Some Basics You Need To Know About Drop Shipping
At first glance, the practice of drop shipping sounds fairly simple. You find a manufacturer who is willing to ship in units of one to anywhere in the continental United States. You construct a website and promote and optimize it so that it ranks number one in the Google rankings.
When someone sees your website with the alluring products depicted, they order from you on a prepaid basis, you put the money in your bank, send the order on to the manufacturer and pocket the difference, which is your profit. The manufacturer then dutifully sends the product to your customer.
Do you see anything wrong with this model? Well, that is how drop shipping is supposed to work. The problem is that there are some very important moving parts in this scenario that don’t always work out so well.
First of all, there are just not that many manufacturers who are willing to ship their products on units of one. The economic model just does not fit their way of doing business. Most manufacturers work on a large scale of operation and selling their final product in bulk is the only way that they can make any money.
Even wholesalers work on the same volume principle, so they market their goods in minimum lots of say, 500 to 1000 units, depending upon what they are selling.
Another reason manufacturers and wholesalers are not always too interested in doing business in this way is because of the inexperienced and flaky way that drop shipping marketers run their businesses. It is a here today and gone tomorrow experience when they commit to work with a manufacturer, and it is frequently a headache that the manufacturer doesn’t need.
Now that you know some of the downsides of the drop shipping business, take heart because there are a few bright spots. The mechanics of drop shipping is fairly straight forward, as already mentioned.
Real drop shipping works on a relationship basis, and with the few manufacturers and wholesalers who do find it an agreeable way to do business. As a potential marketer in this field there are a few steps that are mandatory in order to get started off on the right foot.
It cannot be advocated more strongly than to say, “You Must Do This,” in emphasizing this next step. It is a must that you put together a business plan. This is so important, that it would only be fair to say that if you do not have a solid business plan, it is almost a sure thing that you will fail.
That does sound harsh, but unless you can control every step along the way, your chances of being successful are slim and none. You should learn how to make a business plan that would pass the test with a banker as though you need to borrow $100,000. You are not going to need to borrow anything, but that is how detailed you need to make it.
Find a free template for the business plan, as there are some paid plans you can download from the internet, but they have free trials that are “limited” but are detailed enough for this purpose.
The reason for the business plan is to put down on paper every step that you are going to have to master and control, in detail, if you are to succeed.
You are going to have to do a great job on product research. Just because you like a product or a concept does not mean everyone else does. You need to find out what people are buying and why. Go to a keyword search product and find out.
For $100 you can still get the Micro Niche Finder, which is about as good as anything for finding keywords and keyword phrases so you can tell what people are looking for on the internet. You will also use this for promoting and optimizing your website.
There are some programs out there that can give you some guidance on what people are buying such as WhatDoISell.com which can give you some guidance.
If you don’t have a viable product line that is in demand with large numbers of people, you are just whistling in the wind. So you really need to pay attention to this part, because without an “in demand” product line you are wasting your time.
Next you need to build a website or blog that has high visibility on the internet with the people who are using your product. Do you see how these two items are tied together? The “in demand” product line and the website have to be in lockstep, or you are whistling Dixie in the dark.
Learning how to optimize a website is not exactly rocket science, but it can take lots of work. One sure way to do it though is to build lots of smaller websites around each product. That way the product can be in a niche of its own with less competition, and those niche websites will be what the buyers find.
So if you are selling natural health products, you would not use that as your title, as it is too general. You would want to use a keyword like, “natural sleep aid” and build the website around that, because you are focusing on what people want instead of a product. Get people to one of your websites and show them what they are asking for in each niche.
Now, for the source of your products. There are manufacturers who will do drop shipping. The problem is that you have to find them. That is a very difficult task, as you are going to have to call a lot of them to find who might work with you. That can take a long time.
To save you time, you should consider a company called World Wide Brands. This is more of a drop shipping brokerage, where World Wide Brands has already pre-screened companies who are already in the drop shipping business and who would work with you.
World Wide Brands also has a product sourcing tool that has a market research function that can be a big help in giving you an idea as to which products can be successful for you.
World Wide Brands has been in this business for the past 20 years or so, and you can buy a membership with them for around $300 that gives you access to all of their sources.
Another similar organization is a company called Store Coach which also has a listing of willing manufacturers who will do drop shipping. One of the bullet points on your business plan is to nail down your suppliers (note the plural) before you waste too much time getting into this.
Finally, it is suggested that you become a trend watcher, in that by keeping up with trends in your product area, you can always be up to date. This takes a constant commitment to being a good researcher, but with the right tools, it can get a lot easier.
Finally, when you get all of the pieces put together, drop shipping is a great business model. When the relationships are sound and you and the suppliers find it mutually beneficial to work together, everyone wins. The Manufacturer or wholesaler has a new business outlet, and you have a new and profitable business.
Note: I took a chance on naming World Wide Brands, but they are the most experienced entity around when it comes to sourcing and identifying suppliers. Store coach is smaller, but they have some interesting and unique concepts too.
Feel free to insert another company if you wish, as I did not know if you are promoting your brand or not. Thanks, for the opportunity to serve you.