Dropshipping is a popular way for e-commerce owners to start up their business because it doesn’t take much capital or warehouse space to accommodate a large inventory at the beginning. Instead, you market your wares online, and customers receive their order directly from the supplier. The goods are shipped right to the customer from the warehouse, and you pocket the difference between the wholesale and retail price.
While it sounds like a good deal for anyone who wants to launch an e-commerce business, there are a few elements regarding dropshipping that you need to know to ensure your success.
Plan to do Your Homework
Dropshipping isn’t a business model that any e-commerce business owner should rush into, since one bad experience with an unscrupulous supplier could be the beginning and end of your eBay career.
Take the time to research the various dropshipping companies available, the products they offer and the prices they charge. Don’t expect other e-commerce owners to readily share company names with you, since suppliers are often a well-kept trade secret. However, once you find companies on your own, visit the dropshipping feedback threads to determine whether other business owners have had success with the company you are considering.
Don’t Believe Everything You Read
When you start up your Google engine, beware some of the dropshipping websites that come up on your search. Many of these so-called sources for dropshipping information are really dropshipping companies in disguise. They have a distinct interest in luring you in, rather than providing you with good information to make you a savvy entrepreneur.
Consider the source of the information you choose, and when in doubt, check with other e-commerce owners on our forum to find out if your source is reliable.
Choose a Reputable Company
With the name of a dropshipping company in hand, you can research in earnest, checking forums and online reviews to determine whether the dropshipper you have your eye on is reliable and reputable.
Check with business agencies to see if the company has had any complaints posted against it and talk to other e-commerce owners to see if they have had any trouble with the company.
Get Samples of the Goods
Whenever possible, get samples of goods from dropshippers before selling their products. This provides you with the information you need about whether the items are of high quality and gives you an idea of the type of service your customers will be able to expect from the dropshipper.
Another way to sample dropshippers’ goods firsthand is to visit tradeshows, where samples will likely be available for your consideration.
Request Your Name on Packages
When your dropshipper sends out your orders, which company name appears on the package? Many dropshippers will put the e-commerce business on the package to breed familiarity with you and your customers. That way, if your customer wants to order additional goods, your business name is fresh in his mind.
Dropshipping is a good way to get started in e-commerce, but it is not without its share of pitfalls. By taking the time to do your homework and research both the business and the companies you might want to work with, you are more likely to build a successful and lucrative dropshipping business.