How To Start A Drop Ship Business From Scratch

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This is the very first step and usually the most difficult step that you need to take prior to setting up your dropship business. Difficult because there are tons of products out there and deciding on what to offer is critical since the product you choose to promote will determine your success.

It is normal to think of setting up an online store with thousands of products in it because of the wealth of products available to you. It is also easy to think that you can make more money if you offer a lot of products, but in reality that is not the case.

You will actually have more chances of succeeding if you concentrate on promoting a specific line of products first.

Why? Think of marketing. How will you be able to market thousands of different products all at once? If you have the money and a team of marketers, you can probably make it but if not it will be easier to concentrate your efforts on promoting a single line of products.

This is the first pitfall that new drop ship business owners go through.

What I suggest you do is choose a line of products to promote first and when you start making money out of it you can go ahead and start another dropship business with a different line of products.

Below are some product suggestions that you can choose from.

Do you want to find out about eBay's consistently popular categories? I have just compiled this hot list to show you what's profitable on eBay, season after season, year after year.

Clothing, shoes and accessories
Clothing is such an exciting category to get involved in as it encompasses so many niches such as plus size gym wear, novelty underwear, and comfort shoes. Clothing is also easy to sell and ship, and best of all, there will always be a demand for clothing (at least until global warming really kicks in).

Selling tip: Always give buyers as much information as possible in your eBay listings, especially about the item's size. This helps buyers to assess whether it will fit them - one factor which can easily cause uncertainty in potential buyers.

Collectibles
eBay is without a doubt the world's most popular place to buy and sell collectible items. Collectibles can include antique items, baseball cards, posters, medals and war artifacts, comics and branded items like Coca Cola and much more.

Sourcing Tip: Visit yard and estate sales for arbitrage items which you can buy very cheaply and sell on to make a pretty profit.

Electronics
Possibly the most competitive, yet potentially profitable markets on eBay - particularly when it comes to items such as iPods and mobile phones. The best way to approach this market is in a big way - to really make a profit, you will need to do a big bulk buy and sell in big volumes. Consider supplementing your product range with accessories such as iPod skins, spare cords, or hands free kits for mobile phones.

CDs and DVDs
Did you know that eBay sells over 1 million DVDs and CDs and each month? However, for every one million sold, there are around 2 million listed. Yip, you guessed it, this is another highly competitive market. The trick to making it in DVDs and CDs is to niche it up - go outside of mainstream movies and TV series', or music albums and find a new niche market like exercise DVD's, classic films or learning languages.

Gaming systems
Many gaming enthusiasts use eBay to buy and sell their games and gaming systems. A typical gamer will buy the latest system, play it for 8 hours a day for four weeks then sell it on and find something new to entertain them, which means there is always an abundance of buyers on the hunt for a new system to entertain them.

Healthy and Beauty
There are so many items within the Health and Beauty market: weight loss supplements, anti-aging creams and vitamins, hair care, dental care, makeup (nail polish, lip gloss, lip stick, lip balm, concealer, powder, foundation, eyeliner, mascara, eyeshadow, illuminators, bronzers and blushers - phew!), perfume and cologne, moisturizer, eye cream, microdermabrasion kits, hair and makeup brushes and applicators, hair removal kits or razors and shaving creams, manicure kits, eyelash curlers, tweezers and much more!

As with all categories, it really helps to sell something which you are really interested in or have experience with. For example, if you suffer from dandruff, selling dandruff treatments would be ideal as you can relate to your audience and give them a few tips along the way (would be great in your eBay About Me page).

Hot Tip: While brand-name items are top sellers in health and beauty, be very weary of Chinese suppliers offering these items very cheaply - they are likely to be fake and eBay cracks down very hard on anyone selling these

Baby Gear
From toys to feeding equipment and strollers, baby gear is a highly profitable eBay market. Like clothing, there will always be a market for baby equipment and with the huge costs associated with bringing up a baby, it's no wonder parents turn to buying online to find bargains and save themselves some money.

Hot Tip: Don't be afraid to source second-hand or sample grade baby clothing - babies are messy little things and parents need them to have an abundance of cheap clothing to change them into after they splash around in the puddles, play with mud or start a food fight with their sweater.

Keep in mind these markets are reliably profitable only when they are well executed! The above categories are highly competitive so when selling them, you must work hard to stand out from your competitors with great key words and item descriptions, and flawless customer service!

Another very critical step that will affect the success of your dropship business. There are as many scams out there as there are legitimate ones.

