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How to Make Money as a Dropshipper

By on March 20, 2013 in Tutorials with 0 Comments

You may have asked yourself ‘How can I make money on the Internet?’ or ‘How can I make money with eBay or Amazon?’  In this article I will cover the steps you need to take in order to become a successful internet seller and how you can make money online.

What is dropshipping?

I’m not entirely sure of the origins of dropshipping.  It may have been a child of the internet or it may be a natural extension or replication of what a lot of larger companies do to fulfil orders delivered to home addresses.  Whenever and however dropshipping started there is no doubt in my mind that dropshipping and eCommerce, if done right, are a match made in heaven.

Dropshipping allows a credible individual to open an account with a supplier who will, foregoing the promotion of their own business, fulfill single and multiple orders of the customers of that individual.  This means that you could open an account tomorrow and within a day of two be sell products online and making a profit without the need for expensive premises, stock, insurances, employees and packaging materials.  I’m sure you can see how beneficial this arrangement can be to both parties.

Below is how that process would work:

  1. You open an account with a Dropshipper
  2. You create your online store
  3. Customers purchase items from your store for X
  4. You place orders with your dropshipper for Y
  5. Your Dropshipper fulfills the order
  6. X minus Y equals your profit

If you make the right and informed choices along the way your running costs will be very low and so dropshipping makes becoming an internet seller a really viable option.

Customers

It doesn’t matter what type of business you run either online or offline you need customers in order to make money, build your business and ultimately make a profit.  There are many ways in which people arrive at the point where they want to sell products online.  Some people have a passion for a range of products and they are passionate about selling them to the world, some people already run a business and see this as an extension to their existing model and some people just want to make money selling great products at a competitive price.

If you have an existing business or a passion for a range of products its a fair assumption that you already have a supplier and a market so you just need to understand how to start selling online and how to attract more customers.  If however you don’t have either of these you will need to find a supplier and a market.  I my experience finding a market is easy finding a good supplier is a little more difficult.

Suppliers (Dropshippers)

When I ran eCommerce stores I would always focus on finding a niche or a market that I was interested in being involved in.  I think it helps if you are interested in the products you are selling because it makes the whole experience even more enjoyable.  Once you have a few ideas about what you are interested in selling look up a few of the Wholesale and Dropshipping Directories and see if you can find a supplier https://www.esources.co.uk/ is a great directory that I have used many times.

When looking for suppliers look for those that specialise in the products that you want to sell and that they provide an extensive range.  If you are building a business around this supplier you don’t want to have to have 10 different suppliers just to provide a good range of products you need one or two great suppliers.  Once you are established you can then start looking for other suppliers but initially keep the number of suppliers to a minimum.

Speak to them!  Don’t do everything over the internet.  Remember this is your supply chain, the heart and lungs of your business and you don’t want that to be a 14 year old kid in his mum’s basement.  Once you have built a relationship talk to your supplier about how they will help you sell their products.  Are they going to provide you with product data, price list, images, special offers and are they going to keep you updated when they add new stock and remove old stock.  The number of companies that I have spoken to that have advertised as wanting to work with dropshippers that have absolutely no idea of how they are going to do it shocked me.

Beware of Dropship companies charging large fees to open accounts.  Some companies will charge a modest administration fee for opening a dropship account with them but those charging larger fees should be given a wide berth.  These companies are generally in the business of selling accounts not products.

eCommerce

Once you have found your niche/market and your trusted suppliers you are at a point where you need to get your eCommerce store up and running and here there are some choices.  As I see it currently you have 3 distinct choices you can open a store with eBay or Amazon or you can have your own eCommerce store or you can do all 3 but I wouldn’t recommend the third choice straight away.

eBay and Amazon are amazing platforms that allow you to, within a day, have your store up and running and available to the world should you so choose.  The are also very competitve and I find when people shop on eBay, in particular, they are looking for a bargain.

The advantage of an eCommerce platform is that you are building a brand and a loyal base of customers, people who come back to you because they like the ease of use of your site and the service you offer, not all customers are driven by price alone.

Personally myself I have used eBay as a test bed to see if products actually sell then if I am confident that the products are worth the investment I will have a store built and sell the products through the store, there is no right or wrong way but that is my personal preference.

One thing you will need to consider besides the cost of getting your store built is the promotion of the store.  This is called Search Engine Optimisation or SEO for short and this can be quite expensive.  So if you are starting on a limited budget and you are trying to sell products countrywide as opposed to locally then I suggest an eBay or Amazon store would be the way to go initially.

Fulfillment

Once your store (eBay, Amazon or your own) is taking orders all you need to do is fulfill the orders via your dropshipper.  Some dropshippers use sophisticated interfaces to facilitate this process whereas others just require a simple email.  I have assumed at this stage that you have a payment processor or a way of taking payments online like Paypal   So once you’ve taken payment you then need to pay your dropshipper and place an order with them.  Your dropshipper will them dispatch the goods to your customer to complete the transaction.

Sales of products online reaches staggering new levels as each year passes and dropshipping plays a massive part in this rise.  The dropshipping industry is a multi-million dollar business and you can be part of it.  Be sure to do your due diligence and vet your potential partners before parting with any money.

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