It seems all that’s in the media these days are horror story’s about recessions, rich bankers and house prices. So why not change your luck buy starting your own home based business? One of the simplest ways to start a business is to set up an online shop! In 2006 online sales were $146 billion in the US alone. So how do you do it?
Drop shipping is a method of retail where products are purchased and stored by a distributor who handles all of the logistics for you. Instead of you ordering stock in bulk and managing inventory, the stock remains warehoused with the distributor and when you make a sale, the distributor packs the item and ships it straight to your customer with your company label and invoice so the customer has no idea it hasn’t come from your business.
To be fair drop shipping can be more expensive than buying wholesale and you may have to pay an admin fee for the postage and management costs involved. However it definitely does not mean that you cannot make money when you drop ship. You must stay competitive and market your products
hard, you don’t have to enter price wars, if you offer a competitive product with a user friendly website, good customer service you can make good money.
The first step is to decide what you want to sell! Once you have carefully researched your market to make sure you have a niche, there is a demand for the product or you have a new unique selling point you can start looking for a drop shipper to supply your stock.
You can easily find dropshippers by searching trade magazines, visiting trade shows or looking through the internet. Carefully research your dropshipper, there are some unscrupulous companies that offer their products at over inflated prices, they cant deliver what they promise or charge you a monthly fee to use their service, AVOID THESE! You will however be able to find a variety of reliable, quality dropshippers with time and patience.
Once you have decided on the dropshippers you want to use and have set up a trade account with them you will need to start thinking about what platform you are going to use to sell the products. The easiest way is to set up a website, if you have the skills to do it then there is nothing wrong with that. However an out of date crude looking website will put customers off and ultimately end the business before you start.
To get your self of to a running start, employ a professional web designer. You should expect to pay between 300 – 600 for a basic zencart or oscommerce set up. You will also need to pay for your web domain 5+ and your web hosting 2 – 10 a month. You will need t have a think about colour schemes and what you need the shop to do, this is what you are paying your web designer to create. If you want them to design it for you they will charge you for that.
Once the shop is up and running you will be able to upload your products on to the site, for some dropshippers you will need to do this one at a time, however more and more now offer datafeeds or downloads so you can use tools like Easypopulate or Advancepopulate to upload thousands of products in a few simple clicks. You can list as many as you want as you don’t pay anything until you sell something.
You will need to check your dropshippers terms and conditions as you will need to draft your own returns policy.
Once a sale has been completed and you have received payment from your customer, log on to your dropship account and simply buy the stock and change the postage address to your customers address. If your dropshipper does not have a website for you to purchase the stock you may have to email with the details of what you want and where to ship it.
Once your dropshipper has received the order they will handle all the logistics of packaging and posting the product to your customer. However, remember they are still your customer, they will contact you if they have any problems and if their purchase doesn’t arrive they will contact you. This is why its important to check you have a sound, professional drop shipper.
It may take a little time to learn exactly what drop shipping is and how it works, but it is definitely a great alternative to purchasing and storing inventory. Be responsible and do your research and you will be making money with drop shipping in no time!
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Michael King ([email protected]) is the author of the BDSM in Modern Society and manages http://www.wholesale-management.co.uk.
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