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How to Start a Profitable Drop Shipping Business – Ultimate Guide

by GK July. 26, 17 no comment
Drop Shipping Business

Drop Shipping:

Drop shipping is an eCommerce business, which has a cost-effective way to sell items online. One can utilize drop shipping strategy to promote a business without hoarding up stock. It can also be utilized to grow one’s business, by trying out various markets before investing. The primary question that comes to mind is how to start a drop shipping business. There are numerous drop shipping techniques to choose from, depending on the aims of the business. The basic model of drop shipping business enables online stores is to satisfy the customer’s needs. The eCommerce retailers are not concerned about stocking the item or shipping them. The online retailer mostly forwards the request to a drop shipper who stores all the related logistics and inventory of their chosen niche. The online retailer takes advantage of the supply chain without bearing the burden of the inventory. There are many pros of doing drop shipping eCommerce business, especially during the initial stage of it.

The importance of Drop Shipping:

The benefit to starting a drop shipping business is that a supplier tips about the product being sold, without purchasing it before it. The eCommerce retailers always act as service providers. The greatest advantage of drop shipping business is the small start-up capacity required and the initial investment for a substantial determination of product without buying stock up front and dealing with it later. Drop delivery can likewise be an excellent method to help expand inventory and subsequently test the items, as it is simply a question of adding a new item to the store. Using the strategy of drop shipping, an eCommerce retailer is capable of offering more and varied products without actually purchasing the inventory. The retailer forwards the order to the drop shipper who ships the item and also prepares the invoice for the service offered. The retailer has the essential duty to make sure that the customer receives the product within the allocated time and the charge is appropriate for the service offered.

Maintaining an eCommerce business is considerably simpler as there is no need to manage physical items. With drop shipping, a retailer does not need to stress over the following:

  • Paying or managing a distribution center
  • Transportation and Packing requests
  • Tracking stock for reasons of accounting
  • Returns management and inbound shipments
  • Always requesting items and supervising stock level

Low Overhead:

Since there is no need to acquire stock or deal with a distribution center, the overhead costs are low. In fact, there is a various drop shipping eCommerce business who are operating from a home office with a tablet. As the business develops, the costs will increase, yet would be lower than the typical physical organizations.

Flexible Location:

A drop shipping business can be operated from anywhere, provided internet connection available there. The operator may continue the business as long as they can maintain an easy communication with the customers and suppliers.

Easy to Scale:

Most of the drop shipping supplier’s additional order will be borne by the provider, allowing minor headache or extension of work. Sales bring an extra work particularly in the field of customer service. All these advantages make drop shipping business, an attractive model to both starting as well as recognized wholesalers.

Statistics of Drop Shipping Business:

In the United States, the retail eCommerce market is around $220 billion USD, and it has a growth of 17% every year. The market is expected to reach $370 billion USD by the end of 2017. Around 30% of the online retailers have chosen drop shipping as the primary order fulfillment method. In 2011, nearly 34% of Amazon’s products worth $14.2 billion dollars was carried off by drop shipping method. Reports suggest that the manufacturers who have opted for drop shipping have 18.33% more profit in comparison to the ones who follow traditional approach. During the festive season of 2013, drop shipping helped 18% of the retailers to increase inventory. The number of organizations using drop shipping strategy is enormous. One of the leading online retailing company Zappos.com started out as a drop shipping firm. The world leaders such as Sears and Amazon use this strategy for their operations. Wayfair.com is one such company which is entirely based and dependent upon drop shipping. If the business is new, then this approach is appropriate as it is easy as well convenient for getting success for your online store.  It can quickly help you sell more stock at an efficient rate.

Profitability:

Profitability

Drop shipping is the model of business that provides ease of operation along with growth. Mainly it is order independent tactic of doing business in the eCommerce sector. Points mentioned below suggests how profitable it is:

  • Various product niches to choose from:

The first stage of success is that there is a broad range of product niches to choose from. The benefit of the drop shipping eCommerce business is that the firms can associate with a more traditional enterprise which is producing thousands of products.

  • Time-saving business advantages:

The valuable time invested in inventory compilation is less in drop shipping business.

  • Minimal investment:

It is beneficial to start a drop shipping business as the investment is minimal, thus reducing the risks associated with it. 

  • Security advantages:

The drop shipping business provides an opportunity to run business swiftly from the comforts of home. The firm would be free from all problem related to the business such as customers handling, secure checkout, etc.

  • Mobility:

The business can be operated from any place with the help of the internet, thus neutralizing major physical restriction problems.

  • Convenience & Efficiency:

The drop shipping eCommerce business takes lots of work to start successfully and develop when the resources are limited. But to start a drop shipping business, one must focus on the customer service and marketing plan to be efficient and at the same time be convenient.

How to Start a Drop Shipping Business:

One can visit ShopyGen to start their drop shipping business.  By using it, they can agree with a supplier who will directly send the product to the customers. To start the business one must identify the goods that he or she wants to sell through a trusted suppliers. Also, registration of the business with the state is required to get all licenses and permissions which are very important to operate it.

Choose a Niche:

Niche

You can choose from various niches supported by ShopyGen, but the niche should be chosen appropriately to have the upper hand over the competitors. Select a niche where you can operate better. For enhancing and selling electronic products, operate a blog which teaches the readers how to assemble goods. Planning on selling goods which are mostly inaccessible and thus bought online. Your product will not be low cost. The price permit you to get stable profit from every single sale. If the price is more than the other sellers, then the buyer might look into other decisions before finalizing a purchase.

Identify Suppliers:

Identify Suppliers

After selecting your niche, it is important to find vendors who are interested in availing drop shipping. To search suppliers, the following methods can be accessed:

Search the list of wholesale available at ShopyGen.Com and the product they intend to sell. More often than not, wholesalers do not invest in online promotion. You may have to do a bit of research before choosing one. If you are not able to find what you are looking for, then filter out wholesalers by using other terms such as supplier, reseller, bulk, and distributors.

Check Which Suppliers Your Competitors Use:

A reliable way to find a reliable supplier is to identify your needs and then research about how your competitors counter them. One can know about other sellers with the help of internet. There are many retailers who provide contact numbers and information on their website, thus making it possible to get in touch with them directly. They may highlight their brand. Chances of finding reliable suppliers are high. If they do not highlight the brands, then scroll for products which they offer. Sort out the order which you are likely to offer them, and they would be interested in the same.

Choose the Best-Selling Products:

If you find a supplier, you must go through the products pages and search for what products you would like to sell. You would like to sell a product which is in high demand.  There are various research techniques that you can use to gauge the popularity of products. Diligently do market research. You can learn about the demand associated with various products by using Google’s Keyword Tool. This tool gives you information on many people searched for a term. See the full list on eBay. At first, go to the advanced search and subsequently check and complete the listing box.  Browse the keywords and category section. When you scroll down the pages, you will check the items and know more about them.

If you have any doubts or concerns, feel free to drop a line or two in the comments section. We shall reply in a day or two. And yes, we can help you start a drop shipping business. Subscribe to our newsletter to know more about how to start a drop shipping business. Keep watching this space for insights on drop shipping eCommerce business. Our best wishes are with you and your eCommerce venture. Cheers!

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