How To Start A Drop Shipping Business

drop shipping business processHave you ever heard about dropshipping and drop shipping business? Dropshipping is a fulfillment service of wholesalers that offer drop shipping.

Drop shipping business is actually a business related to companies that act as dropshippers. But some people also use the term for a retailer that works with drop ship suppliers.

If you’re just starting out selling physical goods online, you can lower risks by outsourcing the order fulfillment to a dropshipper. It’s less riskier than a full-fledged e-store because you can start it from home with no inventory and no order fulfillment.

How a Dropshipping Business Works

The cycle of a dropship business model starts when a buyer makes an order and pay you. You then forward the order placed to your dropshipper and they fulfill it for you.

Outsourcing the fulfillment may lower your risks, but there is no way to use it as an excuse for not providing excellent services.

You’re still responsible to deliver your promise to the buyer. You must close the buying cycle by monitoring the fulfillment until your customer enjoys a pleasant experience when doing business with you.

Running a dropship business is different from promoting affiliate products from other merchants. In an affiliate business you don’t directly deal with customers. But you have to deal with them in your dropship business.

You have to open many communication channels. Those channels allow clients to talk with you and you can solve their buying related problems.

For this reason, make sure that the business idea is right for you and that you have made the necessary preparation before you start it.

Choosing Your e-Store, Niche, and Products

There are two places where you can sell your products: your own e-commerce website and an external online store like eBay or Amazon.

If you sell products via your own site you’ll have to have your own domain name and get your e-commerce website up on that domain. As an option, you can also build an online store at eBay using their user friendly site builder.

Brainstorm your drop shipping business ideas. Take a look at some niches and sort them out based on your interest and knowledge. You can also add information about market size, trends, and profitability.

Once you decide on a niche to pursue, learn all things related to your target audience–demography, psychography, and geographic coverage. Get a rough idea first because you’ll want to compare it with your wholesaler choice later.

Depending on your audience needs, decide what types of products you want to sell at your e-store. Choose products that are similar or under the same category instead of products from totally different category.

Spark your creativity in merchandising. Try to bundle products and give your customers more selections to choose from.

Finding Drop Shipping Business Wholesalers

Locating reputable dropship business suppliers are key to a successful drop shipping business.

One way to do this is to type in the name of your candidates on Google. Just take a look at comments and reviews about the firms. Before you sign up an account with them, you want to pick candidates that have low to no negative records.

Another way is to visit supplier directories. There are paid supplier directories like Worldwide Brands, SaleHoo and Doba. But you can also find the free one like Wholesale Central. They have their pros and cons so you have to go with one that covers your niche.

Can you get a select candidates of drop ship suppliers? If so, go learn about the businesses that carry the inventory you would like to sell.

Visit their website and contact them by phone or email. Take notes your impression about the businesses, especially things related to their support system, technology, industry experience, and payments.

Once you select a company, set up a reseller account with the company. Some companies will require a tax ID and a business license before you can open an account.

Drop ship programs may charge a fee and some offer their services for free. As free does not always mean better, always read the agreement before you sign up with a program.

Promoting Your Drop Shipping Business

Once you set up your e-store your next job is to drive traffic to your website and convert these visitors into paying customers.

You could buy pay-per-click (PPC) ads like Google Adwords to get traffic to your product page. Or, you could also write product reviews, put your e-store address at the end of articles and send them to directories for publishing.

When a customer buys your products he or she will pay you on your selling price via a payment system like Paypal. You place the order with your drop-shipper and pay them at an agreed price. If the agreed price is lower than your selling price you could earn a profit.

Now it’s time to follow up with your customers.

Placing the order with your drop-shipper is not the end of your drop shipping business cycle. You have to ensure the customer has received the order and satisfy with it.

Make sure you provide various communication channels so your customers can contact you for any issues that may arise. Remember this, satisfied customers are more likely to give you repeat orders.

What to Do Next?

Brainstorm business ideas for your drop shipping business. For any ideas, make sure you simulate your profitability and the lowest profit you want to accept. Once done, your next step is to learn how to build an e-commerce website.

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How To Start A Drop Shipping Business was last modified: November 21st, 2016 by Paul Sarwana