What Is Dropshipping and Its Potential?
Welcome to the colorful Dropshipping world. And this is also the opening article for you to know what is dropshipping and what its potential is. Understand why it is the hottest form of online money making MMO today, and also extremely important for a business person whether he/ she is an amateur or professional. Let’s start the journey to Dropshipping world.
What Are Dropshipping and Dropshipper?
Dropshipping simply means “sales skip shipping” – A form of business or trade in which you / I are a retailer but I do not keep my stock. When customers buy goods, you will go to your supplier and ask the supplier to ship the goods to customers. You will not have to ship goods to customers, you just focus on product marketing, order tracking, customer care. The profit you gain is the price difference between the supplier and the price you sell to customers minus shipping costs. The person who owns this process is called the Dropshipper.
Understand the simplest way: You buy the product at a place at a lower price and sell it at a place for a higher price and pocket the difference, this differs depending on the type of product, it can be up to few hundred% if you have the skills to search for a supplier and choose a product. And normally a profit of 30-60% is acceptable.
Who is Suitable for Dropshipping?
This question is really subjective for everyone. In addition to those who consider dropship in particular and online business in general as the main occupation, determined to work fulltime, earning a really large income to support themselves and their families. There are many people who are looking for a left-handed job. I think the following 3 groups of people are extremely suitable if choosing dropshipping as a left ear job to earn extra income.
Group 1: Officers
If you are an office worker, you have free time from 2-3 hours/day and want to find another source of income besides salary. Congratulations that the dropshipping is very suitable for you. Of course, once you have a small income. Wanting to grow your revenue even bigger means you need more time and effort. At that time, you will make a decision to continue to maintain your income of $ 200- $ 300 / month or quit a full-time job to increase N times of income. The decision will depend on the emotions in your heart
Group 2: Students
Needless to say, students are time billionaires. An extremely favorable factor for you to research the market, the product. Another great thing about dropshipping is very suitable for students is that the initial capital is almost zero. You just need to spend time learning and experimenting a lot. You will learn millions of great knowledge instead of playing games or watching movies online all day. And the feeling of earning money when you were a student is always a great feeling.
Group 3: People starting out in online business.
When you are starting an online business, your experience is a factor that you are missing out on a lot. Knowledge of market analysis, product sourcing, sourcing, shipping, online marketing knowledge, and billions more. The dropship will equip you with that knowledge so you can confidently enter more difficult markets. Not only that there is also a significant income channel, can help you have a certain amount of capital to start up.
Steps to dropshipping?
Find products, choose a supplier (Supplier), negotiate with them on price, choose a shipping method according to price and shipping time. (This step is extremely important, deciding 80% of the campaign’s victory)
Select sales channels. (Post products to your Store on eBay, Amazon, or separate website …) In the next article, I will analyze each sales channel, the advantages and disadvantages of each to help you choose for yourself a standard sales channel.
Customers will go to your store to purchase and pay you via Paypal account, Payoneer, or a Paygate accepted by the seller.
Buy and send it to customers. You use the money that customers pay for you, through the purchase vendor, and ask the supplier to ship the product to your customers.
Custom packaging, shipping goods to customers. Send tracking info to you. You track orders, care customers.
To find out how much profit is for each product, review and optimize the steps to increase profits over the next sale.
Pros and cons of dropshipping
- When you start a business, your initial investment is low. If you develop the system grow up the cost starts to increase. But still a lot lower than a traditional business.
- Easy to start, quick turnaround time, Flexible, Suitable for business beginners, students, newbie.
- No worries about inventory, there is no case of importing a bunch of goods that cannot be sold, without having to find a store.
- Commissions received immediately after completing each order. No waiting for review on a 3rd party.
- Great competition. Scaling is a difficult problem.
- Difficult to manage the quality of goods sent to good customers.
- Choose where to source, to whom to sell, how to analyze market demand to find products.
- Want to set up a separate website, must have knowledge of the web, domain …
- When facing difficulties, how to solve them. For example, meeting a fastidious customer, how to take care of, choosing the wrong reputable supplier, a blocked buying or selling account, etc.
So is this model worth it?
As we warned from the start, dropshipping is not a perfect model or a free way to build a successful business. This model has certain advantages but comes with some complex issues that you need to solve.
The good news is that with carefully crafted plans, most problems can be solved and won’t hinder you from building a successful drop shipping business.
We hope that this article can benefit you in some aspects of dropshipping.