Drop-shipping - a great way of making money online
By Nowshade Kabir ©Rusbiz.com
Using the Internet to sell products and services to ever increasing number
of net users is a good way to start your own business. If you are not taking
advantage of this great opportunity you are just missing the boat! Consider
this: e-commerce, contrary to popular believe, is thriving and increasing
at a double digit growth rate. According to Jupiter Research, Online sales
during this holiday season in United States are expected to reach $21.6 billion,
a 19 percent increase over the same period last year. Jupiter also predicts
in the report that 86 million U.S. residents will make holiday purchases online
this year compared to 73 million last year, which is an 18 percent increase.
No doubt that this is the right time to get into online business. Building
a website for selling products or services is no longer that difficult. You
can make your own website by using available sophisticated but easy-to-learn-and-use
programs like Macromedia Dreamweaver, Microsoft Frontpage, Adobe Go live,
etc. There also exist various online web store builders similar to Rusbiz.com,
which allow you to create powerful web stores using simple editors and numerous
templates. You can also setup a store with E-bay and sell products through
it. Finally, you can hire professional web designers to develop your website.
So, the important question is not how to get online, but what to sell on the
In one of my articles – What
to sell on the Internet? – I wrote about selling information products.
Although this is an interesting concept, you might think that this is not your
cup of tea; and you still prefer to work with some tangible products. In ideal
scenario, probably, you want to sell a product of your choice but don’t
want to carry your own stock and don’t want to handle the shipping. Is
there a way of doing this? Yes, there is! It’s called “Drop-shipping”.
What is drop-shipping?
When a manufacturer, wholesaler, distributor or importer, after receiving
an order from their retailers, individually pack and deliver the product to
the customer of the retailer with retailers address as shipper, this selling
technique is called drop-shipping.
The advantages of drop-shipping include:
- You do not have any inventory. So, there is no stock
carrying expense involved.
- You pay for the item only when it is sold and you
got paid from your customer. You don’t need to invest money in buying
- You can sell just one item at a time. No minimum quantity
- Your drop-shipper will supply you with necessary product
image and specification. You don’t have to spend money on creating
- You fix your own selling price of the product. Convenient,
when you know your niche market well.
- You can offer various products on your web store from
Select a product to sell
Once you decided to go with drop-shipping you need to find products to sell
and find drop-shipping suppliers for those products. According to the same
report from Jupiter following are the most favorite categories for online
shoppers: Books – by far the most popular category, after that comes
clothing and shoes, music, toys, video tapes and DVDs, gift certificates,
consumer electronics, accessories, videogames, bed and related items, and
bath items. You should also consider that this year, total Internet
sales of consumer electronics are expected to rise 32 percent to $7.5 billion,
making it the fastest growing group among all retail sales categories online.
The market research wizard developed by Worldwide Brand Inc. is a great tool,
which shows in a probability scale whether it is worthy trying to sell your
selected product online or not.
You can find it over
Locate drop-shipping companies
After selecting the product the next step is to find a reliable drop-shipper
for it. This might not be an easy task! The things that you should look into
a drop-shipper are the followings:
- A reputable supplier with drop-shipping experience
- Ready to ship one item at a time
- Do not ask for any membership payment
- Will use your name as shipper
- Will enclose blank invoice or invoice from you
- On the packaging there will be no indication that
they are the supplier.
You might think that the easiest way of finding a drop-shipper is just to
buy one of the numerous lists on the Internet for sale. I won’t recommend
you to use them for number of reasons. Often, these lists are outdated or
carry wrong information. Even if you find the companies through the lists,
since many people use these lists, you get into fierce competition for market
share not even starting to sell.
Use the following approach instead:
The first step is, naturally, to use the search engines. Using various combinations
of the keywords of your product with words: manufacturer, wholesaler, drop-shipper,
dealer, see if you can find the original source of the product.
If several online retailers are already selling this product, do some detective
works! Check out the sites thoroughly. May be, you can find a clue, which
will help you track down the supplier.
If it is an imported product go to the sites like Alibaba, ecplaza, Rusbiz,
trade-india. Locate the manufacturer and get in touch with them to find who
you should contact in your country to retail sell their products. If the product
is manufactured in North America, the best source to find them is Thomas register.
You should definitely attend the trade shows related to your category of
products. This is an easy way to find a number of suppliers, who might be
willing to work with you.
Trade journals and publications are also a good resource for finding suppliers
of your products. Although, you might have to go through a sizable quantity
of them before you stumble on the right supplier.
Drop-shipping has some inherent drawbacks too. The biggest of them is you
have to totally rely on the drop-shipper to fulfill your order and get the
product to your customer on time. The others are: you don’t have any
control over the price or availability of the product. However, a good drop-shipper
cares for his reputation since his business depends on retailers like you.
That’s why you have to be very careful in choosing the right drop-shipper.