Start a Business Dropshipping
If you have been looking for ways to start an online business cheaply, then the chances are you have come across wholesale dropshipping. However, you may be wondering whether this is a legitimate business opportunity or simply another scheme designed to make a few quick pounds for people with questionable ethics, whilst you are left still searching for a way to start your own business at home.
Firstly, let's clarify what dropshipping is; a dropship company sells products at wholesale price but allows you to buy individual units and to market their products before making a purchase from h Crucially, they will deliver the item to your customer on your behalf. This gives you access to goods at wholesale price but without having to spend money on stock until you have buyers. With a wholesale dropship company you simply market the product you would like to sell and purchase the items as and when you make a sale, having it delivered directly to your customer.
On the surface this idea looks too good to be true. Why would a company allow you to sell their products without actually making a purchase? Why would they pay to store the products and then offer them to you at wholesale prices?
Well, the answer is simple; offering dropshipping services as well as, or instead of a standard wholesale service gives smart wholesale companies the opportunity to sell more products. By offering a dropshipping options they instantly make their business appeal to a much wider market - think about how many people are out there looking to start a business from home, with very little financial commitment; many people who could never afford to buy wholesale stock, or would not be willing to take the risk of investing in stock they may or may not be able to sell on suddenly see online retailing as a viable business idea if they have the chance to make money without any upfront financial commitment.
So, whilst there may be extra running costs for a wholesale company that offers dropshipping, it is greatly outweighed by the benefit of the additional income stream. The profit margin of dropshipping may be smaller than of simply selling wholesale, but the market is bigger, so less becomes more.
Now, the next important question to ask is whether dropshipping can provide a stable and sustainable basis for an online or home based business. We've established that dropshipping is a genuine business concept but we need to know that it works in practice. For dropshipping to enable you to build an online business the dropship company must meet certain basic criteria.
Firstly, the wholesale dropshipper needs to offer a decent selection of items at competitive wholesale prices. The online retail market is extremely competitive and your online business will never get off the ground at all if you cannot source products at a good rate. They also need to have a reliable stock; if their merchandise runs out every other day you will never get anywhere.
Secondly, and probably most crucially, they need to provide a good level of service; there's no point putting all your effort into making sales if your dropshipper has a poor delivery service, or worse still provide faulty merchandise. Building a profitable business with dropshippig is dependent on the reliability and professionalism of the dropship company you choose. You can do everything right, create the perfect sales pitch and make hundreds of sales but if they run out of stock, without updating you promptly or fail to deliver the goods to your customer in a timely and professional manner and you will go out of business quicker than I can type the words.
Any retail business is built on customer service and the major downfall of dropshipping is that the most important part of the online sales process is out of your control, you are completely at the mercy of the wholesale dropship company you choose to work with. Repeat business is one of the main ways to build a business quickly but poor after sales will kill any chance of customer loyalty. Worse still, if you choose to sell via eBay, which is one of the best places to start an online retail business, negative feedback from past customers will put off any potential new buyers.
So, the pitfalls of working with a dropship distributor are clear but this doesn't necessarily mean that dropshipping is something to steer clear of, what you must do is choose your dropship partner carefully. As with most home based business opportunities there are plenty of people out there simply looking to rip you off. But, if you are cautious you can avoid the scams and make a success of selling online with dropshipping.
When you are looking for a reliable dropship company be wary of those companies or wholesale supplier directories that ask for a fee. Some of these companies are legitimate and it is not unreasonable to charge a membership fee but be wary about any company requesting a monthly fee. Take your time, research your options and the more trustworthy companies will stand out.
The next stage of selecting your wholesale dropshipper is to look at their stock. At this point it is very important to research your market. Say, for example you are looking to sell via eBay, you need to look at your potential competition - to start a successful business you have to be able to match their prices. Check out what is selling and for how much, look at completed sales as well to see what is popular and what prices you could hope to achieve. Can the wholesale supplier you are considering offer you low enough prices? Do they stock in demand items?
Finally you need to test their customer service. Email them with a few questions; how quickly and helpfully they respond is a good indication of their general attitude towards customer service. You could even go as far as to run some test purchases, order and item or two and see how well they manage the delivery process - are the goods well packaged, arriving in good condition; do they arrive promptly?
Perhaps this sounds like a lot of work and that there are a lot of potential problems with dropshipping but this need not put you off. There re decent companies out there and if you do your home work you can build a successful business. For more advice and tips on finding a reputable wholesale dropship company visitAuction Biz. As with any new venture there is a lot to learn but if you put the effort in, the rewards can be great.
