DROP SHIPPING

WHAT IS DROP SHIPPING

Drop Shipping is a complete model of doing online business that permits you to purchase items exclusively from a wholesaler and boat them straightforwardly to your client. As opposed to buying or keeping a lot of stock, you essentially band together with a drop shipping supplier and list their stock of various products to make those available to be purchased. And once you get a purchase order from your client, you just have to forward it to the supplier. The supplier will ship out the requested product straightforwardly from their warehouse to your client, and charge you just at the cost of the delivered thing.

Your success of drop shipping business depends on the product you selected to sell which then delivered straightforwardly from the manufacturer or supplier to your customer. Your profit of selling a product is the difference between the manufacturer's or supplier's price and the price retail price or the price at which you are selling it to the customer. You can maintain your drop shipping business in a mixture of ways i.e. physical store, inventory or site. Most people prefer to do the drop shipping business on eBay.

THE GOOD AND BAD OF DROP SHIPPING

Here are some good points about drop shipping that will encourage you to start this business:

No Need of a Big Investment: With drop shipping, you don't have to worry about capital It doesn't require for you to invest thousands of dollars in stock. Rather, you just buy an item when you have a purchase request from your client to fill.

Vast Range of Product Selection: As you don't need to keep an inventory of all kind of products that you are intended to make a sell offer online, you have the privilege to offer an altogether bigger number of items to your clients.

Almost Risk Free: As it is not necessary for you to invest a lot of money in stock, fundamentally it reduces the usual business risk down to almost zero. If you fail to sell then you need not to be worried about to sell your stock at a loss to recover the investment.

Run Your Business from Anywhere: As you don't have to keep numbers of stock into the warehouse, it is a great benefit for you that you can run your online business from almost any place of the globe with a laptop and a good Internet connection. 

Exceedingly Scalable: As you don't have to complete each order manually, comparatively it is easy to scale your drop shipping business.

But as every positive always has some negative, likewise there are also some bad points that you should never overlook if you made up your mind to be successful in drop shipping business:

Order processing can be troublesome: While you are doing the drop shipping, you actually working as a third party. You don't have the chance to evaluate the product physically that you are selling and the manufacturers also put little product description. With that you are unable to provide satisfactory answers to the customer's general enquiries. And lack of sufficient product description on your website can put a customer off. Besides, you never know whether the product is available or not until you buy it. As you get the purchase order from your customers and then got the reply from the supplier that the product is not available, that will annoyed and disappoint your customer immensely.

Customer Service: With drop shipping you are free from shipping responsibilities, at the same time you also lost your control of providing good customer service. There is no way for you to trace that whether the product shipped out at all or will be the delivery on time, whether the customer receiving the product as per the specification. You only get to know about all the problems to be solved immediately when a customer calls and make the complaints. But even then you are unable to provide a quick solution as you don't have sufficient information in your hand.     

 

IS DROP SHIPPING A PROFITABLE BUSINESS?

Making a business productive and profitable, you need to consider a lot of variables included. Likewise, with a well established plan, it is possible to turn your online drop shipping business into a profitable one to earn your living and to live a decent social status. Though, there aren't any magic tricks to convert your drop shipping into a multi-million business overnight. You need proper planning and most importantly you need to select the proper niche. With long lasting commitment, dedication and hard work, proper approach can make it possible to develop a business over the year that will generate the magical six figures income. Product selection is very important to gain higher profit margin. Expensive electronics are not a perfect selection and you are likely to get only 5% to 10% margin. But with the less expensive accessories there is a high chance to earn a 100% profit margin. Also your ability to offer value to your customer is another variable to determine your profit margin. Offering premium price over your competitors is a key to your success in drop shipping business.   

eBay DROP SHIPPING

Usually people are selling drop shipping products wherever they found it suitable. But most suitable platform for anyone to start and develop drop shipping business is the eBay, world's largest online market allows you to do trade locally, nationally and internationally. The platform offers millions of products for trading each day.

CREATE YOUR DROP SHIPPING ACCOUNT WITH eBay

Create a seller account on eBay: Go to the www.ebay.com. Click on register and then click on create business account. You will be directed to the page to create your eBay seller account. Follow the step by step procedures to complete the registration.

Doing extensive research to find out the right drop ship companies or suppliers:  In this part, you required to do an extensive research to find out right drop shipping company, manufacturer or supplier. There are numbers of ways to do that. Contacting manufacturers directly, using google search engines, Order from competition, attending trade shows and directories like WORLDWIDE BRANDS, SALEHoo, doba etc.

