Dropshipping

Dropshipping

If you are aspiring to start an online retail store but have little or no capital, drop shipping is the best alternative to choose. Is a type of business system in which you as a retailer act as middleman between a supplier (who offers drop shipping services) and the consumer. You need to register an account with the supplier, browse the suppliers website and list items you wish to sell on you site. Most suppliers allow retailers to use their product descriptions and photos.

Whenever a product is sold and payment is received, you will have to go to the suppliers site, select that product and pay the supplier, do not forget to leave the postal address of the buyer so that the supplier can ship the product as soon as possible to avoid damaging your business reputation. Usually the shipped products are label with your company name so the customer doesn’t know you are drop shipping but its better to clarify this with the supplier, here are some other issues you will also need clarify before commencing a drop shipping business Try to find out:

  • How long it will take for a product to be shipped once an order is placed.
  • What shipping methods they do offer, which shipping company do use and what their tracking systems are like.
  • What is their quality control systems like
  • If they do offer warranties
  • If you can use their product photos and descriptions for your shop listings/ecommerce site

Advantages of dropshipping

  • It’s the easiest way of starting an e-Commerce business with very little or no capital
  • You save a lot of time because all packaging and shipping is taken over by the supplier
  • You don’t need a warehouse to stock your products, as result no risk of having to retain stock if product doesn’t sell.
  • You are able to offer varieties of products , also in large quantities.
  • Since it is an online business, you can operate anywhere, any time and can reach customers worldwide

Disadvantages of dropshipping

  • Drop shippers pay little more than retailers who buy in bulk, this makes it difficult to sell your products cheaper (or the same price) than theirs.
  • Some suppliers have additionally retail stores where they sell their products at much lesser prices that you can imagine, this makes it hard for you to compete in the market
  • Problems like delay in delivery, missing items, improper packaging of items, miscellaneous mistakes made by drop shippers could damage the image of your business.
  • You might have difficulty in providing detailed information about the product if requested by a customer.
  • Since drop shippers have lot of sellers using this service, the stock inventory changes daily, this might result in sudden stock shortage causing you a lot of inconveniences if the item has already been purchased.

Searching for dropshipping suppliers?

The first question that comes to your mind when you are thinking of starting a drop shipping business is the kind product you are going to sell. If you have been able to answer this question then the next step is to look for wholesalers who offer this services. Much better will be to contact the manufacturer directly. Alternatively you can use your local directory or the internet for your search.

Beware of fake drop shippers: some retailers tend to offer drop shipping services at high rates compared to that of wholesalers or manufacturers. It isn’t easy to fish out genuine drop shippers, so caution yourself if you are requested to pay dues for the services you get. However it is common for drop shippers to charge extra fees of about $2 to $5 per item, this is to cover the drop ship service you get for each item (for the cost of shipping individual item which is higher compared to shipping in bulk)

Links of some well-known online supplier directories:

  • World Brands
  • Salehoo
  • Doba
  • Wholesale Central