Drop-shipping - A Great Way of Making Money Online
Using the Internet to sell products and services to ever increasing number of net users is a good way to start your own business.
If you are not taking advantage of this great
opportunity you are just missing the boat! Consider this:
e-commerce, contrary to popular believe, is thriving and
increasing at a double digit growth rate. According to Jupiter
Research, Online sales during this holiday season in United
States are expected to reach $21.6 billion, a 19 percent
increase over the same period last year. Jupiter also predicts
in the report that 86 million U.S. residents will make
holiday purchases online this year compared to 73 million
last year, which is an 18 percent increase.
No doubt that this is the right time to get into online
business. Building a website for selling products or
services is no longer that difficult. You can make your
own website by using available sophisticated but
easy-to-learn-and-use programs like Macromedia Dreamweaver,
Microsoft Frontpage, Adobe Go live, etc. There also
exist various online web store builders similar to
Rusbiz.com, which allow you to create powerful web
stores using simple editors and numerous templates.
You can also setup a store with E-bay and sell products
through it. Finally, you can hire professional web
designers to develop your website. So, the important
question is not how to get online, but what to sell
on the Internet?
In one of my articles - What to sell on the Internet?
I wrote about selling information products. Although
this is an interesting concept, you might think that this
is not your cup of tea; and you still prefer to work
with some tangible products. In ideal scenario,
probably, you want to sell a product of your choice but
don't want to carry your own stock and don't want to
handle the shipping. Is there a way of doing this? Yes,
there is! It's called Drop-shipping.
What is drop-shipping?
When a manufacturer, wholesaler, distributor or
importer, after receiving an order from their
retailers, individually pack and deliver the
product to the customer of the retailer with
retailers address as shipper, this selling
technique is called drop-shipping.
The advantages of drop-shipping include:
- You do not have any inventory. So, there is no stock
carrying expense involved.
- You pay for the item only when it is sold and you got
paid from your customer. You don't need to invest money
in buying the product.
- You can sell just one item at a time. No minimum
- Your drop-shipper will supply you with necessary
product image and specification. You don't have to
spend money on creating your own.
- You fix your own selling price of the product.
Convenient, when you know your niche market well.
- You can offer various products on your web store
from multiple suppliers.
Select a product to sell
Once you decided to go with drop-shipping you need
to find products to sell and find drop-shipping
suppliers for those products. According to the same
report from Jupiter following are the most favorite
categories for online shoppers: Books by far the
most popular category, after that comes clothing
and shoes, music, toys, video tapes and DVDs, gift
certificates, consumer electronics, accessories,
videogames, bed and related items, and bath items.
You should also consider that this year, total
Internet sales of consumer electronics are expected
to rise 32 percent to $7.5 billion, making it the
fastest growing group among all retail sales
The market research wizard developed by Worldwide
Brand, Inc. is a great tool, which shows in a
probability scale whether it is worthy trying to
sell your selected product online or not.
Locate drop-shipping companies
After selecting the product the next step is to find
a reliable drop-shipper for it. This might not be an
easy task! The things that you should look into a
drop-shipper are the followings:
- A reputable supplier with drop-shipping experience
- Ready to ship one item at a time
- Do not ask for any membership payment
- Will use your name as shipper
- Will enclose blank invoice or invoice from you
- On the packaging there will be no indication that
they are the supplier.
You might think that the easiest way of finding a
drop-shipper is just to buy one of the numerous
lists on the Internet for sale. I won't recommend
you to use them for number of reasons. Often, these
lists are outdated or carry wrong information. Even
if you find the companies through the lists, since
many people use these lists, you get into fierce
competition for market share not even starting
Use the following approach instead:
The first step is, naturally, to use the search
engines. Using various combinations of the keywords
of your product with words: manufacturer, wholesaler,
drop-shipper, dealer, see if you can find the original
source of the product.
If several online retailers are already selling
this product, do some detective work! Check out the
sites thoroughly. May be, you can find a clue, which
will help you track down the supplier.
If it is an imported product go to the sites like
Alibaba, ecplaza, Rusbiz, trade-india. Locate the
manufacturer and get in touch with them to find who
you should contact in your country to retail sell
their products. If the product is manufactured in
North America, the best source to find them
is Thomas register.
You should definitely attend the trade shows
related to your category of products. This is an
easy way to find a number of suppliers, who might
be willing to work with you.
Trade journals and publications are also a good
resource for finding suppliers of your products.
Although, you might have to go through a sizable
quantity of them before you stumble on the right
Drop-shipping has some inherent drawbacks too.
The biggest of them is you have to totally rely on
the drop-shipper to fulfill your order and get the
product to your customer on time. The others are:
you don't have any control over the price or
availability of the product. However, a good
drop-shipper cares for his reputation since his
business depends on retailers like you. That's why
you have to be very careful in choosing the right