What Is Drop Shipping??
Drop Shipping allows us to sell products to our customers without incurring huge running costs like a wholesaler would have.
PROS OF DROP SHIPPING!!
- Low Risk Business Model
- Low Start-up Costs
- Profitable Business
- Low Start-up Costs
CONS OF DROP SHIPPING!!
- Low Profit Margins
- Highly Competitive
- Legal Liability Issues
- Highly Competitive
HOW DROP SHIPPING WORKS??
When a customer places an order for a product online, the retailer receives the order and payment for the order, and then either automatically or manually contacts the wholesaler or manufacturer, issuing a purchase order for the item and providing instructions for shipping directly to the customer. The wholesaler or manufacturer ships the product, and the retailer earns a profit. The drop shipper never sees a or handles the product, and the dropship supplier never sees or deals with the customer.
Drop Shipping is best for the for niche products. Chances are that products that are in high demand are being offered by large suppliers at a fraction of the price you will be able to charge, so using a more costly shipping method won’t be financially rewarding. But if your product is unique, then it make sense!
To protect your customers from bad experiences, test drop shipping companies for yourself beforehand and list the best ones. Drop Shipping should take a reasonable amount of time and surely not more than it would have taken you to handle it all by yourself.
BENEFITS OF DROP SHIPPING!!
- Lower Capital Investment
Most notably, drop shipping allows you to avoid spending large amounts on stock upfront. You won’t have the same large overhead costs of all that goes into manufacturing and storage. You are therefore free to focus on sourcing dropship products and bringing them to market before you have even made a sale.
- Low Barriers To Entry
Other obstacles that you would traditionally face aren’t present in drop shipping. You do not need to manage a fulfilment center, pick, pack and ship orders, track inventory and stock levels, or handle returns.
- Scalability
In traditional retail businesses, the more orders you get , the more work is required to fulfill them. In drop shipping, that responsibility, at least in terms of production, picking, packaging and shipping, is handled by your supplier. this makes it easier to avoid bottlenecks and grow your operation quickly.
- Diversification
Since all you need for drop shipping is an online storefront and a supplier, it gives you the ability to maintain multiple drop shipping companies or storefronts. This can allow you to diversify your product offerings and save you from the fluctuations of the market or seasonality that occurs in relation to some products.
TIPS OF DROP SHIPPING!!
- Own Your Supplier’s Mistakes
Even great suppliers make mistakes, and with a drop shipping business model, you are guaranteed to have fulfillment errors from time to time. So what do you do when your supplier sends the wrong item or nothing at all?
- Take the blame
- Make it up to the customer
- Have the supplier pay to fix it
- Manage Your Inventory Levels
Most experienced drop shippers would agree that managing inventory across multiple suppliers is the biggest challenge you will face running a successful dropship business. Do a poor job of this and you will constantly be informing customers that their order is out of stock not a great way to attract repeat business and loyal brand fans.
- Use multiple suppliers
- Pick your products wisely
- Use generics to your advantage
- Check on item availability
- Dealing with out of stock orders
- Fulfill Orders Intelligently
Using multiple suppliers has a number of benefits that we have discussed. It increases the likelihood that items will be in stock, offers geographical diversity for faster delivery times, and prevents you from being reliant on any one source for your products.
- Route orders to a preferred supplier
- Route orders based on location
- Route orders based on availability
- Route order based on price
HOW TO PROMOTE YOUR DROSHIP STORE??
- Build A High Converting Drop shipping Website
Before you spend all your budget on figuring out how to market your drop shipping store you need to be certain that when a visitor comes to your website they have a reason to stay. And better yet, to convert into a sale. Make sure your website name highlights your brand and differentiates you from other ecommerce stores. Greet people with a clear message that defines what your drop shipping products are about and who should buy them.
- Put Your SEO Content Marketer Hat On
While working on improving your SEO description is not the quickest way to lure in potential customers and market your drop shipping store, with consistent effort, it’s going to be your best long term investment likely forming the largest and cheapest share of your incoming leads. For the search engines (e.g. google, Bing, Yahoo!) to rank your drop shipping business, you need to sprinkle specific, long tail keywords throughout your website updates and every article you publish.
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