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Sunday, 16 October 2011

Things To Consider When Starting A Drop-shipping Business

Things to Consider When Starting A Drop-shipping Business

As you will soon discover, dropshipping is an extremely effective business model for anyone who wants to start an online retail business.  You can either run it through your own website, or through some other outlet, such as an auction site.

However, because this form of online business has become so easy to do, and because of its increased popularity, many prospective dropshipping businesses have become targets for the less reputable people online, such as scammers. 

Unfortunately, many people who do not really understand what dropshipping is about only see it as a way of getting rich quick.  Because of this, there are plenty of people out there who are ready to exploit them.  In this article, we will look more closely at the things you should consider before you decide to go ahead and set up a dropshipping business for yourself.

1.      You need to carry out plenty of research with regard to dropship sources.  It is best if you avoid using search engines when doing this, as they will also offer up a list of the less reputable companies around, as well as providing you with page upon page of links which are completely useless.  However, once you have found a reputable source for the information that you require, and then the real work begins. 

2.      Avoid any companies which expect you to pay them an up front fee (membership or monthly).  Also avoid those which offer you a fully featured dropshipping solution that provides you with a website and everything else that you need in order to get your business off the ground.

3.      Ensure the dropshippers you are looking at require a valid wholesale certificate from you.  You will gain this through a business license, so avoid any that don’t have that requirement at all costs.  Unfortunately, most of the companies which are willing to do business with an illegal business will usually be middlemen, who then send your order through to the wholesale company, and will end up taking a cut of the profits that you are trying to make.

The best way to find a legitimate dropshipping company is as follows:-

a.       If you have seen a product which you are interested in selling, then contact the company producing it direct.  Enquire if they have a dropshipping facility, and if they don’t, then they are likely to be a light bulk seller.  This means that they will only normally sell their products wholesale with a minimum of say around $200 or so (in many cases, the minimum number is much higher). 

b.       Another way is looking at such directories that have been set up and deal directly with legitimate dropshipping companies only.  One such directory is WorldWideBrands. Such directories offer you an extensive searchable list of products, and which companies supply them.  So if you are looking for a way to save yourself time in searching for good quality products to sell through your online business, then these directories are certainly the right way to go.

4.      However, once you have found a company that does offer dropshipping facilities, you will need to get a valid reseller/wholesale certificate.  Yet, what the exact requirements are in order for you to obtain this certificate will vary from state to state.  But the minimum requirement for starting any dropshipping business online is that you have a business license.

5.      Now you need to contact the dropshipping company in question and set up an account with them.  Unfortunately, you may find that because your business is new, and you are not able to supply any references, then you may find that you need to set up a pre-paid account with them.  Normally, this means that they will charge your purchases to a credit card instead of providing you with a line of credit.  In order for this to be done, you will need to fill out a credit card form, an account application and provide them with your wholesale certificate.  Once this has been received, they will then provide you with a wholesale catalog and anything else that you need in order to get your business up and running with their products.

6.      Also, do not be fooled by those sites offering you a dropship directory for a fee (normally around $5 to $15).  Unfortunately, these are normally copies of the more legitimate lists provided by reputable directories, and will often be out of date.  So really, you are better off going to one of the more reputable directories and paying them a little extra in order to get a regularly updated list.

7.      Now that you have found the product which you are interested in selling, and you have made arrangements with the dropshipper in question, it is time to get your site up and running, or your account set up with one of the more reputable auction sites, such as eBay.

Why You Should Start A Drop-Shipping Business

Reasons for Starting a Dropshipping Business
If you are looking for one of the best opportunities to be had today for running a business from home, and cost little if anything to set up, then a dropship business is probably the answer for you.  Not only can you run this business from the comfort of your own home, you will not have to worry about keeping large amounts of inventory in stock and you will not have to worry about getting the products shipped to your customers.  Plus, you can still run this type of business while working in your normal day to day job.  However, if the business really does get off the ground, then you can become a work from home mom or dad instead.

In order to get your dropship business started, you will need either your own website, or you can sell your products on eBay.  Then once an order is received and has been paid for by a customer, you send the order over to your dropship supplier and they then send the order directly to your customer while you still make a profit.  Also, you will need to set up an electronic payment system such as those provide by PayPal. 

If you were to carry out a search of the web today, you will be amazed at the number of people who are making money through a dropshipping business.  There are even some who are actually earning a 6 figure salary from theirs, and others who are just doing it part time in order to earn a little extra cash to provide them with a better way of life.  In fact, many people often start their dropshipping business as a part time business, and it is only after the business has really taken off do they decide to do it full time instead.

