Dropshipping 101 – What is Dropshipping
You can define dropshipping in many different ways, but basically it all boils down to this: if you are a retailer, you will sell the item, but have the manufacturer ship it to your customers directly from their warehouse. This will minimize and even eliminate your risk, because you don’t have to physically be a ‘middle’ man. You don’t have to buy the product and hold it until it has all sold. The supplier is the one who will take care of storing, packaging and shipping the goods. Imagine the money you are saving this way! So you might have the product images up on your website, but the actual products will arrive to the end user from maybe over 3000 miles away, from the supplier or manufacturer’s warehouse.
Here are the main steps on starting a dropshipping business, aka dropshipping 101:
- make your research (niche and then products you want to sell)
- make sure you have a website where you can list the products you have decided on selling
- advertise your website through various SEO promotion techniques, so you get traffic and ultimately sales
- once you sold the products, collect the money from the buyer
- place the order to your supplier – your cost is, of course, much less than what you charged your buyer, since you’re only paying wholesale price
- the supplier will ship the product directly to the end user
- rinse and repeat
Easy enough? Exactly. This is why dropshipping is such a lucrative business, since you ultimately make your profit on the difference between the wholesale and retail price.
When you search around for manufacturers, make sure that they allow dropshipping, because personnel have to be assigned to process and ship these individual orders, which means the main shipping and receiving system may become bottle-necked. This is why not all manufacturers are keen on dropshipping business.
