Dropshipping (make some money without any investment)

Dropshipping Best Practices

 

So you want to get involved with dropshipping? It seems an easy way to make some money without any investment. But is it?

It certainly can be, but it takes just as much preparation to do it properly as it would to open a “brick and mortar” store or an online shop where you are physically stocking the merchandise.

Without going into detail of the basics of starting any business, such as having it registered or licensed, having a separate bank account, having some sort of accounting set up, etc. we will assume that is being done and concentrate on dropshipping itself.

By far the biggest problem is finding a “niche”, an area of the market where you will concentrate your efforts. It’s easy here to choose your hobby, but few can transition from hobbyist to business owner successfully. The main reason being there are too many established businesses already devoted to a popular hobby.

Yes, there are hobbies that will support your business. You may very well have a product for a specific breed of dog or cat and decide to concentrate on that niche. But that is a very “vertical” niche, there is a finite number of people globally that are interested in that one breed.

That is a far cry from “games”, which is a definite horizontal market. It is worldwide and has million, even billions of enthusiasts. Such a market is hard to break into, where a vertical market is almost always capable of supporting a new product or seller.

You don’t even have to own a dog to sell to that vertical. You only need a product and a dependable dropshipper to keep you in business. So, how do you find the “good guys” in dropshipping?

You can try the search engines, using terms like distributor. “Wholesale” is hardly worth the effort, as you will come up with many retailers. “Warehouse Distributor”, “Wholesale Distributor” as a single term may help. Certainly try all variations of “dropship”, but here again you will get many bad hits.

You can also join one of the membership sites that offers sources. Many say “never pay for a list”, but many do pay for a list and there are some good ones around. The main thing here is to make sure you are dealing with a good company that offers a guarantee and stands behind it. There are many tales of woe on forums from people who got involved with bad sources suppliers.

It’s difficult, but you need to make certain you are dealing with a Tier One, top of the distribution channel, dropshipper. There are many people who have taken the anonymity of the Internet and, with an investment in a fancy website, gone about proclaiming themselves dropshippers. These people are referred to as “middlemen”.

They do not hold any inventory of their own. They simply take the order that you sold and pass it on to the real dropshipper, making a profit on your sale. Most offer one or more “levels of membership, offer deeper discounts with more expensive memberships and in general also have websites available. All to dig into your pocket.

Here is what you should require in choosing a dropshipper –

1. They charge a fee? Is it one time, or annual? Will they give it back as a rebate when you have done a specified amount of business with them? You have to decide this on your own. Some good sources do, some lousy ones don’t.
2. Do they offer images of their products?
3. Do they charge more for dropshipping an item than they would for the same item if sold to a retailer? Again, up to you.
4. Do they have all of the goods they offer to you in their possession? This is critical. Visit them, talk to current customers, ask for photos. Make sure they are real and not middlemen.
5. Will they ship one item at a time? Without an additional charge, as long as it is over their minimum order level?
6. Do they ship blind? Does every package that leaves them going to your customer have nothing whatsoever to tie them to the order? Does it have your name on the shipping label?
7. Do they accept PayPal or credit/debit cards? If you sell using PayPal, you should try and pay that way. You will lose days if you have to transfer money to a bank account. Best solution – a PayPal debit card.

If you can answer Yes to 4, 5 and 6 and if you are satisfied with how they deal with 1 and 2, you are getting close.