The great thing about setting up dropshipping business is you do not need any special skill sets in order to get it started.  All it really needs is a person who is willing to dedicate their time to ensure that the business succeeds, as well as having a computer and this being connected to the internet. 

But the first thing you need to do once you decide to set up a dropshipping business is to form a good relationship with your dropship supplier.  Once this has been formed, then you can start selling their products online, either through your own website, or on one of the many auction sites such as eBay.

What you are actually doing is acting as a middleman and bringing together those who want to buy a particular product and those that are selling it, while still collecting a profit for you.  The greatest benefit to be had from setting up this type of business is that you do not have to worry about inventory or paperwork as with a normal retail business, as this is all the worry of your dropship supplier instead.

The other great thing about setting up a dropshipping business is that you should find yourself almost making money instantly.  If not today then tomorrow or the next day, but it certainly will not be long before you should start to see your first profits.

All you need to do is find a product that you feel people will buy, find a reputable dropship supplier, and then start advertising the product on eBay.  By using this method, you will find it costs very little in order to get your business up and running.

However, as with any business, it is best that you ensure that the products you are supplying are of the best quality possible, and also provide the best customer service that you can.  So if you are selling your products through an auction site, then make sure you keep in touch with what is happening. If any of your customers have a question, then make sure that you respond as quickly as possible and follow up afterwards to ensure that they are satisfied with the information you provided to them.

Also, always select products that there are not thousands of them selling on the internet.  By doing this, your business will not only be much more fun, but will also be much more profitable.  So before you start selling any products through a dropshipping business, you should do as much research as possible first.  Look for those products which have not saturated the market, or that has very few people competing for the customers, and therefore, the sales.

But what you do need to remember is that starting a dropshipping business is very easy, and you can run it from anywhere, especially out of your own home.  Also, such a business can be run from anywhere in the world, and will cost you very little in getting it started.

The Golden Rules Of Drop Shipping

Five Golden Rules to Drops-hipping

If you want to ensure that your drop shipping business is profitable, there are a number of things you need to remember.  In this chapter, we will look more closely at these five golden rules to ensure that you can run a profitable business.

In order to make your business as profitable as possible, you need to find a product which will sell in sufficient quantities, as well as one which will provide you with a good mark up, in order for it to be truly profitable.  Therefore, it is important that you try to determine what the demand for the product is, and also what competition, if any, there is for this particular product.  Also, if you can, take a look at what your competition is charging for it.  You may find that some businesses will have a much lower profit margin than others, including you.

It is best when first starting out selling products using dropshipping, that you only sell a select few.  Plus, also that those that you do select are related, or can be targeted and sold to the same market set.  It is important that you do not try to sell every drop-shipping product that you find, as this will help you concentrate more on marketing your goods, as well as keeping your own costs to a minimum.  Plus, you are more likely to make an impact in the market place as well.

Due to its increased popularity, it is important that you find a reputable dropshipper for your business.  Unfortunately, over recent months there have been many scams that have come to light in this particular industry.  Avoid those people who are offering to sell you lists of dropshippers for 100’s of dollars,  unfortunately many of these are middlemen who are posing as dropshippers themselves, and will then charge much more than you actually should be paying.  Remember, the whole idea of using drop shipping is to keep your costs down rather than raising them, but also still be able to make a profit at the end of the day.

Also, if you are able to, avoid the “turnkey” internet businesses which are willing to sell you a package of products, e-commerce and marketing for an exorbitant membership fee or charge you a monthly fee.  These types of businesses, you will soon find, do not actually help, but rather hinder, and you will soon find that you are not making any profit whatsoever, while they are.

However, do not let what we have written above frighten you off, instead just be aware of these pitfalls.  However, one of the best ways of finding a reputable dropshipper is through looking at such directories as “Chris Malta’s Worldwide Brands”.  This provides you with a whole list of legitimate, as well as reputable, dropshippers that you may wish consider using.

You will still need to deal with the problems associated with back orders and returns.  Unfortunately, not all the hassles associated with running a normal retail business can be eliminated from a business that is run online.  There will be times when you find that a product your customer has ordered is not in stock, and so will not be available for dispatch immediately.  Therefore, you will need to work out these matters with your dropshipper ahead of any of these problems occurring.  This will then provide you with answers that you can provide to your customer should such an event occur.

Finally, it is important that you treat your business just like any other business, so do not spam people.  Also, do not use either a personal or free web page address for your online store, and also ensure that you register the business with your County Clerk.  It is also important that you register with the Tax office so that you have a Tax ID number…and be prepared to file taxes each year. 

As long as you start off by expecting that your business is going to make a decent profit, then the chances are that you will automatically see an increase in this.