What is dropshipping and how can you make money from it?

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The Internet has made it incredibly easy to start and run a retail business. The best part is, you do not even need to buy and store inventory, thanks to a business model known as dropshipping. 

Around 20 – 30% of e-retailers use drop shipping services. If you are planning to make money from the comfort of your home, dropshipping is the way to go. The business model of some of the biggest retailers in the world like Amazon is based on dropshipping.

What is dropshipping?

The reason why drop shipping is an amazing business opportunity is that it allows you to sell any product you want that too in any niche. For example, you will find products belonging to every niche on Amazon. If an item is available for sale on Amazon, you can sell it on your dropshipping business website.

There are various benefits of selling somebody else’s products. It saves you the hassle associated with traditionally running your business. You don’t need to worry about:

  •         Sparing room to store your products
  •         Packaging and shipping the goods
  •         Putting down money upfront to purchase wholesale products to resell

If you don’t like taking risks but want to start a business, drop-shipping is your call. This business model can save you the potential loss of up-front investment. Apart from that, you don’t need to care about renting a commercial space, hiring people to work for you, or getting a physical location to be at for regular business hours. You can also find a lot of information on how to run a dropshipping business through some online courses. I have reviewed some on my blog, like this Dropified review here.

How to make money with dropshipping?

When you start a dropshipping business, you connect with a wholesaler or distributor that has been offering the respective service. Keep in mind, not all vendors offer drop shipping services, but many do.

Here is how you use drop shipping service the right way to make money:

  1. Get online:

You are in charge of the marketing aspects of your business. This means you need to create an online presence that sells. There are various ways to create your online presence. You can

  •         Create a website with a shopping cart
  •         Create a virtual storefront with Amazon
  •         Use social media as a marketplace for your business.

You can market your business by writing a blog, through social media posts, and email marketing. There are various ways to connect with your prospects and customers. Learn some marketing and selling skills before you start marketing the goods you want to sell online.

  1. Sending out products:

Drop shippers come into the picture when it is time to send out products. The items your customers order come from the drop shipper’s warehouse. You place the order with the drop shipper when you receive them and pay the wholesale price for each.

The way you communicate with your drop shipper depends on his preference. You can submit your requirements online through email or a spreadsheet file. We would recommend you stay consistent with whichever mode of communication you choose. Once you have figured that out, you can focus on the marketing aspects of your business.

  1. Shipping:

The drop shipper will put the order together without mentioning the price details or his name. This way, the customer will think that they have received the package directly from you. However, keep in mind that you need to pay a commission to the drop shipper for this service. This amount is referred to as drop-ship fee or handling fee and is about $2 – $5. Keep this fee in mind while pricing your products.

You can negotiate a lower handling fee with your drop shipper if it doesn’t suit you.

How to pick the right drop-shipper?

There are various things you need to consider while picking a drop shipper to work with. Some of them include:

  •         Know how long it takes for them to process and ship the orders
  •         The available shipping methods
  •         Do they have a tracking system?
  •         How do they deal with issues like lost shipment?
  •         Do they offer guarantees and warranties on their products?

Wrapping up!

If you are planning to start an online business without putting much of your investment at stake, you should try dropshipping. However, make sure you are familiar with everything you need to know before doing so. 

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