Research is important. I can't stress that enough. Before partnering up with any dropshipping company, find out as much as you can about them first. Take a look at their website; if you can't see any address, name, or contact number, they're probably scammers.

Ask around in forums, search for reviews, verify the company at their local offices. If they offer dropshipping, chances are there are other people marketing their products already, so looking for feedback shouldn't be that hard.

This may sound like hard work but it is well worth your time. You don't want to be spending countless hours in setting up your dropship business only to find out that you are being scammed.

8,000 pre-screened legitimate wholesalers and suppliers

While many fantastic wholesale sources can be found online, there are also a huge number of sites developed specifically to scam a dropship business owner looking for a good deal.

So how do you tell whether you are dealing with a real wholesale supplier? First of all:

A supplier may be selling fakes of big name brands but this doesn't necessarily mean he is out to scam you. There are many suppliers in China and other countries selling fakes, but as long as you realize what you are buying, that is not a problem in itself.

The supplier may say they can only accept Western union and wire transfers as payment. These are insecure payment methods, but for Chinese suppliers, these are often the only two options available as credit cards (and therefore Paypal) are almost impossible to get.

You should always take the precaution of ordering only a small amount when dealing with a supplier who only takes Western Union and wire transfer for the first time, but many legitimate manufacturers and wholesalers use these methods out of necessity rather than because they are illegitimate.

The Warning Signs

Warning bells should start ringing if you come across any of the following: Beware, your dropship business is at risk.

• Fake address - either it doesn't exist or it exists in a poor or residential area.
  No contact details listed on the website.


• When you call, the telephone is answered by an individual who does not identify himself on picking up the phone.


• You are not asked for a business or tax number.


• The company suddenly stop replying to your emails.


• Parts of the text or images on their site are copies from other websites.


• When you place an order, the company claims they do not have any stock, but want to receive the money before ordering any in.


• Your contact becomes shifty when you ask for a product sample.

Steps to Protecting Yourself

To find out whether you are dealing with a scammer, try these tips:

• Copy and paste some text into Google. If it is copied from another site, you'll soon discover it in the search results.


• Check that the website gives a full business name and a registration number.


• Ring them to verify the phone number given is good, but don't accept a mobile phone number as enough, all companies should have a land line number.


• As for a photograph of the stock with the company logo in the background. Go to www.coolwhois.com and search for the name of the website. A legitimate company will have been operating for over a year (at least!) and their expiration date will be for several years time. Most legitimate companies reserve their domain names for 3-5 years or more at a time.

Use secure payment methods such as Escrow, Cod and Paypal Verified whenever possible.Ask other sellers what their experiences have been with the company on forums.

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About the Author: SaleHoo is one of the fastest growing product sourcing portals on the internet. It contains a database of drop ship, wholesale, closeout and manufacturing suppliers offering thousands of product suppliers to dropship business owners! Visitors are allowed to sign up for unlimited and lifetime access to the completely searchable database of products and suppliers. The database is regularly updated, ensuring that the latest retail products are always available for purchase and SaleHoo carries the BBB Reliability Seal!

Join SaleHoo Today for their Special Startup Offer!

No costly inventory - The good thing about a dropship business is you don't have to worry about slow moving products because you don't have them in stock. Furthermore, you won't be affected by price fluctuations because you haven't bought any product yet.

No need for a warehouse - Obviously, you won't need any warehouse because you don't have an inventory of products. Just imagine the cost involved if you have to build a warehouse or lease one.

No hassles of handling products - In most cases, you won't even see the product that you are selling. The packaging and shipping are all taken cared of by your partner. This is what makes a dropship business so appealing, in a way, all you're really doing is sell and collect money.

Cost effective - You don't have to shell out a large amount of money to be able to start your business. All you really need is a website or an ebay seller account and you're all set, you'll probably just spend some money on advertising.

Shipping Problems - Customers will be contacting you for delivery delays, shipping damages, and other complaints. This is a given since customers buy from you and not from your partner company.

This can easily be handled by asking your partner company about their policies, like how they handle returns, damage products, exchanges, etc%u2026 prior to selling their products. You have to know all the pertinent details before starting your dropship business

Out of stock products - Products could become out of stock without you knowing it. This becomes a problem when customers start ordering those products from you thinking that they will be receiving them soon.

This can be avoided by constantly updating yourself about the status of the products you are offering. Good companies will have real time stock counts available to you.

Finding reliable partners - Again, there are many scams out there as well as incompetent companies, so you really have to do your homework first otherwise your dropship business is bound to crumble.

If you noticed, the advantages greatly outweigh the disadvantages. Furthermore, there are things that you can do to avoid the disadvantages. Thorough research and planning is all you really need to make a dropship business work for you.

