Cut StartUp Costs By Using a Dropshipper
Cut StartUp Costs By Using a Dropshipper
A: Setting up relationships with companies who will ship merchandise directly to your customers for you-- dropshippers, as they're called
--are an excellent way to start your e-business and, if done properly, don't have to be a costly endeavor. There are literally hundreds of companies out there that will dropship products for you, everything from gifts and housewares to power tools and furniture.
In a nutshell, here's how dropshipping works. You set up an account with a dropshipper (or multiple dropshippers who offer different kinds of products) who provides merchandise that you can sell on your Web site. The dropshipper typically supplies you with images and product descriptions that you can use to build your online store or feature on static HTML Web pages.
One company that offers a variety of turnkey, dropship packages can be found at:
Power Pak Gifts
When a customer places an order for the product on your site, he or she pays you for the product. You, in turn, place the order with the dropshipper and pay them for the product. The dropshipper then ships the item directly to your customer under your company name. To your customer's knowledge, the product was shipped by you.
Dropshipping offers many advantages to the shoestring online start-up. You don't have to pay for an item until it sells, and your customer pays you, so your personal cash outlay for the product is zero. You never have to handle or warehouse the merchandise, as order fulfillment is handled by the dropshipper. You can also offer a wide variety of items from multiple dropshippers, and your end customer is none the wiser.
Dropshipping does have its downsides. Since you do not actually stock the products featured on your site, you have no control over inventory management, product availability, order fulfillment, shipping processes and so on. Still, if you do your homework and establish a good relationship with a reputable dropshipper, the problems you experience should be few.
Your goal should be to find a dropshipper that will ship items one at a time instead of requiring that you purchase a fixed minimum number of items each time (single-unit purchases vs. minimum-order purchases). With this arrangement, you don't have to invest your limited cash reserves in inventory that might not sell (and that sits in your garage for months).
Thanks to the stiff competition the Web has created, many dropshippers will now do business with you without requiring that you have a tax ID number. You simply set up a reseller account (you're the reseller) and start marketing the products on your site. Account registration can often be done online at the dropshipper's Web site. With this process, you can literally be selling products within minutes of setting up your reseller account.
Be warned, however, that some dropshippers are not as reliable as others. Also, be aware that some companies who claim to be dropshippers are really middlemen who have positioned themselves between the online merchant (that's you) and the real wholesale merchandise distributor. These middlemen will eat into your profits and usually don't offer much in the way of customer support and service. They can actually hurt your business more than help it, so make it a point to do business only with--and directly with--established, reputable dropship companies.
Spend the time to research the dropshippers doing business in your particular product category, and try to get feedback from their current customers. Remember that your customer doesn't know (or care) that the product they are purchasing from you really comes from a dropshipper. If there is a problem, your customer will come back to you for resolution, not the dropshipper, so make sure that the dropshipper you use has a policy for resolving problems quickly.
Setting up an online store that offers merchandise from dropshippers doesn't have to be expensive or time-consuming. However, this brings up the age-old question: If I build it, will they come? The age-old answer is: Only if you let them know you are there, but that's another column.
Power Pak Gifts
Here's to your success!
Cut StartUp Costs By Using a Dropshipper - To learn more about this author, visit Tim Knox's Website.
Like this article? Share it with your friends
Q: I'm starting an online specialty shop that sells gifts and home accessories. I want to be able to have items dropshipped to customers through my site. I already have a Web site and a domain reserved, but I don't have a lot of money to get this going. Can you offer any insight?
A: Setting up relationships with companies who will ship merchandise directly to your customers for you-- dropshippers, as they're called
--are an excellent way to start your e-business and, if done properly, don't have to be a costly endeavor. There are literally hundreds of companies out there that will dropship products for you, everything from gifts and housewares to power tools and furniture.
In a nutshell, here's how dropshipping works. You set up an account with a dropshipper (or multiple dropshippers who offer different kinds of products) who provides merchandise that you can sell on your Web site. The dropshipper typically supplies you with images and product descriptions that you can use to build your online store or feature on static HTML Web pages.
One company that offers a variety of turnkey, dropship packages can be found at:
Power Pak Gifts
When a customer places an order for the product on your site, he or she pays you for the product. You, in turn, place the order with the dropshipper and pay them for the product. The dropshipper then ships the item directly to your customer under your company name. To your customer's knowledge, the product was shipped by you.
Dropshipping offers many advantages to the shoestring online start-up. You don't have to pay for an item until it sells, and your customer pays you, so your personal cash outlay for the product is zero. You never have to handle or warehouse the merchandise, as order fulfillment is handled by the dropshipper. You can also offer a wide variety of items from multiple dropshippers, and your end customer is none the wiser.
Dropshipping does have its downsides. Since you do not actually stock the products featured on your site, you have no control over inventory management, product availability, order fulfillment, shipping processes and so on. Still, if you do your homework and establish a good relationship with a reputable dropshipper, the problems you experience should be few.
Your goal should be to find a dropshipper that will ship items one at a time instead of requiring that you purchase a fixed minimum number of items each time (single-unit purchases vs. minimum-order purchases). With this arrangement, you don't have to invest your limited cash reserves in inventory that might not sell (and that sits in your garage for months).
