Home Business Insights & Advice How to start an online business using drop shipping services

How to start an online business using drop shipping services

by John Saunders
25th Mar 19 10:15 am

Are you considering starting an online business without the stress of owning a store or shipping your products? If you answered yes, then you are in the right place. In this article, we will tell you how you can start your online business without any hassle by using drop shipping services.

So, what is drop shipping?

It is a supply chain management method where a retailer doesn’t keep an inventory but instead shares the customer orders and delivery details to a wholesaler, another retailer or the manufacturer, who then delivers the products directly to the client. Most retailers make a profit on the difference between retail and wholesale price. However, some get a certain percentage of the sales in commission paid to them by the wholesaler.

According to industry watchers, about 20 to 30% of online retailers use drop shipping today – meaning, drop shipping is a proven business model that’s worth exploring. Even top retailers like Amazon use drop shipping. What’s best is you can sell just about anything in any niche – minus the hassles of traditional business like:

  • Product storage – it’s expensive to buy inventory and also rent a warehouse space.
  • Packaging/shipping products – prepping orders and boxing them up several times every day and going to the post office to send them
  • Investing initial capital on inventory that you are not sure will sell

Drop shipping negates all these problems and potential pitfalls.

Starting an online business using drop shipping

Pick a niche.

As stated earlier on, there is no limit to the type of product you can sell using drop shipping services – you only need to identify one that’s appealing to impulse buyers with disposable income, generates handsome profits and that you are passionate about. You can also choose to create your brand, but in the end, you should ensure that people are actively searching for the product and that it isn’t readily available locally.

Do some market research

Ideally, you want to find a product that has lots of competition, because this translates to high demand. It also shows that you will be able to sustain the business model.

Find a reliable supplier

A supplier can make or break your business, so you want to find a good one for that matter. Take time to do your research to identify reliable one and matches your needs. Since they are likely to be overseas, the importance of clear communication cannot be overemphasized.

Create a simple website

Creating your website is an excellent place to start. You don’t have to go for the sophisticated designs that cost an arm and leg. A simple e-commerce site like Shopify will do the trick. You can then upgrade once your business picks up.

Market yourself

Go out there and market your products to potential prospects. You can do so through your site or social media channels like Facebook, Instagram, Twitter and so on. Word of mouth can also be a great tool to inform your clients about your products.

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