The Internet opens interesting business opportunities, allowing to develop trade even without renting premises and costs for a large staff. One of the popular schemes is dropshipping, what it gives and what to remember at the start of such an activity, let's talk in more detail.
Dropshipping - what is it?
In literal translation from English, this word means "direct delivery". Hence it becomes clear what is dropshipping in sales - the transfer by the producer of the right to find buyers to the intermediary. He has an income from each transaction, assuming only the obligations of communication between the seller and the end user. This scheme is used by some online stores.
Dropshipping - how does it work?
The manufacturer does not always want to deal with the sale of products independently, so there are several ways to get rid of such duties. One option is the dropshipping system, what it is, can be explained in two words: the use of an intermediary. The seller seeks the consumer and sells him the goods with his mark-up. The difference between the purchase price and the retail price and make a profit. To explain the principle of dropshipping, what it requires from both sides, we will analyze the whole process in stages.
- Search for a supplier . Here you need to consider several companies working on the scheme, choose the most interesting conditions.
- Creation of a trading platform . It can be a one-page site, a group in a social network or online auctions. Prices for goods are higher than those offered by the supplier.
- Attraction of buyers . After filling with the goods, it is required to find the consumer, that is, to launch the advertisement.
- Order of goods . As soon as there is a request for goods and payment for it, the intermediary makes a purchase from the manufacturer, making out the delivery to the address of the consumer.
- Sending the product . The supplier receives the money, sends the goods to the client and notifies the intermediary about the shipment. The shipper transfers the shipment data to the consumer.
- The result . The buyer receives the order at the price of the intermediary, and he pays the supplier the goods at wholesale rates. Profit is the difference between these amounts.
Dropshipping - "for" and "against"
Any undertaking has two sides. Having considered the dropshipping system, what does it mean, you can think about its absolute simplicity and profitability. Actually this does not fully correspond, therefore, before starting a business, you need to familiarize yourself with all its aspects, paying attention not only to the good sides, but also to possible difficulties.
Dropshipping - pluses:
- investments are almost unnecessary, there is no need to purchase goods, to search for a place for its placement and to hire personnel;
- You can run a business from any place where there is access to the Internet;
- it's easy to test a niche to choose a promising option;
- There are no problems with the leftovers in the warehouse, because there is no warehouse;
- delivery is handled by the supplier;
- the goods are easy to find, you need to browse the catalog.
Dropshipping - cons:
- There is no control over the movement of the goods, and the intermediary will have to answer for the delay or error in the dispatch;
- only the supplier knows about the quality of the product, so there is a chance to deal with the return processing often;
- the scheme is not new, so the competition is high;
- there is no information on the availability of goods, the manufacturer works with a number of dropshippers, and the demand for some category may exceed the balances in the warehouse.
Where to start dropshipping?
An important step from which the success of the business will depend is the choice of the supplier. There are already companies that offer good conditions for opening a business in dropshipping. This site is Aliexpress.com, Tinydeal.com, BuySCU.com, BornPrettyStore.com dinodirect.com, Focalprice.com, PriceAngels.com, Everbuying.com, chinabuye.com, 7DaysGet.com. Further in the proposed catalogs, you must select the goods for distribution. To assess product quality, you can focus on reviews or make a trial purchase to evaluate it personally.
How to make money on dropshipping?
There is an opinion that this scheme was profitable only at the start, but now the mechanism has exhausted itself, and the income is only getting already untwisted sites, and for beginners, work on dropshipping will not bring anything except a headache. This is partly true, with the development of a new business, one always has to work hard, and such a scheme will not be an exception. The main difficulty lies in the correct choice of the goods, if everything is done correctly, then the process of attracting customers will not cause serious problems.
What is the advantage of selling through dropshipping?
Profit can bring any goods if you make a timely and interesting offer. Therefore, in order to earn money on dropshipping, you just need to study the suppliers' catalogs. They follow the market, and try to offer only the best-selling products. Own assessment of the market, too, does not hurt, especially when working with foreign suppliers, which may not take into account any local characteristics. So far, the following categories are in great demand:
- clothes and shoes;
- accessories;
- childen's goods;
- gyroskutery;
- cosmetics;
- linens;
- accessories for the veiling;
- sporting goods;
- gadgets;
- automotive parts and accessories;
- interior items;
- sports nutrition.
Where to buy goods for dropshipping?
You can find products from suppliers who are interested in working on the dropshipping system. They offer wholesale prices to intermediaries and provide detailed information about the product. Another option is to find wholesalers or manufacturers. In this case, it may be necessary to talk about the dropshipping scheme, which it will give to both parties. If the presentation is successful, it will be possible to become a representative of an interesting product, having obtained an attractive purchase price.
How to find a supplier for dropshipping?
There are sites offering cooperation to everyone who is interested in dropshipping. It consists in the sale of access to information about suppliers, goods and prices. The option looks interesting, because the bases do not consist of one hundred positions, but in fact it will be difficult to find a good offer here. These bases are bought by hundreds of people, so the prospective data has already been worked out. Therefore, we will have to use other methods.
- Non-standard approach . A lot of people are engaged in search, so you need to try to find something original.
- Search of interested suppliers . Large companies do not always care for every intermediary, but for small or undervalued firms, any help in the sale of goods will be welcome.
- Manufacturer . To offer competitive prices and profit, it is necessary to reduce the chain of dealers, ideally - to find the manufacturer of the goods.
- Announcement . There is a chance that the company itself will begin searching for dropshippers.
- Narrow specialization . Expand the range intelligently after continued success, and the first time is better to focus on one niche.
- Location . Not all buyers are ready to wait for one month their goods, so it is desirable to find a supplier in your region (country). This and the problems of the language barrier will be lifted.
How much can you earn on dropshipping?
Because of the high competition, it is necessary to set the minimum prices, so the income can be practically absent, especially at the first steps. Gradually, the situation will improve due to the acquisition of the client base. Still receiving money when drop shipping depends on the way of supply: the price can be made a little higher, but for this to provide the client with the best service.