Selecting and Listing your Products: Again you need to do the extensive research as picking correctly a niche and products to sell is most important of all– it could be the biggest decision you will have to make at the beginning that surely will have the long-term impact on the success or failure of the business.

Develop retailing contact with supplier: Contact the manufacturer or supplier by E-mail, call, or send a letter. Enquire them about how can you become retailer of their products and ask whether they will drop ship to your customers. In return the supplier may ask for your legal business identity papers and you should provide them with the necessary documents

List your selling items on eBay: In the final step, make your products visible into your eBay selling account. Upload images and descriptions you received from the suppliers or from the suppliers' websites. Make it professional looking. Try to provide detail product description. Customize your page depending on your own creativity with your own images and description. Pricing is important, and should be low enough to compete with similar products but at the same time it has to be good price to earn you a good profit.

MAKING MONEY ON eBay DROP SHIPPING

There are millions of products waiting for your selection, yet not every one of them will earn you profit. Do the necessary research. To decide how well and for how much your product can make, search eBay's completed list of products. If you see that a product is sold many times at a price that meets your profit margin, be sure that is the product you should try to sell. Sometimes, the unlisted products are even better as you will have the chance to do the monopoly with those unlisted products until there are competitors. Concentrate on the fact that how much dollar is your product is coming from the selling instead of concentrating on profit margin. You can sell a 10 Dollar item at 22 dollar to make 12 dollar or you can sell 150 dollar item at 200 dollar and can make 50 dollar. No doubt, if you are a sensible businessman than which option will you choose.

TIPS FOR SUCCESS

Using other retailers, instead of wholesalers is a greatest trick to be successful on eBay drop shipping business. At any time of the year, many retailers offer clearance sell on their website, and you will be surprised to see that those products are even cheaper than the wholesale price as the store wants to clear its warehouse. If a buyer wants to buy the product from your eBay list, you just have to go to the retailer's website, place the order with payment information and in place of shipping address you just put the address of your being your eBay buyer. There is no need to tell the retailer that you are reselling the product. Extensive research is required to find out this kind of opportunity but when you found one be sure that you can make 100% to 400% profit margin.

Search other drop shipper on eBay and other online market like amazon for a similar product, compare the prices, number of product sold. For example, if you see a product offered by an amazon seller at 40 dollar and on eBay your competitor's price is 70 dollar. Then what will you do? You can offer 60 dollar for the same product. If a buyer comes to you for that product, then of course you will place the order into amazon at dollar 40 but get dollar 60 from your customer making 20 dollar profit owning over your competitor.

Actually drop shipping is nothing but a mail-order or direct marketing business. With perfect and proper research and dedication you can make your dreams come true. There are no needs to keep inventory, no need to worry about shipping, no store to run. Just received the money from customer, buys the product from the supplier at a lower price, and keep the difference as your profit. 

PAY ATTENTION TO SOME FACTS WHEN DROP SHIPPING ON eBay

But the real scenario is not so simple when doing drop shipping business on eBay. The experienced drop shipper knew very well that there are frequent ups and downs and on eBay those ups and downs are fine line between your success or failure. So, on eBay consider your drop shipping business as eBay business instead of treating it as traditional drop shipping business.

• Monitor the completion time closely: Send E-mails to your customers for feedback or you can create a survey form on your page where the customer can put their opinion. You will get a quick feedback if the shipment is delayed as the eBay buyer are used to get better service than other online services. Delayed shipment will create a negative feedback, PayPal will charge the penalty and that is enough to damage your chance of success.
• Keep a close eye to the availability of the product: Product availability is a critical issue as eBay policy does not have any "BackOrder" or "Order Cancellation" option. If a order is placed and you failed to deliver because of no availability of the products may result in closing down your seller account for good by eBay. So you must keep frequent communication with the suppliers to make sure that the product is available.
• Return and Exchange: Be prepared always to settle the return and exchange issues properly as these issues will affect severely on your feedback score.
• Product Quality and Buyers Expectations: eBay buyers are opted to receive the product identical posted in your list. It is important for you to make it sure that the supplier won't replace the product without informing you. Otherwise it will harm your sales.

Make sure that you are getting a great feedback and completion ratio according to the eBay Policy which will enable you to continue sell. Further, the way that you need to complete quickly and at the expense at which your sales close, regardless alongside all the expenses, overhead, and/or surprising misfortunes that can oblige such a recommendation. 

Expert these two pressures between eBay culture and drop ship plans of action and you'll be en route, as are such a variety of others, toward an effective drop shipping business on eBay.