Dropshipping is an e-commerce model that has a lot of benefits. With dropshipping, an e-store owner can sell physical goods online without shipping, handling, or buying and storing the inventory in a warehouse. The dropshipping e-commerce model can save you upfront investments as well as lower business risks associated with inventory and cashflow.
How does dropshipping work?
You open an eCommerce store to market some products, customers order products from you and pay the higher price you charge, and you order the products with a lower price from dropshippers. They can be wholesalers or manufacturers. They charge you with a lower price and directly ship the products to your customers on your behalf.
Many dropshippers can ship out products for you “blindly”, which means they can conceal their involvement so customers only see your information on the packages.
Pros and Cons of Dropshipping
However, there are complaints about dropshipping e-commerce model being a “too low margin”. This must be true for some products or niches. The solution to fix this is to spend time finding higher-margin products to market, which is not as easy as it sounds. The margins have to be high enough to factor in a good CPA while making the prices still competitive. Without planning these cautiously at the start, the business can be killed in its infancy.
In order to enjoy all the convenience and benefits (saving time, money, workload, inventory, etc.) dropshipping can offer you, doing thorough research to find the right niches and products is a must. This research alone could be one of the most time-consuming activities for any e-commerce owners who look for real success online.
Dropshipping books from Amazon
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Amazon is the largest retailer online. Don’t set your goal to compete with Amazon or any other big names. It is not going to work for any small business. However, Amazon can not cover every niche, or every niche within a niche. This is where time should be spent researching appropriate products.
One big benefit of dropshipping is its “easy to scale” feature. You can always start small with a focus on testing out the market. Dropshipping can provide a great variety of collections to choose from without purchasing and stocking them in the first place. You have minimum risk when testing out the market. After the initial research, you can choose some products to be listed on your e-store and see how your customers react to them. Once you are convinced that some high margin products have good enough demands, it is time to scale it up by increasing your ads investment to bring in more traffic, or by expanding the variety of the similar products.
One drawback of dropshipping though is when customers order multiple products from several suppliers, the shipping cost will go up and the packages will be delivered separately. If a customer asks for a refund of an order involving several vendors, the process will be troublesome.
How to choose products for dropshipping?
Will the weight of products matter for successful dropshipping e-commerce? I don’t have e-stores carrying very light and very heavy items for comparison, but this is what I observed online.
Normally eCommerce owners prefer to sell lightweight goods with a maximum weight of 10 lbs. This is very easy to understand: If an item costs $10 with a shipping cost of $45 due to its huge weight, it is not going to be appreciated by online customers.
However, selling heavy and bulky items such as furniture online can usually cut down on shipping costs for buyers, because the retailers’ marked-up shipping fee is eliminated, as well as the extra delivery fee from a retailer. Among furniture, for example, beds are one of the popular bulky items ordered for dropshipping.
Is there anyone buying, say, toilet paper online? These customers are probably scarce. Don’t choose commonplace products that everyone can easily buy from a local store. This is a lesson learnt from the failures of many e-commerce start-ups during the dot-com crash such as Webvan or Pets.com, unless you have the skill and willpower to repeat the story of “Quidsi”.
How to choose distributors/suppliers?
Your ecommerce reputation depends on your dropshipper’s customer service. A good way to test the water is to order some products yourself first to see how they perform the shipping and handling. The customer service to retailers like youself is also important. You want quick and professional reactions to your orders and inquiries from dropshippers. Also, it is just as important to find out if the supplier constantly updates their stock status; you should be able to know which product is out of stock so that you don’t take orders from customers.
Important: In order to protect your margin, make sure the distributor you use is not just a middleman, who has to reorder from another dropshipper.
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Dropshipping is a great way to make money online. The best way to have a share of this money-making method is to start your e-store right now and learn your way through, because one of the good part of dropshipping is low overhead. What can you loss then?
As for the platform to use for your eCommerce, there are several big players to choose from. You definitely should investigate Bigcommerce as it offers great flexibility including a website, shopping cart, SEO, design, hosting and many more useful features. Use “try it for free!offer to get your dropshipping e-commerce started right away with no risk.
Another equal-weight player in the field is Volusion. It is an all-in-one eCommerce solution for small business owners. According to its statistic, Volusion has helped over 40,000 eCommerce owners launch their successful online business, and the number is growing steadily. Volusion has a 14 days free trail for eCommerce newcomers.
There are people choose WordPress for their e-commerce platform. There are pros and cons for this option. You can check out the details here.
**Disclosure of Material Connection:
Some of the links in the post above are “affiliate links.” This means if you click on the link and purchase the item, I will receive an affiliate commission. Regardless, I only recommend products or services I use personally or believe will add value to my readers. I am disclosing this in accordance with the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials.”