Drop-shipping – a great way of making
money online
Using the Internet to sell products and services to ever increasing number
of net users is a good way to start your own business.
If you are not taking advantage of this great opportunity
you are just missing the boat! Consider this: e-commerce,
contrary to popular believe, is thriving and increasing
at a double digit growth rate. According to Jupiter
Research, Online sales during this holiday season in
United States are expected to reach $21.6 billion, a
19 percent increase over the same period last year.
Jupiter also predicts in the report that 86 million
U.S. residents will make holiday purchases online this
year compared to 73 million last year, which is an 18
percent increase.
No doubt that this is the right time to get into online
business. Building a website for selling products or
services is no longer that difficult. You can make your
own website by using available sophisticated but easy-to-learn-and-use
programs like Macromedia Dreamweaver,
Microsoft Frontpage, Adobe Go live, etc. There also
exist various online web store builders similar to Rusbiz.com,
which allow you to create powerful web stores using
simple editors and numerous templates. You can also
setup a store with E-bay and sell products through it.
Finally, you can hire professional web designers to
develop your website. So, the important
question isnot how to get online, but what to sell on
the Internet?
In one of my articles – What to sell on the Internet?
(http://ezine.rusbiz.com/archivenews.html?nl_oid=19)
– I wrote about selling information products.
Although this is an interesting concept, you might think
that this is not your cup of tea; and you still prefer
to work with some tangible products. In ideal scenario,
probably, you want to sell a product of your choice
but don’t want to carry your own stock and don’t
want to handle the shipping. Is there a way of doing
this? Yes, there is! It’s called “Drop-shipping”.
What is drop-shipping?
When a manufacturer, wholesaler, distributor or importer,
after receiving an order from their
retailers, individually pack and deliver the product
to the customer of the retailer with
retailers address as shipper, this selling technique
is called drop-shipping.
The advantages of drop-shipping include:
- You do not have any inventory. So, there is no stock
carrying expense involved.
- You pay for the item only when it is sold and you
got paid from your customer. You don’t need to
invest money in buying the product.
- You can sell just one item at a time. No minimum quantity
required.
- Your drop-shipper will supply you with necessary product
image and specification. You don’t have to spend
money on creating your own.
- You fix your own selling price of the product. Convenient,
when you know your niche market well.
- You can offer various products on your web store from
multiple suppliers.
Select a product to sell
Once you decided to go with drop-shipping you need
to find products to sell and find drop-shipping suppliers
for those products. According to the same report from
Jupiter following are the most favorite categories for
online shoppers: Books – by far the most popular
category, after that comes clothing and shoes, music,
toys, video tapes and DVDs, gift certificates, consumer
electronics, accessories, videogames, bed and related
items, and bath items. You should also consider that
this year, total Internet sales of consumer electronics
are expected to rise 32 percent to $7.5 billion, making
it the fastest growing group among all retail sales
categories online.
The market research wizard developed by Worldwide Brand
Inc. is a great tool, which shows in a probability scale
whether it is worthy trying to sell your selected product
online or not.
You can find it over here. (http://www.worldwidebrands.com/?8188)
Locate drop-shipping companies
After selecting the product the next step is to find
a reliable drop-shipper for it. This might not be an
easy task! The things that you should look into a drop-shipper
are the followings:
1. A reputable supplier with drop-shipping experience
2. Ready to ship one item at a time
3. Do not ask for any membership payment
4. Will use your name as shipper
5. Will enclose blank invoice or invoice from you
6. On the packaging there will be no indication that
they are the supplier.
You might think that the easiest way of finding a drop-shipper
is just to buy one of the numerous
lists on the Internet for sale. I won’t recommend
you to use them for number of reasons. Often, these
lists are outdated or carry wrong information. Even
if you find the companies through the lists, since many
people use these lists, you get into fierce competition
for market share not even starting to sell.
Use the following approach instead:
Online search
The first step is, naturally, to use the search engines.
Using various combinations of the keywords
of your product with words: manufacturer, wholesaler,
drop-shipper, dealer, see if you can find the original
source of the product.
If several online retailers are already selling this
product, do some detective works! Check out the
sites thoroughly. May be, you can find a clue, which
will help you track down the supplier.
If it is an imported product go to the sites like Alibaba,
ecplaza, Rusbiz, trade-india. Locate the
manufacturer and get in touch with them to find who
you should contact in your country to retail sell their
products. If the product is manufactured in North America,
the best source to find them
is Thomas register.
Trade exhibitions
You should definitely attend the trade shows related
to your category of products. This is an
easy way to find a number of suppliers, who might be
willing to work with you.
Trade magazines
Trade journals and publications are also a good resource
for finding suppliers of your products.
Although, you might have to go through a sizable quantity
of them before you stumble on the right
supplier.
Conclusion
Drop-shipping has some inherent drawbacks too. The
biggest of them is you have to totally rely on the drop-shipper
to fulfill your order and get the product to your customer
on time. The others are: you don’t have any control
over the price or availability of the product. However,
a good
drop-shipper cares for his reputation since his business
depends on retailers like you. That’s why
you have to be very careful in choosing the right drop-shipper.
About the Author:
Nowshade Kabir is the founder, primary developer and
present CEO of Rusbiz.com. A Ph. D. in Information Technology,
he has wide experience in Business Consulting, International
Trade and Web Marketing. Rusbiz is a Global B2B Emarketplace
with solutions to start and run online business. You
can contact him at mailto:nowshade[at]rusbiz.com,
http://ezine.rusbiz.com/archivenews.html?nl_oid=47
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