Thanks to the stiff competition the Web has created, many dropshippers will now do business with you without requiring that you have a tax ID number. You simply set up a reseller account (you're the reseller) and start marketing the products on your site. Account registration can often be done online at the dropshipper's Web site. With this process, you can literally be selling products within minutes of setting up your reseller account.
Be warned, however, that some dropshippers are not as reliable as others. Also, be aware that some companies who claim to be dropshippers are really middlemen who have positioned themselves between the online merchant (that's you) and the real wholesale merchandise distributor. These middlemen will eat into your profits and usually don't offer much in the way of customer support and service. They can actually hurt your business more than help it, so make it a point to do business only with--and directly with--established, reputable dropship companies.
Spend the time to research the dropshippers doing business in your particular product category, and try to get feedback from their current customers. Remember that your customer doesn't know (or care) that the product they are purchasing from you really comes from a dropshipper. If there is a problem, your customer will come back to you for resolution, not the dropshipper, so make sure that the dropshipper you use has a policy for resolving problems quickly.
Setting up an online store that offers merchandise from dropshippers doesn't have to be expensive or time-consuming. However, this brings up the age-old question: If I build it, will they come? The age-old answer is: Only if you let them know you are there, but that's another column.
Power Pak Gifts
Here's to your success!
Cut StartUp Costs By Using a Dropshipper - To learn more about this author, visit Tim Knox's Website.
Like this article? Share it with your friends
| |||
 |
No article feedback found. | ||
|
Leave Your Feedback | ||
|
|||
 StartUp Costs
| |||
| Every business is different and has its own specific cash needs at different stages of development; therefore there is no generic method for estimating your startup costs. Some businesses can be started on a shoestr... |
|||
|
Finance Start-Up
| |||
| In order to determine how much seed money you will need, you must estimate the costs of your business for at least the first several months. Every business is different, and has its own specific cash needs at differ... |
|||
|
Cut StartUp Costs By Using a Dropshipper
| |||
| Dropshippers, as they're called
--are an excellent way to start your e-business and, if done properly, don't have to be a costly endeavor. There are literally hundreds of companies out there that will dropship pro... |
|||
|
Breakeven Analysis
| |||
| Breakeven analysis is a tool used to determine when a business will be able to cover all its expenses and begin to make a profit. For the startup business, it is extremely important to know your startup costs, which... |
|||
|
Dropship Your Way To eBay Success
| |||
| Dropshipping has been around since Sears first started selling goods from its mail order catalogs over a hundred years ago. However, the idea of dropshipping still confuses many people who don't understand exactly h... |
|||
| |||
Bernard ReberBack in late 1992, MS Access hit the streets. About that time the company I managed needed new software to handle their growing client base and I decided to try this new product. I had little difficulty writing and adapting a database to suit us and discovered a hidden talent for programming. A business was born. With business studies and 25 years of management experience in three different countries under my belt, I could offer a unique combination of skills and my customers agreed. From these humble beginnings my software 'invoiceit' emerged in 1999 and has since been taken to 49 states (hello Wyoming, won't you join us?), all across Canada and more than 70 other countries. From the very beginning the program included cashbook accounting, the simplest form of keeping financial business records. The Dictionary.com defines 'cashbook' as "A 'book' in which to record money received and paid out". For 'book' substitute 'simple software' and that's what I'm about. Now I have published Simple Accounting, an inexpensive spreadsheet solution which even you can master. For just $14.95 it costs less than a takeout meal! More at http://www.scrambled-card.com/simple_accounting_main.htm - Visit Bernard Reber's Website |
|||
|
To learn more about the Evan Elite Author Program please contact us. | |||
 | |
 Tim Knox (Visit Tim's Website) Tim Knox, Entrepreneur, Author, Speaker, Radio Host Founder, The Insiders Club, Giving You The Power To Start Your Business Today www.thein sidersclub.com Bestselling Author of: "Everything I Know About Business I Learned From My Mama" www.timknox.com
|  |
 |
|
|
 |
| Tim Knox Talks About Starting An Online Business - EvanCarmichael.com expert Tim Knox discusses the advantages of starting an online business and the profitability of creating information products. |
|
|
|
 |
| Modeling the Masters: Learn the true secrets behind Walt Disney's business success factors & grow your company! Video produced by Phanta Media |
|
|
 |
| Have you written articles that would be of value to entrepreneurs? Become an expert on our site by publishing them! Expose yourself to a wide audience, drive more traffic to your website and get more sales! Click Here for details. |
 |
 | ||
 |
||
 |
||
 |
||
|
| ||
|
|
|
Get advice & tips from famous business owners, new articles by entrepreneur experts, my latest website updates, & special sneak peaks at what's to come!
|
|
|
 |
 Tax Splitting Example High Quality Sales Leads Manage, Click, Learn. 2009 Radical Green Business The Leadership Edge |
|
 | ||
 |
Top 50 Blogs For Startups
Top Blogs To Watch In 2008 | |
 |
Top 50 SEO Posts - 2007
Top SEO Posts of the Year | |
| ||
 |
|
|
|
|
|||||||||||||||||||||||||||
 |
|
|
||||||||||
