Dropshipping is proving to be big business as increasingly customers seek to use selling sites like eBay and Amazon to buy goods by using a dropshipper. Everyday goods prove to be the most popular with sale categories such as health & beauty, sports equipment, phone accessories, household and travel products generating the most revenue.
Dropshipping has sought to meet the demand of consumers and bridge the gap between manufacturer and consumer. The dropshipper acts as a middleman who sets up a shop and promotes its goods through various frontend selling sites. The dropshipper can promote specific brands for which he has an agreement to do so with a particular manufacturer. When an order for an item is placed on their online shop, the dropshipper processes the paperwork with both manufacturer / warehouse operative (backend) and customer (frontend) to facilitate the process of dispatch and delivery of the product. The online shop will take payment at retail price for which the dropshipper then pays the manufacturer the wholsale price, the dropshipper is then left with the profit difference. Throughout this process, the dropshipper doesn’t ever handle or see the product.
So how can a dropshipper work successfully?
Providing this kind of online shop service offers a lower risk strategy to the dropshipper as there is no need to buy, carry and store stock. The key to ensuring that this method works successfully is to find the right manufacturer and wholesale suppliers. Key aspects such as only selling accredited goods and drawing up a timeframe contract with the wholesaler as to when products will be dispatched will ensure customer satisfaction, whilst at the front end be clear to consumers on postage options and when products will be dispatched.
Offer a fair retail price and do not undercut yourself. Remember that although your costs will be relatively low, you will still have some costs to factor into your price after you have paid the manufacturer. Office overheads, online market fees, dropshipping insurance and your time all need to be accounted for over your yearly takings.
Before selling a product at least purchase a sample. By ordering a sample of each of the products you wish to sell will enable you to handle and test the product to decide if it’s good enough to sell. Again it is your brand that is at stake so the product, make sure that the product is presented well and operates in good working order.
Implementing drop shipping insurance will allow enable you the business owner to evaluate the processes in your business and protect your company against any liability whilst goods are in transit. To find out more about becoming and operating as a dropshipper please see our drop shipping page further information on.
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