08Jul
Dropshipping guide
By: rise_admn On: July 08, 2016 In: Shopify For Newbies Comments: 0

Dropshipping Is a way to sell products. That means you do not have to have inventory of your own piled up in your own store/house. Instead, each time you receive a new order in your store, the order will be fulfilled by a third party.  A third party is a seller that has the stock in their warehouse and will ship the product to your customer for you.

The main advantage of dropshipping is that you don’t need to buy a bunch of products, waiting for them to sell and then ship them out. You buy only after a sale has taken place in your store and your fulfillment centre sends them out on your behalf.
How to setup a dropshipping business

Advantages:

    • You pay for products only after someone places an order on your store.

    • You can carry a greater variety of products as you don’t have to invest a lot of money to buy stock to keep on hand. The products are held by the third party. Once your customer places the order, you order the same product at a lesser price than you have sold it and make a profit.  It is important to keep in mind that you have done all your research to know where to find the product you are promoting and that it is in stock.

    • Low cost to open an online store. The initial investment to set up a store is usually under $100 for the domain and building your site.

    • Manage your business from your home, or anywhere with an internet connection, on your laptop.  “The Laptop Lifestyle”. All your business can be managed from your laptop.

    • Carry a wide range of products in your store. You can upload any products you desire to your store. There is no limit to the products you can carry.

Disadvantages:

    • It’s important to choose the right niche. Either choose a specialized area where there is little competition and then know your market or choose to carry a wide variety under a general store.  Keep in mind if you are featuring popular products there is a lot of competition so reaching a higher margin with good profit will require more research.   

    • Always test your suppliers – buy the product you are going to sell to experience for yourself how long the shipping is, what the quality of the product is, how easy it is to return the product.  You want to be sure your customers are going to get great product and service and you will be relying on your supplier so make sure you know them well.

    • The stock is out of your control. Sometimes the seller won’t have the product in stock you just sold and then you will need to start searching the product from other sellers.

    • Some customers may order 3 items from your store. Those 3 items could be available from separate suppliers. You will need to pay for the shipping 3 separate times and your customer will get 3 different packages and probably not at the same time.

Conclusion:

Creating a dropshipping business can be very profitable despite the possible obstacles.

In any business,  the first year brings challenges. The main advantage with a dropshipping business is the low entry cost.

You can easily create your store, run it for 6 months and if you find it is not at all profitable you may have to change your niche or start a whole new store.

It’s very important to keep learning and improving your skills, never give up!  There are thousands of examples of successful stores.  It is just a matter of testing and trial and error until you find the winning combination.

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