Many people who are first investigating methods of making money online come across dropshipping, but are unaware of what it is and the power it has to make money. Instead they simply skip across it worried about not having the technical knowledge, where in fact nothing could be further from the truth.
Dropshipping itself is a very simple concept. The person seeking to make money online either sets up a e-commerce website where he or she advertises numerous products (more on what those products can be later) or they advertise it on a ready made site such as Ebay.
The items aren't ones that the individual has, far from it, in fact the whole idea of dropshipping is that they don't have to every physically touch the product. Instead the person setting up the site or auction advertises items that he has found available at dropshippers.
A dropshipper is a company that has bought in a huge amount of stock at wholesale (or ideally is a wholesaler or direct manufacturer themselves) and are willing to sell the items individually at a marked up rate, but one that is still dramatically below the regular retail price. They will hold the items in stock and then, when contacted by someone selling their wares through websites and auctions, will deliver the items directly to the customer rather than to the individual selling it on their site.
This enables the individual who has the e-commerce site or Ebay auction to advertise it at a price that will turn them a good profit on each sale, without the expense of buying the items in wholesale or having to store the items. It also means that difficulties such as stock control, delivery, etc are dealt by someone else.
The individual, feed by such concerns, is able to concentrate on marketing his site or auction, and driving enough custom through the sales pages to ensure they are making plenty of money whilst the dropshipper is dealing with the back end sales work.
It can also allow the site or auction owner to set up numerous businesses in a method they would never be able to do in a traditional business. Because of the low cost and risk aspects of the dropshipping model it is possible to easily set up in numerous niches and product verticals, an inexpensive way of testing different areas of making money, and of diversifying his or her income streams.
So what do you need to start dropshipping?
- A reliable dropshipper. It is no good working with a dropshipper who is going to let you down, you are trusting them with the back end of your business. Instead it is important to make sure you find one you are happy to work with and who you trust.
- A website. It's up to you whether you set up your own e-commerce site or use an established site such as Ebay, both have costs and fees.
- Customers. Either you need a way of bringing in customers, whether Google, advertising, PPC etc, or you again use an established site such as Ebay who is able to provide customers for you.
As you can see dropshipping is a lucrative business model that can be overlooked by people starting up at making money online. Make sure you don't make the same mistake and do some research into the industry, it could well be the best business decision you ever make.
