Drop Shipping: How Can I Use It in My e-commerce Business?
E-commerce offers unlimited business opportunities you can provide if you know how and drop ship is one of them. You can be in one country and sell product located in another country to a customer who is located far away from you. If you are truthful in what you do, customers from across the world will queue in your online store waiting to buy products from you, and all you have to do is Drop Ship it and pocket the profit. If you do not have an online store yet, you can create an Ecommerce website with Shopify and get started with your business. It is very wasy to use and has a lot of free resources for you.
What is drop shipping?
As explained already, a drop ship is an e-commerce business involving three distinct entities:
- The actual product owner. This is the real store that offers the products for sale, usually the wholesaler. The wholesaler may be located, say in China.
- The merchant. This is the seller who markets and sells the product to the buyer. He may be based in Dubai. He has a sales outlet where he sells the items.
- The buyer. This is the actual buyer of the product to who will receive the drop ship.
When a customer searches the internet and locates the merchant, negotiates and agreed on the price. The buyer will make payment. The merchant heads to the wholesaler's store and purchase the item and instruct the wholesaler to drop ship it to the buyer. The merchant may be in the US, while the customer located in South Africa. Drop Ship business has no location problem.
How to start a drop ship business model
If you understand how Drop Ship works, let’s discuss how you can incorporate it into your e-commerce business. You may also start a business based on drop shipping. You should note that the drop shipping e-commerce business does not require you to stock or have any inventory. What you need is a trusted e-commerce site where you can deal with customers legitimately and convince them to buy from you.
Typically, starting a drop ship involves the following steps
Setup an e-commerce store in the niche you want to drop ship
Let’s assume you are interested in baby items, toys to be precise. You need to start a regular e-commerce store to sell children toys.
Set up your payment processing systems
You will setup complete payment processing system that gives your customers the confidence to do business with you. Remember that trust is an essential element of e-commerce, and it is with the payment that it matters most. You also need to make sure the payment procedure is convenient and encourage your customers to buy from you.
Locate the right drop shop supplier
You need to formalize a concrete business arrangement with trusted wholesaler or manufacturers in your line of business that will agree to ship the product directly to your customers. It is important to do is proper business arrangement here because this is where your business can have a problem if done wrongly.
Setup up your marketing
After everything is set, it’s time to start marketing to attract customers. It is important to point your marketing in the direction of the market you want. When considering your market, it is important to consider areas where shipping will be convenient for your suppliers to reach without problems.
Processing the order
When you received order through payment from your customers, remember that your customers are not aware of your arrangement as a drop shipping merchant. Therefore, you need to be prepared to take responsibility entirely for the items shipped because the customer is not aware of your drop ship arrangement.
The hallmark of drop shipping is that you don’t handle the product. All you know about the product is that it was bought and paid for and shipped from the sellers to the buyers. If the dropship is not in the proper manner, you need to be very careful when running your business aground.
You can drop ship practically any product if you are ready to the initial work and land reliable wholesalers. It has its advantage and disadvantages. The most crucial one is that it allows you to start a business with little capital.
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