Ever wondered how eBay items get to the customers? Well, let's say, eBay is port A, and you are sitting at port B. eBay needs a middle-man to get the product to reach port B. That's where drop shipping comes in place. If you're in it, then what you do is find a buyer, buy the product from the original producer, charge your margin to the consumer when you sell it to him/her. You basically become the retailer for a customer, transporting goods from the wholesale provider to the customer.
Establishing a Drop Shipping Business
There are certain things you need to take care of when you start drop shipping. I've provided you with all the important things you need to know if you decide to start.
Why Drop Shipping is Good?
There are certain heavy advantages in this profession. Use them wisely and you will have yourself a pretty serious source of income:
- You don't need to actually possess any items or an inventory with you. All items are provided by the wholesale outlet. This means you don't need to store any extra items with you, probably having to sell them off at discounted prices later.
- You don't need to do the shipping either. This will be explained later in detail.
- You get sale credit for the product sold, if the main distributor chooses to stay out of the credit loop. Good publicity always gets more customers.
Here's a checklist for you when you start up on your drop shipping business:
- Check the shipping options that the distributor may provide.
- Establish yourself as a corporation. This will not only protect you from name-grabbers, but it will also provide you with some great incentives if you do it from good corporate site management service providers.
Steps To Your First Sale
I'll now explain the favorable scenario using the steps above:
- You found product X to be selling pretty well; decent numbers and in a steady pattern.
- Get to know the distributor's policies better. There will be some distributors that have strict rules as to where you may be able to sell their product. You need to gather as much information about all the little details right now to avoid choking later. Here, you need to give the distributor your business and credibility information, like your official business name and tax ID number.
Things To Take Care of
There are a few to-do things that need to be done on a regular basis.
- A follow-up on the product after it is shipped to the customer is necessary. If the customer is unhappy with the product, you may need to replace it with another one. This will also give you a general feedback on the product, so you can constantly check the demand for the product. You keeping a good relationship with the customer also sends a positive image to the customer, improving your publicity.
- Keep a tab on the production and storage capability of the distributor. You don't want to make a sale only to know that the distributor doesn't have any products at the time.
- Maintain your site/eBay page regarding shipping details, whether they will be on time, delayed, or canceled. Make sure your policies are crystal clear on the site to avoid misunderstandings.
That's pretty much how you start up a drop shipping business. Follow the steps right and be sure of yourself. Be prompt and clear at all times. Maintain a good customer relationship and you'll never have a problem with your business.