There are different ways for you to set up shop; it's just a matter of creativity. Here are some suggestions.

• Physical store - If you want to promote the product in your neighborhood, you can open up a store and provide samples. You don't have to stock inventory, you just need to have products available for the customers to check out.
  
  The downside of this set up is that customers might not want to wait for delivery and therefore choose to buy from a different store. This will only be perfect if you are offering a unique product with no competition nearby.


• Online auctions - This is probably the easiest way to promote your dropship business. You can list your products to sites like ebay, ioffer, and other auction sites.
  
  Auction sites are good because visitors are ready buyers, you just have to make sure that your price is competitive and you will surely make a sale.
  
  There are certain rules though that you have to follow so be sure to read their terms and conditions first before opening up a store.
  


• Ecommerce website

A popular choice of dropship business owners because of its convenience and automated nature, you can make more money with online stores since you can use a shopping cart software with a suggestive selling feature.

Ever Notice those online stores that show you products that are related to the one that you are looking at? Works wonders in increasing sales.

Powerseller's Guide - Your road map to a successful ebay business

1. Items under $10

It sounds like a great idea - after all, everyone likes a bargain don't they? But items that sell for under $10 have one big problem: Shipping. It's quite likely that the shipping for the item will cost more than the item itself and this can be very off-putting to buyers. For example, if the item costs $4.50 and shipping costs $6, the total cost for the item is $10.50. If the buyer can purchase the item at their local store for $8, then this suddenly becomes a much better deal. For small items and accessories, the way to get around this problem is by grouping the items together, such as sets of 6 golf-balls or 5 tea towels.

2. Products everyone else are selling

Many dropship business owners think that the best way to get started on eBay is to sell items that everyone else is selling. Surely those super hot items such as ipods, cell phones, psps and so on will be a quick route to riches? Well, no. The sellers who are already selling these items are not only more established on eBay - and thus familiar to and trusted by buyers - but they will be able to buy wholesale stock in larger bulks lots than you will, so their prices will always be better. Thus it will almost certainly be very difficult for you to make a profit in a market that is already well supplied.

3. Things you love...but no-one else does

Hobbies can be a great way of making money, but only if plenty of other people are interested in them too.
Another scenario is when you find a product that you think is absolutely wonderful and could be the next best thing...but no-one seems interested in buying it. Oh well you think, it's only short term, eventually they'll learn about my item and start flocking to buy it. Ah, no they won't. It's lonely work trying to educate people on the benefits of a product all on your own. As fabulous as the product might be, it's nigh-on impossible to start a trend on your own. To make money from a trend, you need magazines and newspapers, word of mouth and television to do some of the work for you.

4. Difficult items to ship - e.g. fragile china and plants

Now I'm not saying that these are bad items to sell altogether. Many dropship business owners do very well from these items. But I don't suggest you sell such difficult items when you are first starting out. Both these items have an above-average shipping risk, particularly if not packed properly. As a new seller, any negative feedback you receive at this early stage could be especially damaging to your career.

5. Very large items

Thinking of starting with furniture or pianos? Unless you already have experience selling and shipping these items, then it might be wise to start with something smaller. Shipping such large items is a major operation. Not only that, these items will sell less often than mid-priced items as they won't attract the same number of impulse buyers.

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About the Author: SaleHoo is one of the fastest growing product sourcing portals on the internet. It contains a database of drop ship, wholesale, closeout and manufacturing suppliers offering thousands of product suppliers to dropship business owners! Visitors are allowed to sign up for unlimited and lifetime access to the completely searchable database of products and suppliers. The database is regularly updated, ensuring that the latest retail products are always available for purchase and SaleHoo carries the BBB Reliability Seal!

Join SaleHoo Today for their Special Startup Offer!

Need I go far? Squidoo it! Create lenses about your products, review them and tell everybody why they should purchase your products.

A piece of advice when marketing your products.

Some people concentrate too much on selling features. This is good, however you should also give importance to the benefits that people will get out of the product.

Write articles about you products and submit them to article directories. This is a good way for you to reach new customers as articles are grabbed by webmasters and put on different sites.

Another thing that you should do is to bookmark your lenses and articles so that they will rank well on search engines.

Now that you have a product to promote, a partner company that will ship the products for you, an e-commerce site or an ebay seller account where you list your products, you now have to have the right attitude to achieve success.

Businesses often fail because of the owners lack of determination and focus. A dropship business is no different than any other business out there. You have to plan your actions and follow through so you can achieve success.

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