Starting a Dropship Business- Dropshipping Business Ideas

Starting a Dropship Business- Dropshipping Business Ideas

Starting a dropshipping business is not too difficult when you consider that the part about finding a manufacturer who dropships is much simpler than lining up a building to lease, designing and setting up the production line, using workers and office people, ordering raw materials, etc.  But what do you need to do?

Well, first you’ll need your business plan. What are your business goals?  Who is the demographic you’re targeting?  What kinds of products do you hope to offer?  Much of this you may have already brainstormed, but it’s important to nail down just what you hope to do.  It’s so easy to get off track and forget your main purpose when you get in the throes of working your plan.

For example, if you run a destination wedding business and you want to offer theme fashions for the wedding customers, it might get overwhelming if you launch a new section on the fashions and forget that the site is about destination weddings.  Don’t get sidetracked with that side niche.

A big consideration is, do you plan to use the Internet only or use mail order catalogs – or both?  If the Internet is your tool of choice, then you must design (or have designed for you) a navigable website. 

Avoid the temptation to get flashy and busy and artsy on your site.  Simple makes sense with basic, relevant navigation that makes it easy for your customers to find what they want on your site. It’s the same with a catalog.  You’ve seen catalogs that look more like a kindergartener’s art project with tiny images and crammed in text.  It’s difficult to look at.

Now the nitty gritty of setting up a dropship business is far bigger than what we have listed here.  But there are some excellent sources online to help the dropshipper get started and stay up to date with “who’s who.”

You must find a great resource that teaches dropping in-depth and someone who can guide you in the intricacies of getting reliable sources, finding quality products that sell in an evergreen niche, and more.

Dropshipping is one of the simplest ways to get your own online business up and running in the quickest way possible.  Just know that, as with all business, this will take determination and persistence – and hard work.  There is no “golden ticket” to be found here.  But it can be the next best thing for you!

Dropshipping Can Be a Boon to Online Marketers

Do you want to know why the Internet is in the throes of a gold rush?  For starters, it’s because of the convenience of dropshipping.  Online marketers are seizing the opportunity to learn how to use this medium to market products they don’t want to stock or ship.

With the convenience of dropshipping, the online marketer can concentrate his or her expertise on designing an attractive and efficient storefront online, then driving traffic to it with effective search engine optimization.  It just makes sense to delegate those aspects of your business to others who can do them more efficiently.

You can focus on learning your customer and his wants, needs and desires and then fulfilling those with products he needs.  Learning to drive traffic becomes your focus rather than getting bogged down in the manufacturing and shipping details. 

The only other aspect that you would have to be concerned with is customer service – from taking the order to handling any grievances (and we can outsource even that to someone else).

But maybe we should look at the part you don’t have to do.  With dropshipping, you don’t have to have a large, expensive manufacturing facility with all of its overhead costs like heating and cooling, employing all of the workers, accounting, and shipping department. 

The shipping department alone is a complex part of any business.  When you use dropshipping, you’re spared the expense and headaches of coordinating the packing and then getting packages prepped for UPS or whatever shipper you use.

You won’t have to stock any merchandise.  That’s a huge perk.  This way, you don’t have to purchase large amounts of something that may not move. 

How about the manufacturing process itself?  You don’t have the means to build, buy and stock supplies, store finished goods, employ workers, pay health benefits, manage safety concerns, etc. 

And when tax time rolls around (heave a sigh of relief), there’s no inventory to document.  Just ask any retail store manager how big that burdensome, but critical job of counting every item in their store just to make sure they have the documentation done for the taxman is.

Dropshipping is the best way for the online marketer to go into business with the least amount of hassle involved. 

What Does It Mean to Dropship Products?

In simple terms, dropshipping is when a retailer offers for sale some item(s), which he doesn’t stock, but passes on the order to a manufacturer to fulfill and ship.  In this way, a business owner can show items for sale but be spared the cost of manufacture, inventory and other costs of business such as shipping. 

Not to be confused with affiliate marketing, where you represent a certain business, with dropshipping no one needs to know who makes the product and for all intents and purposes, the retailer stocks and ships the orders. 

This has been done for years by such big names like Wal-Mart.  But now because of the Internet, more and more smaller home-based businesses are taking advantage of drop shipping.

For example, Jim Brown sells custom T-shirts.  When you look at his catalog or website, you see a very nice selection of both readymade and custom printed Ts.  A customer will choose and submit an order to Jims’s Custom Ts.  John then forwards the new order to his dropshipper, who then fulfills the order and ships it to the original customer. 

Jim never sees the actual T-shirt, never has it in inventory, doesn’t have to stock supplies, manufacture it, pack it or ship it.  He just acts as the storefront and order taker.  If there is any problem with the order, he is the one who needs to deal with it sometimes, depending on the dropshipping company.

For example, let’s say you want to sell a specialty muscle building supplement, but don’t have the facilities or financial means to build a business from scratch.   For you, there are manufacturers whose sole purpose is to custom blend and fill orders like this.  In that case, it would be called private label dropshipping in that the manufacturer would take your custom request and then label it with your label and ship it in your name.

