Understanding Drop Shipping
Imagine, for a moment, that there’s a cobbler named Bob. Bob has a bunch of shoes that he wants to sell as a byproduct of his shoe repair business. If you wanted to act as a middleman between Bob and his internet customers, how would you do so?
The traditional warehouse method would involve you purchasing shoes from Bob, holding them as inventory, and then shipping them out to customers yourself. This requires a lot of capital from you, however, and you can wind up with a bunch of shoes that nobody wants to buy.
Under the drop shipping model, you don’t buy shoes from Bob until customers buy them from you. When they do, you have Bob ship them directly to the customer.
Your margins are a bit lower, but you don’t have to worry about inventory, finding and packaging orders, or renting a warehouse. This means you can start a drop shipping business from your home with a relatively small amount of money.
Low Requirements, Easy Scaling
Very little capital is required to set up a drop shipping business. You don’t buy products until after a customer orders them. This means no money spent on inventory, no overhead from warehouses and no paying employees to help pack and ship orders. You can get a drop shipping business up and running on less than $1000 with cash left over.
Normally, if your business grows, your work grows as well. As a drop shipper, you’re responsible for maintaining your storefront, advertising and promoting your store, and handling customer service issues. No matter how big your business gets, advertising and maintaining your store will be pretty similar.
You’ll get more customer service issues as you get more customers, but that’s it. You won’t have to worry about handling enough inventory to meet increased demand or suddenly having to ship out twenty thousand pairs of shoes. All of that work is done by someone else.
Finally, drop shipping doesn’t require anything specific from you. You don’t need any formal education or training. All you need is the drive to succeed, a bit of start-up cash, and the knowledge of how to find and exploit a drop shipping niche — and we can help with that.
Why Isn’t The Market Saturated?
Drop shipping isn’t exactly hidden and there’s a low barrier to entry. There’s quite a lot of competition. For some products, it’s totally not worth it setting up a drop shipping business — there’s an established competitor who can beat your prices while offering better customer service.
This is NOT the case for every niche. If you’re willing to do the right research, you can find plenty of products that you can sell at reasonable margins on your drop shipping storefront. Over time, you’ll build a relationship with your suppliers and figure out where you can get quality products the cheapest. This will help you keep your customer service costs low and make your margins even higher.
Complex Problems To Solve
Just because you don’t have to hold inventory doesn’t mean you don’t have to deal with it. As your business grows, you’ll source products from multiple suppliers. This can start to cause headaches in a couple of ways. First, you still have to keep track of your supplier’s inventory — if you’re selling Bob’s shoes and he only has 80 left, you can’t sell a hundred shoes without finding another source.
When you start using multiple suppliers, shipping gets complicated. A customer might want two of Bob’s shoes, two of Bill’s shoes and four of Brian’s shoes. How do you deal with the cost of shipping three orders? If you pass the cost along to the customer, they’ll think you’re massively overcharging them. We can teach you techniques and offer tools to help manage these problems and make your drop shipping business successful.
The Big Payoff
Drop shipping exploits one of the most basic economic principles to make money. You buy low and sell high. By inserting yourself between a supplier and their would-be customers, you keep everyone happy: your customers get their items, your supplier doesn’t have to deal with advertising, managing a storefront or dealing with customers, and you get paid.
How much? Building your business takes time, but drop shippers who stick with it and put in the work can make upwards of $10,000 a month within a year of starting their business. Successful drop shipping businesses can be sold for values well north of $700k. In other words, if you grow a business, manage it well for three years and then sell it, you could do really well.
The best part of all of this is that it takes very little time from you. After setting up your storefront and doing some SEO and advertising work, you’ll only need to spend a couple hours a day dealing with customer orders and support tickets — and you can pay someone else for that!
Avoid Rookie Mistakes
Lots of people start drop shipping businesses. Few succeed. We can help you avoid common pitfalls and get started on the right track. Here are some of the things we teach:* How to find suppliers* Why you should build your own storefront and not sell on eBay or Amazon* How to build and maintain an eCommerce website* How to advertise your products* How to find a niche products that sells* How to collect and analyze customer data* How to manage customer support issues*
How to handle inventory from multiplier suppliers* What to look for in a good supplier* How to build a brand… and much, much more! With all of this knowledge under your belt, you’ll avoid the rough rookie start and jump straight to the path to success.
Build Your Business Today!
Drop shipping is a great way to turn a small initial investment into a profitable business. While it requires some work and research to set up, your drop shipping business will take very little of your day-to-day time to maintain.
Without having to carry inventory or ship products yourself, you can scale your business up to handle millions of dollars of sales and make hundreds of thousands of dollars in profit from the comfort of your home. The tools and techniques we offer will teach you how to find a niche, set up your storefront and handle the unique complexities of the drop shipping business. The sooner you Check Out our Resources, the sooner you can build a successful business and start making a profit from anywhere in the world.