop shipper
Before you begin working with a drop shipper, go through the order process from the point of perspective of a customer. How simple it is to order the item, how long it requires to ship, and how the drop shipper handles any returns or issues is essential to see.
Ask potential drop shippers how they will notify each product of their stock levels. If you sell an item to a client but the drop shipper is out of stock, it can cause you an enormous dilemma and generate angry clients.
This will also offer you the opportunity to see the product’s value as well. Make sure that the products are at the quality level that your clients will be proud to give. Dropshippers are prepared to give you a complimentary item for assessment in some instances or at least sell it to you at their expense.
You can test the product yourself if you are in a niche and have used other comparable products. Use it, research it, and see if the promise is being made. Is it produced of material or ingredients of quality? Check others ‘ feedback online to see if they match your experience.
If you are not in the niche, attempt the item with a friend or family member. Do your studies as well by scrutinizing carefully internet reviews and forums in that niche to see any user remarks and any associated Facebook groups. Knowing the item will also assist you sell it, making it much more authentic and efficient in your marketing.
Here are some of today’s top drop shippers and drop shipper directories:
- Sunshine Wholesale
- Dropship Direct
- Worldwide Brands
To find other dropshipping companies, you can also do a Google search for “drop shipper” or “(niche) + drop shipper.”