As you can see, there are many distinct advantages to using dropshipping.  As a retailer, you only need to be looking to display the items attractively and be able to take orders.  Your forte would be marketing and sales – getting consumers to see your offerings.  There’s no hassles with hiring employees to maintain a large manufacturing concern.

The manufacturer can do what he wells – and that is make the products for you and others like you.  It’s smart business to specialize and do what you well and delegate what parts of the sales process that you can’t or don’t want to do to others. There are many more advantages to all concerned. 

Now more than ever, entrepreneurs are able to bring to the public just what it wants without the large investment and hassle of setting up an entire manufacturing facility and shipping department.

What Kind of Dropship Products Are Available Online?

One reason online entrepreneurs turn to dropshipping products is that there’s such diversity in the offerings to retailers.  Let’s say Cindy wants to open an online discount wedding supply.  She doesn’t want to set up a manufacturing facility – she just hopes to come up with an attractive catalog or website to send potential customers to.

Her biggest job would be to find and line up manufacturers that could supply the various items for her catalog.  This takes some research and the Internet is very useful for that.  Once she contacts the manufacturers and sets up an account, she can then focus on designing a web presence

Or let’s say Karl wants to sell a special herb or vitamin supplement to go along with his exercise business.  He can find a manufacturer that offers both ready made and custom made supplements.  What’s even more special is that Karl can have his own brand name label designed.  The dropshipper will then take his order and label and ship to his customer for him.

Have you dreamed of offering your own specialty electronics business?  So have others and because of this, manufacturers are available to make and fulfill your order.  Jack likes selling hard to find computer equipment.  He can locate the suppliers and line up accounts with them.  Then all he has to do is create a catalog and/or website to make it all available to his potential customers.

As you can see, dropshipping can be the answer to those many questions a retail sales business has.  Do you want to specialize in hard to find old fashioned toys?  Look up handcrafted toys manufacturers.  Do you envision yourself as being the source for all things pink?  Again, there are manufacturers that supply that niche.

Dropshipping sort of crosses over into affiliate marketing and the two can complement each other very well.  For example, if your website is all about California backcountry trails, then you can have a custom made trail mix just with your label dropshipped to your customers – but also have hiking and backpacking equipment from Amazon.com all on the same site.

Do you see the possibilities?  You come up with the idea. Find the dropshippers and suppliers for it. You design the website or catalog. Come up with ways to get your customer to see your site and  you’re in business. 

But do you notice that there’s a big portion of the equation missing?  The manufacturing and shipping of the product which is handled by your dropshippers.  This just about as close to a perfect business model as you can get.  It will take some homework on your part to line up solid, reputable sources.  But once that part is done, you’re in business.

Finding a Good Dropship Source

When trying to locate a good dropship source, there are several things to keep in mind.  As wonderful as the Worldwide Web is for finding everything you need right at your fingertips, it’s also a source of scams and illegitimate dropship sources. 

It seems there’s this almost parallel stream of businessmen and women whose only role in life is to part you from your money.  The same goes with the dropshipping industry. So do your due diligence. 

There are a few things to look for in a legitimate dropshipper and among them is that you should check references.  You should be able to ask for names and numbers of current customers to see if the service is reputable.

Search on the Internet for a scam or review on any business you want to deal with.  It would be wise to check any Better Business Bureau type of organization to make sure there are few complaints.

As with any business model, there are so-called dropshippers who claim to set you up in business with catalogs and a website, etc., but you end up dealing with a middleman and not the direct manufacturer.  This leaves you with little profit and angry at the whole idea of dropshipping as a worthy business.

A good dropshipper will also have a good customer service department available (at least during business hours).  You’ll want to have friendly relations with these representatives because they will be who you talk to when you check up on supply, estimated shipping times, glitches, etc.

To serve the dropshipping community better, some have formed what we call a wholesale dropship club.  A good wholesale dropship club offers its members access to a source of reputable dropshippers and offers the club group discount rates. 

A word to the wise: as mentioned earlier, there are good dropshippers and there are junk dropshippers.  Do your homework well.  You can even head to the local library and ask the librarian for a directory of wholesale manufacturers that you can use to source good companies.

Please don’t waste money on so-called dropship lists you see advertised all over eBay or elsewhere.  In thousands of names and addresses, you might find a handful of “live” sources.  These lists are often just a cut-and-paste listing of a business directory and many are very outdated.

 Know that all dropshippers may charge a set up fee.  This fee is to discourage casual buyers from taking advantage of the lower wholesale prices.  This fee can range from several hundred dollars to thousands depending on the manufacturer.

This may be the most painstaking part of your business set up, but it’s also the most vital.  You’ll be glad you spent the time getting good businesses as your dropship suppliers.  Your business is only as strong as your weakest link.  Make sure you take the time to find a good source for your dropshipping needs.