What Is Drop Shipping?
Drop shipping is a very popular business model used by many online businesses. This model allows a business to purchase the merchandise individually from wholesalers/manufacturers and have it shipped directly to customers, without holding any inventory. This is a very convenient and low cost model for people just starting out with a small business and don’t have much capital to spend.
When ever a customer purchases merchandise from your online store, they are paying the recommended retail price. The business owner makes a profit from the difference between what they charged the customer and the amount they paid to the dropship wholesale companies that stock the items.
Two Types Of Drop Shipping
1) Straight Drop Shipping
Straight drop shipping means that suppliers do not hide their identity from your customer. So your customers will know exactly where the goods came from. Some suppliers use this method to either promote themselves or they may not be opened to changing their packaging or branding just to suit a drop shipping service. This method would suit resellers who do not want to provide warranty support directly or where repeat sales are not crucial.
2) Blind Drop Shipping
Blind drop shipping means that the supplier hides their identity from your customers so that the merchandise appears to be shipped directly from your business. This is the ideal method for most online stores. It also means that the reseller is the direct contact for any issues with the merchandise.
Drop Shipping vs Bulk Buying Profit Margins
Profit margins vary depending on the products you are selling. But, in general, bulk buying from a manufacturer/wholesaler will allow you to have higher profit margins compared to using the dropshipping model.
Business owners who have established their online store to a stage where they are making some good and consistent returns on their business with the dropshipping model can consider investing that money into bulk buying their products and sell individually to make a higher profit.
5 Benefits Of Drop Shipping
1) Low Cost
Not having to buy stock for your business means you’ll save money for starters, and you also don’t need to rent any space to keep these items. It is hassle-free! You don’t need to worry about handling and shipping items as this is taken care of by the drop ship wholesale suppliers that you have partnered with.
All you need is to have a good quality website, market the products, offer/add value, and deliver good customer service!
2) Promote More Products
There are plenty of wholesalers who participate in this drop ship model. So you can promote many products on your own online store and make money.
No need for a traditional bricks and mortar business or a warehouse. You can sell online. Well known online stores like Shopify, Ebay, and Amazon are using the drop shipping model.
4) Reduced Risk
Since you are not required to buy stock, you are not stuck with any inventory that can’t sell. If the items are not popular with customers, you can simply just remove it from your website and market another product.
5) Not Labor Intensive
Since you are not manually fulfilling customer orders, it frees up your time to concentrate on other important things to grow your business.
Disadvantages of Drop Shipping
- Not every wholesaler/manufacturer may like or participate in the drop shipping model. So this will limit your choices.
- Not all dropshipping wholesalers are reliable. Issues might include delay in delivery times, fulfillment errors, or out of stock items. These things can cause frustration to your customers.
- There might be scammers trying to take advantage of vulnerable people. Make sure that wholesalers you are dealing with are legitimate businesses, so do your research.
How To Find Reliable Drop Shipping Wholesale Suppliers
If you are new to this drop shipping model, one of the best ways to avoid being scammed is to partner with certified drop shipping wholesalers.
There are places where a wide selection of verified drop shipping suppliers are listed and available for anyone who wants to market their products.
You can find real drop shippers at Worldwide Brands. To read my review, CLICK HERE!
Tips To Find Wholesalers With Google
1) Dig Deeper
When you do a search on google, ensure that you go through many listings (10+ pages) because not all wholesalers and drop shippers will appear on the first page.
2) Looks Can Be Deceiving
Not every supplier will have a good looking website. An ugly website doesn’t necessarily mean a poor quality supplier.
3) Use variations of search terms
Don’t just do a search on a single word such as ‘drop ship suppliers’. Use a variety of words to get as many relevant results as possible.
Starting an online business with a drop shipping model is a very easy and convenient business to set up. But you need to find reliable wholesalers/manufacturers who will partner with you to participate in this strategy. If you can’t find a supplier for your chosen niche, perhaps you can do some negotiating with suppliers that stock your niche products and work out some kind of deal with them.
To make any business successful, hard work is required. It takes time to build a long term sustainable business!
Do you think drop shipping will be something that you would like to try? Please leave comments below.
Remember to SHARE and SUBSCRIBE to keep updated with articles.