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Dropshipping To Make Money Online

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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

1ShoppingCart for easy ecommerceHowever, 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.

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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.

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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.
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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.

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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”.

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The book is full of business wisdom that any entrepreneur can learn from.
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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.
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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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  4. How To Outsource e Commerce Using Fulfillment Services?

  5. Five Practical Ecommerce SEO Tips

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.
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**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.”

10 comments to Dropshipping To Make Money Online

  • Nice topic! Dropshipping has its own pros and cons, but if you know how to take advantage and pay attention to the profit margin, you are on the winning side.
    Korey recently posted..buy my car

  • Kelly Zarate

    I use both dropshippers and wholesalers for my estores. For dropshipping, one very important thing to consider upfront is the margin, when you compete with many other etailers, your products have to be high in quality and low in price, bear this in mind when you search products.

  • Let’s be real here people. Everyone wants to make money, especially on the internet, as quickly and as fast as possible.
    Who wants to spend time, spending valuable time, writing hundreds of articles or blogposts?
    That’s after you have to set up your blog or website and then try and get traffic to that site hoping that some of that traffic will actually buy some of the stuff you are promoting.
    TIMECONSUMING!!! The reason you are trying to earn something on the net is because you are tired of the daily grind.
    You might eventually make some money, but at what cost to you? Spending MORE money and MORE time? I don’t think so.
    Don’t get me wrong, blogging or writing articles can be very rewarding, but the people who are making a lot of money doing this often take months,
    some ven a year or two to finally achieve their goals. Some never do. Plus seeing your stuff published and people reading and commenting on it is a
    reward itself. But to achieve financial independance this way is a long and often tedious quest. That’s also if you are any good at writing.
    If you are not blessed with a talent for writing or don’t have quality content its’s hard to attract people to view your site.

    THE QUICKEST AND EASIEST way to make money is TRADING STOCKS. Save yourself time and frustration and learn how to trade in stocks and/or currency.
    Like any business endevour you HAVE to invest a little time and money though, but it will be worth it in the end. And it won’t be even half the time you need
    to invest in blogging.
    It’s not difficult to learn and you won’t spend your time writing articles or promoting other peoples products.
    The best way to start is to find a system of investing.
    Even Warren Buffet has a system. Luckily he is not the only one with a system in place for investing and earning a lot of money.
    There are plenty of systems available that can help you make money in the quickest possible amount of time. Do your research though.I have managed
    to find a system that works for me. I did spend money on it though, and so far I am making between $500 and a $1000 dollars a month extra.
    I have not quit my job yet, but in time, and as I get better at it I will. Trust me people the stock market is the way to go!

  • Irrapsret

    In spite of lower margin of drop shipping business model, I love its offer of less hands on, more free time. The point is to find the right product.

  • Tony

    I just started a small e-store for oriental products, it is not that easy to find a good reliable suppliers unless you call them and make a trip to visit them in person. Drop shipping directly from manufactures involves tons of work. Not so easy.

    • Hi, Tony
      You can go in person to check out or maybe just order some products yourself and see how much other fees will be added to your end customers. There are some pretty hefty fees associated with importing, so dropshipping directly from say, China may not be very feasible. Search for domestic dropshippers, sometimes they can give you a better price. You can wait till you have a lot more sales to import in bulk by yourself.
      Susan Wowe recently posted..WordPress Plugin: Social Networks Auto Poster

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