Every New Year brings many new business ideas and plans with it. This 2011 has also arrived with many new business options. Won’t it be great that in just few steps you can own a new dropship business?
Drop shipping can be considered as an effective and easy way through which you can involve in the ecommerce. Dropship business is a Supply Chain Management technique. In Drop shipping the retailer does not store the goods in stash; instead the retailer deputes the customer’s demand to the wholesaler or the merchant who then directly ships the goods to the patron. Every one of you must be aware of a well established dropship website – eBay that is commonly used by the drop shippers across the globe. Here we have summed up the basic steps that you can use to start your dropship business.
But before starting with these steps let us first learn something about the background of the dropship business.
The basic concept behind print on demand for beginners business is that you can sell the products directly without purchasing them first. The wholesale drop shipper provides you the services and helps you in drop shipping in following ways:
* They allow you to directly sell the items without storing them.
* They also help you in preventing the risk of money on items which you are not sure about
The drop shippers charge some fee from you for their drop shipping services. They include their fee in the cost they charge from you for your product. It has been found that generally the drop shipping charges range from $2 to $5 per item. Thus you must carefully choose your drop shipping product which can be more profitable to you than the other.
Here are some suggestions that you can use while drop shipping:
* You should prefer the rear brake lights for late Honda Civics model.
* Go for the products that have low-volume sell-through rates and high profit margins.
* Avoid the deals that involve the large competition because such deals makes keeping up in a competitive market really tough on sellers who are drop shipping.
Now we should put some spotlight on your 5 Step Guide that can help you to start your dropship business.
Step 1: search for a supplier!
To start with the dropship business you should first find some possible suppliers. The SaleHoo Directory can be helpful to you as it consist of the list of almost all reputable sellers that have large stocks of many different products. The Wholesale or Suppliers sections in the Yellow Pages can help you to find the local suppliers. Find the experienced suppliers that can help you to earn more profit. Few things must be confirmed from them before finalising the deal:
* Time span of the for the shipping of the order after placing the order with them
* You must confirm about the shipping methods that the dropship suppliers offer i.e. which courier company they will use for international suppliers.
* You must ask them about their standard and quality control systems.
* Whether they are offering any warranty to you or not.
* You can use their product pictures for any of your dropship website or not?
Step 2: selection of the product from your new supplier’s range
If you exactly know what you want to sell then it could be your first step. Pick out your items from the suppliers product range accompanied by the market research. There are few sub-steps for this:
* Visit the eBay.com or any dropship website of your interest.
* Click on the “advanced search”.
* Thoroughly check the “listings box”.
* Enter your keywords & choose your category and then click the search button.
* Now go through the listings & compare the number of successful listings (listed in green), compared to the unsuccessful ones (listed in red). You can be sure about the product as soon as you find the one that sells 60% or more of the time.
If you don’t find your desired results then again start searching the same product under different key words and categories.
Step 3: getting a tax ID
Before starting the business some wholesale dropship suppliers need you to have a tax ID. US or Canada residents require a sales tax ID (also known as retail or resellers license, tax ID, resale number resale certificate or vendor’s license). Thus you must mention your supplier about that and you have to fill a separate form also. Getting a tax ID is an easy process. You can apply it at your local county clerk’s office or online – just Google “[your state] + sales tax ID”. But in case of sales tax ID you must be a business organization as well as you must also have a Federal Tax ID number.
Step 4: selling platform must a chosen
Nowadays except eBay there is a long list of other dropship website available on the internet where traffic of suppliers & buyers is increasing day by day. Some of these websites are even cheaper than eBay; you can select any preloaded website of your choice. The sites like Bonanzle.com, Ubid.com, Amazon.com and Wholesale2b.com also provide a large market with a wide range of different products. You can even start the business by launching your own ecommerce site.
Step 5: managing your lists
You must list your items in a proper manner as if you have the stock on hand while drop shipping. While you sell the items on any of the dropship website you must give the full details and the location of your item in your listings. This can be best explained with the help of the following example. Suppose your supplier is living in Germany then it must be specified in your listing so that buyer must have the idea that the shipping time can be longer than the expected one. You must be aware that the policies for the drop shipping orders is slightly different then the common wholesale orders.