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Drop Shipping Basics

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					?Drop shipping is a cost effective and easy way to get started selling merchandise
online. Although it is easy to get started, however, the new e business owner must
realize that there are many more steps to having a successful online business. All
online businesses will need to do market research and develop a plan to effectively
market. No matter where you are located (on or off line) you need to develop a
pleasing store (website) and ways for customers to find you. But keep in mind; you do
not need to invent the wheel. There is expert help out there for everything you need to
do online. As you read about how easy drop shipping is, you will want to keep this in
mind.

What is Drop Shipping?

Drop shipping occurs when the merchandise ordered from your ecommerce site is
sent directly from a supplier to your customer. This means that you never have to
order, store, or handle the merchandise. This process minimizes the risk to you
because you do not need to buy the product until it has sold. Suppliers take care of the
warehousing, packaging, and shipping of products. It saves the store owner a great
deal of money and it is very convenient.

Benefits in a nutshell

The online retailer does not need to invest large amounts of money. Online retailers
can start a business with very little risk. There is no inventory to buy or pay for
upfront. If the product doesn't sell, you never have to buy it. There is no packaging
materials and shipping labels to buy or handle. The online retailer does not need a
shipping account. The online retailer does not need to handle returns. Merchandise
can be purchased at wholesale pricing and sold at retail prices. How to Find Products
and Market Them Find products by doing thorough online research. There are a large
number of drop shippers. One of the biggest concerns is making sure you are dealing
with a reputable drop shipper who will do what they claim. Create a search engine
friendly site that uses appropriate keywords for the products you wish to sell. A
professional ecommerce site will make it easy for visitors to navigate the site, find
what they want and add it to their shopping cart. Buyer frustration is the number one
reason for shopping cart abandonment. Well known vendors such as PayPal will
increase the level of trust that your potential buyers feel. After the purchase is made,
the order must be sent to the drop shipper for fulfillment. The margin over your drop
shipper fees is your profit.

What to look for in a drop shipper

Drop ship setup fees are minimal. Your supplier stores and manages inventory. Your
supplier packs and ships products directly to your customers. You pay your supplier
only after your customer pays you. Your drop shipper has a reputation for timely order
fulfillment as well as timely returns. Customer service should handle customer
complaints efficiently and politely.

The advantages of drop shipping are numerous. It helps allocate time, energy and
money so you can be devoted to the most productive activities. This is the benefit of
outsourcing. Whether you outsource SEO, PPC campaign management or writing an
article, if the best and highest use of your skills is elsewhere, you will be better served
by having someone else do it for you. Trying to do a lot of a "little of everything" will
get you a lot of non-professional results. Drop shipping (and outsourcing in general)
will cut costs, increase sales, save time, and reduce risk; all with less manpower.

What are the drawbacks to drop shipping?

Although many retailers find that drop ship services provide them with an excellent
product sourcing solution, it is by no means a perfect solution. Drop shipping comes
with several drawbacks, including the following:

You lose some control over shipping times, packaging processes, and package
branding. Your supplier may run out of a hot-selling product. Drop fees may increase
your expenses. (A drop-fee is a handling fee charged per shipped order.) You can't
take advantage of bulk discounts.

Considering these in advance, will help you pick the drop shipper that makes the most
sense for you and your target market.

Once you select the types of merchandise you want to sell and the drop shipper to use,
you will want to develop a website to attract customers. You can do this yourself, or
you can choose someone to do this for you too. Using the same criteria that you used
for selecting your drop shipper applies here as well (reputation, quality of work...in
this case ability to make a site search engine friendly and so forth). These criteria will
apply to all the other activities involved with developing your online business and
increasing your online sales as well.


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Lori Olson has a passion for helping small businesses develop strong online presences
with a team of 250 professionals who analyze & implement SEO, SEM, PPC
Campaign Mgmt, Social Media,Copy Writing & Web Development strategies which
are customized to fit any needs, wants & budget. Update Small Business also provides
leading edge employee & sales assessment & training; & CRM solutions.Small
Business Consulting or call 877.265.6568.

				
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posted:4/6/2011
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