Dropshipping, as a form of selling, has existed for a long time. It is however most successfully implemented in the USA but is relatively new to the UK and Europe and other parts of the world.
The main difference between dropshipping and traditional ways of selling or running a business is that with dropshipping you don't need to buy in bulk and store your goods in the hope of selling. Instead, the products remain with the manufacturer or wholesalers, you do not actually buy until you have sold, that is, you know that you have already made a sale.
This method of selling works both on and offline, and for the "Interpreneur" this is great news! You can literally start your business with very little capital. Also, for those with home computers, you can start a business right from the comfort of your home with no hassles. Best of all it's RISK free.
How does it work?
Dropshipping is very simple. Once you find your source, you simply advertise the goods under your own business name. If you're online, you can do this via your own website or these days in the popular auction sites like eBay, Amazon and Yahoo. Offline, you can do this via the normal mail order route.
Most manufacturers have a recommended retail price (RRP) but you are free to advertise the product at a price that suits you. With hopefully a low cost price any profit you make belongs to you. The customer normally pays for the postal and insurance costs.
For those selling online, most wholesalers provide you with pictures and descriptions of the product. Some even provide websites!
Once you have made a sale, you then purchase the item from your source and they directly dispatch it to your customers once you've provided them with the relevant information.
Most dropshipping companies will not include any of their company information in the packaging. Rather, most offer to include your details on the invoice and depending on the quality of the packaging may charge a small fee, that is if you wish to include
What are the benefits?
The immediate benefits of dropshipping are apparent.
You save on
INVESTMENT COSTS - You start with next to nothing
SPACE - You don't need to have a garage or hire a warehouse to store your products. It's all stored with your supplier. You can easily work from home
TIME - No need to pack your product, your supplier will do that for you.
SHIPPING COSTS - No need to do the laborious work of packing and packaging.Your supplier does that for you.
"MINIMUM AMOUNTS" REMOVED - You don't need to buy minimum amounts before receiving payments. Once you make a sale, you make your profit instantly.
OWN EMPLOYER - You're your own boss with nobody to answer to.
This is truly an amazing way of starting your own home based business. You can work full time or part time and make extra money. How much depends on you. You work to fit into your lifestyle
A General Word Of Caution
Although, there are some genuine dropship companies out there, beware of the scammers! There a many resellers or middlemen out there posing as wholesalers and charging exorbitantly not only for their goods but they even charge membership fees.
You should never have to pay a recurring fee for placing your orders with real dropship companies.
Also, since packaging and shipping are out of your hands, you should expect to be held accountable should any delays occur or should any defective goods be sent. Thus it's important that you check your suppliers out before advertising their products.
Not all dropship companies will stand behind their products or offer complete product assurance. From these types, it is best to steer right clear. In fact, we will suggest that before you join any dropship companies, contact them - either by phone or email and see the sort of response you receive - that's likely to be how they willl respond should you encounter any problems.
General Advice
Select a product that is likely to sell and with a nice profit margin. You'll need to do your own research into the market. The supplier may have impressive products but do and will they sell? Have you got any competition? How much are they charging? Some products sell in high volumes but with low margins and vice versa.
Sell a limited but related range of products rather than trying to sell every item possible.
Select a dropship company with good reputation. The rise in the global market has been accompanied by a rise in scammers, many posing as middlemen and fleecing the unsuspecting person. There are many companies asking for hefty membership fees to join their so-called "turnkey" system. Avoid all such upfront fee-demanding programs.
Be prepared for back orders, returns etc. Although a great deal of hassle has been removed from dropshipping, there are still common problems that most companies face.
Finally, set yourself up as a serious business pro. Avoid spamming and such like. File your Tax Id and register your business.
Where do I go from here?
There are thousands of so-called dropship manuals selling for hundreds of dollars but you need to be careful because several reasons already mentioned. We have trawled through the net and bought several of these lists to check the sort of information they offer and their accuracy. So far we've only found one that delivers in all areas, plus it's also certified by eBay. You can find their link below.
Happy dropshipping! |
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