If you are looking to start an online retail business, E-commerce offers some very exciting opportunities. According to reports, the worldwide online sales for 2015 is said to have reached $23.9 trillion, so imagine even owning a tiny percentage of that figure. (How to Sell Drop Ship Items)
Product acquisition plays a major role in E-commerce startups and in this article, I’ll walk you through the steps on how to sell drop ship items online.
What Is Drop Shipping?
In this business model, you are the online retailer and the supplier is the drop shipper. When you sell something online, the supplier will deliver the products directly to the customers. Although you are the one who ‘acquire’ the products, you are not required to stock them up.
You make money from the retail orders after paying what you owe the suppliers for the items and relevant order fees. Ideally, you want to get the products at a wholesale price in order to have a bigger profit margin.
How To Sell Drop Ship Items Online?
Step #1 – Understanding The Legal Requirements
The legal requirement for traditional commerce is no different from an e-commerce. Your web store must be registered to obtain a business license and this process very much depends on which country you are operating from. For example, in the US, most businesses are required to apply for a tax identification number aka Employer Identification Number (EIN) which you can get from the local Internal Revenue Service (IRS) office.
Apart from that, there are other procedures such as sales tax license, online consumer protection, importing/exporting rules and product safety to consider. If you are unsure, seek help from an attorney who can help you through these processes so that you can operate a legal business activity.
Step #2 – Identifying Your Niche
What type of products do you want to sell on your web store? In other words, what kind of niche are you interested in? Drop shipping offers a variety of products from baby clothing to electronic devices, but that doesn’t mean you have to sell everything from A to Z. Within a niche, you can easily come up with 20-30 items to kick start your web store. When you are more specific, you’ll be able to narrow down the product choices and focus on marketing only those items.
To become more profitable, it’s important to find out what products are popular online. You can use Google Trend or a keyword research tool like Jaaxy to get more of this information.
Step #3 – Create an Online Store
Most people who have no experience with the web often find themselves building a store within online marketplace such as Ebay, Etsy or Yahoo Shopping because it is easy. These platforms are not bad, except that;
- You don’t have the flexibility to customize your store.
- Your revenue is subject to certain fees.
- You are faced with tough competition.
- You don’t get a lot of serious shoppers.
In order to build a business brand, you’ll need a personalized e-commerce store and this is best done with online store builders such as Shopify or Prestashop. Alternatively, you can also build your store from scratch by using the powerful WordPress platform, which offers more advantages such as;
- More designs and customization options.
- Free E-commerce plugins that are easy to install.
- More visibility in terms of SEO.
- Great technical support and constant updates from web developers.
If you like to know how to create a WordPress website, visit SiteRubix to learn how to get started.
Step #4 – Search for Suppliers
Once you have your business registered and a web store in place, it’s time to acquire your products. Suppliers can be hard to find online; most of the time, you won’t see their websites on the first few pages of the search results. In order to save time, it’s better to register for an account with product sourcing companies like Doba or SaleHoo.
These networks provide comprehensive catalogs, product feeds and inventory lists to help you with your business sales. Most importantly, it connects you to trustworthy suppliers so that you are getting the best value out of your product orders.
Step #5 – Boost Your Marketing
In order to sell more, you’ll need to get more people to visit your web store. In other words, you need to learn how to drive traffic to your website. There’s search traffic, paid traffic as well as social traffic that you can leverage for your marketing strategy. But where do you begin?
You start by producing good quality content through blogging on your website. Within each blog, you are indirectly ‘displaying’ hundreds of keywords in which search engines will use to index your site. The more frequent this process is being repeated, the more traffic you’ll see coming to your site.
When your content is informative, it will also help to make your PPC campaign more relevant and your social marketing campaign more successful. You’ll find many resources out there that promise huge traffic using certain programs or software. However, do keep in mind that most of this stuff is no longer the standard of online marketing and are often associated with scam tactics.
So, Is Drop Shipping Business Worthy of Your Time?
- There’s no inventory investment on your side so this really cuts down the start up cost and remove all the tedious work that deals with stock supply.
- When it comes to variety, there are tonnes of products out there that you can sell.
- News products get exposed very quickly so you always have something interesting to offer to your customers.
- It’s a great way to start an online business from home.
- With diligent product research and good marketing techniques, you can potentially get tonnes of traffic to your web store and boost your online income.
- There are many fake vendors out there so you really want to establish good communication with them before selling their products on your store.
- Some suppliers can be quite unreliable; outdated supply chain technology and disorganized system are among the factors that can hamper your business dealings with them.
- As the retailer, you have to deal with customer service, so if something goes wrong along the drop shipping process, you have to bear the responsibility, not the supplier.
- You are fully in charge of your own product marketing. Although if you join product sourcing site, they might offer some basic training.
- The E-commerce world is VERY competitive; everywhere you look, some retailers are going to offer products at much lower prices that yours.
As you can see, this business model isn’t all bed of roses, but that doesn’t mean it’s not possible. If you are looking for a less hassle business start-up, why not consider affiliate marketing instead? There is no need to source for suppliers or provide for customer service. Just send customers to a merchant’s site and earn a referral fee from it.
This awesome training program will show you exactly how the process works. So do check it out.
I hope this article has given you some good pointers to consider about selling drop ship items online. If you need to know anything else, just leave me a comment below and I’ll get back to you.
“You can’t just open a website and expect people to flood in. If you really want to succeed you have to create traffic.” – Paul Graham, YC
You may also want to read;