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Drop shipping – direct supplies of goods

Drop shipping – direct supplies of goods

Many people are afraid to launch their own online shop due to huge expenses. But just imagine, if someone would offer to bear initial expenditures on purchase of goods, their storage and would take the control over goods delivery to the end consumer. Agree that in such a way it would be much easier to start your own business in the Internet, spending your time only on requisition processing and e-shop promotion. It sounds great, doesn’t it? And I assure you, that nowadays it is possible.

This article will explain what the term ‘drop shipping’ means, will outline the main advantages of the strategy and will provide several solutions for the most widespread challenging problems.


What is Drop Shipping?

Drop Shipping is a kind of business activity, which allows realization of manufacturer’s goods being an intermediate party. In other words, you transfer the payment (to a manufacturer or a wholesale dealer) for a product only after it was sold to a customer. Here you don’t have to concern with the product packaging and delivery to a customer. You just sell the product at a convenient for you price, the difference in price set by manufacturer and your own makes your business income.

Besides, it is possible to arrange it so that the majority of your clients even will not know who has sent the product.


Advantages of drop shipping:

1. Minimal investments: drop shipping gives an amazing opportunity to make money out of Internet trading without expenses. You don’t need to invest heavily in procurement of goods, delivery and storage facilities, but in the same time you have a possibility to offer thousands of goods to your clients.

2. Convenience and effectiveness: it is very hard for a newcomer to earn money via the Internet. One needs to invest a lot of efforts to perform promotion and optimization for a successful startup of an online shop, which requires additional time and expenditures. Drop shipping itself will not bother, so you will have more time to spend on SEO, marketing and client servicing.

3. Mobility: you are able to settle your business affairs at any time, in any place having just an access to the Internet.

4. Stability: perhaps you think that it is a temporary affair and far from being legal, you are mistaken. Many online hypermarkets are already offering drop shipping services, in order to push up sales and give you the possibility to start your own business.


How can one find a wholesaler offering drop shipping?

I would advise to start searching from China, USA and Europe; these are the most popular suppliers. Start with issue-related forums, such as eBay, forums of Chinese auctions, etc. Then look through large-scale internet-based stores, auctions offering drop shipping.


How does drop shipping work?

So, you've found a supplier. The next step is products selection. First, you should register at the selected site A. When registration is completed and your account is activated, you select desired items, save photos and description. Further, you post this information on your site, online shop, or in social media, setting desired price. Then you have to deal with products promotion and advertising. Don’t hesitate to offer your goods to all of your friends, neighbors and relatives.

After a product was purchased and fully paid at your site, you have to return to the site A; search for the very same product and buy it via checkout form, completing it with the address details specified by your client and choosing an appropriate delivery option. As it was mentioned above, the difference in prices is your monetary reward for the sold product. Set prices within the bound of reason, remember about business competition!

Common challenges:

Despite my good recommendations, drop shipping can hardly be referred to real e-commerce. It also has weak points and disadvantages.

1. High degree of competition.
Possible solution: nowadays a lot of people are involved in such type of earning. This fact leads to quick drop in prices for new goods.
However, price competition is not so important to have a success in such kind of business. Instead of this, foster your efforts to develop and strengthen the quality of your site/advertisements: post more interesting descriptive information, more pictures, and interesting facts, don’t forget about testimonials.

2. In-stock balance.
Possible solution: deal with several suppliers simultaneously. Alternatively, try to find out at once the amount of products in stock and reserve in advance certain quantity.

3. Difficulties in selling products that you haven’t seen first-hand.
Possible solution: present world gives us the possibility to become an expert in any area with the aid of the Internet. Search for the product’s reviews in other sources, or clarify all issues that may interest your clients at first hand (ask the supplier directly). As an alternative, you can buy the most popular goods, get acquainted with their features and then resell them at a profit.

4. Supplier’s mistakes, defective products.
Even the best-reputed suppliers can make mistakes: send the product to a wrong address, send a wrong product, or send faulty production. Remember that all these questions will lie on your shoulders; neither your clients, nor the supplier should concern these issues. After goods are dispatched, ask the supplier to provide you with tracking code of the package, in order to trace its location and when something goes wrong to write to support team of the online shop. If your client receives a defective product, ask him to send its photos and/or video that will confirm the event of a defect. If it is really so, you will have to give a refund to your client and take the product back. Then contact the supplier and settle a point on the product’s replacement or refund. Never delay these issues.


Conclusion

Is drop shipping a simple way to achieve success in e-commerce? Surely, no. As any other web-based business, it requires investments for the improvement of the site quality, marketing strategies and clients’ servicing. However, drop shipping is a really good and easy activity to start with in the Internet and build a base for further successful online shop, without excessive cash expenditure.