Drop shipping and eCommerce Stores
You’d think that without having any products you can’t start a business. After-all, you have to have something to sell. Not so with drop shipping! Figuring out how to get products that will sell and how to get them to customers is a task.
The internet offers one many opportunities to answer all your business questions. You could do the time-consuming thing and create your own products or you could consider bulk buying and ship to customers. Investing all that money is risky and expensive, especially when you need to find the best pick and pack warehouse in South Carolina.
There is a solution that makes the startup process of an ecommerce business simpler and without all the risk. Drop shipping has taken the online world by storm. This is the most low-risk method of starting your own online business and its also fast and easy to set up.
Industry watchers state that 20 to 30 percent of online businesses are using drop shipping. Although estimates vary, its a proven business model. If you choose to follow this route you’ll be in good company with the likes of Amazon and many other good drop shipping companies.
Drop shipping allows you to sell almost any product in any niche without having to deal with the hassles that go with traditional businesses.
Storage of products can be very costly and entails huge amounts of inventory, rental space or a garage filled with boxes. Packaging products throughout the day and then shipping them to many different locations. Transporting these to the post office, sounds impossible.
The best part is that you don’t have to outlay any funds upfront for the purchase of products to resell, when you don’t know whether they will sell! Drop shipping ensures you avoid the risk of potential loss of any capital investment.
How It All Works
You will work with a distributor or wholesaler that offers a drop shipping service. Many manufacturers and wholesalers offer this type of service. Marketing your business is handled by you. You can set up a virtual storefront on Amazon or your own website with a shopping cart. You make the contacts and prospective customers, do email marketing, social media and write your blog. It is your job to persuade customers that your products will enrich their lives. All the advertising, marketing and promotion is in your hands.
However, when the product has to be packaged and sent to fulfill the customer order, the drop shipper has it in hand. You forward the orders you’ve received and pay the wholesale prices. This is submitted online, by email or spread sheet. The inventory is in their warehouse and they put the order together and ship it to the customer. Its done and there is a handling fee of between $2-$5. This is over and above the wholesale price and the shipping cost.
Although this may seem high, it is possible to still remain profitable as a drop shipping business. Raising your prices will increase your profits. Selling greater volume will also help. Negotiating a lower handling fee with good drop shipping companies is also an option. You must bare in mind that you are only paying these fees if you sell an item and you’re not risking any money outlay upfront.