Drop Shipping For Beginners – An Overview

Today people are looking for ways to make money online from the comfort of their home. Drop shipping is an exciting way for beginners to earn money working from home. If you have also been looking for genuine online money making opportunities you should look at drop shipping. Drop shipping for beginners can be a bit tough and in this article we will discuss some useful tips to help newbies succeed with it.

Drop shipping is a bit similar to affiliate marketing and you can make a lot of money with this method if you know the tips and tricks of succeeding with it. In this article we will discuss the basics of drop shipping to help beginners get started and also some pros and cons of this method of earning money from home. You should remember that you should do your research to ensure that you find the right companies to work with thereby improving your chances of making money with drop shipping.

What is Drop Shipping and How Can Beginners Start?

Drop shipping is the method of selling other people’s products online. It is a bit similar to affiliate marketing but you have chances of making higher profits with drop shipping. In this method you have complete control of how much the product costs and the amount of profit you want to earn which is not the case in affiliate marketing where you only get a certain percentage of the total amount of the sale as your earning. You need to create an eCommerce site where you can promote the product, process the order for the customer and complete the sale. The manufacturers will take care of the process of shipping the product to the customers.

Dropshippers prefer working with Ebay, Amazon and other reputed online marketplaces. Today many people are also opting for eCommerce web hosting packages to make the whole process simpler and easier. It takes some work to build your own eCommerce site but you have better control over the pricing of the products and the amount of profit you can earn.

How to Get Started With Drop Shipping?

Drop shipping is one of the easiest ways to make money online. You will need to sign up for sites like Ebay, Amazon or any other similar sites. You should ideally build your own eCommerce site as it makes the whole process faster and simpler. Amazon also gives you the option of selling your own products along with selling products of other people. You should be aware that when you sell your own product through Amazon or other similar sites a major chunk of your profit needs to be paid to the site which reduces your profitability.

Experts recommend that you should get an eCommerce web hosting package and create your own store as it ensures better control and higher profitability. Most of these packages have some great features making it easier to build your site and get started with drop shipping. When you have your own eCommerce site you decide the products you promote, the method of promotion, the pricing etc. It can take some effort but once you have your feet off the ground you can build a profitable drop shipping business.

Drop shipping has great potential to help you make money online but like everything else it has its own advantages and drawbacks.

Pros of Drop Shipping

Drop shipping is an innovative business model which has its own advantages both for the vendor as well as the retailer. Here are some of the most important advantages of drop shipping:

1) Little start up cost

Drop shipping as a business model does not require a major investment. You can start your drop shipping business with little start up cost. This is a huge advantage for retailers who are new to this business model. You can work on a buying agreement with the manufacturer without the need of making a large order.

2) Low overhead costs

Many businesses have high overhead costs which can decrease the profitability. Drop shipping has low overhead costs which would result in higher profit margins. You don’t need a warehouse or a storage unit to store items with drop shipping. Similarly you don’t need to worry about shipping costs as it is taken care of by the manufacturer.

3) Less Risk

Whenever you start a new venture it involves corporate or personal risk. Drop shipping as a business model has a lesser risk compared to other business models. When you purchase inventory in a traditional business you are required to make a large initial purchase. Drop shipping as a business does not require you to make a huge inventory purchase and this considerably reduces the risk involved in this business model. You will not have unsold merchandise so the risk of your investment getting blocked is less compared to traditional business models.

Cons Of Drop Shipping

Drop shipping as a business model is a great way to make money from home but like everything else it also has a few drawbacks.

Here are some of the cons of drop shipping

1) Less control as a beginner

Drop shipping does not require you to ship items to the customer. You have no control of when the manufacturer ships out the sold items. If there is delay in delivery due to delay in shipping on the part of the manufacturer you lose credibility as a seller. You are putting a lot of trust on the manufacturer and if he is not competent enough your drop shipping business may not get you the desired results.

2) High competition

Drop shipping is a simple business model and does not require any major investment to get started. This is the reason a lot of people are getting into drop shipping making it a competitive marketplace. High competition would mean that you may lose sale to other retailers who are selling similar products. You will need to work hard to stay above your competitors and develop new business strategies as per change in market trends and customer preferences.

Drop shipping is a lucrative business model and many people are making a full-time income from it. Drop shipping for beginners is not easy till they understand how the whole process works. You can keep the above-discussed points in mind and you would be on your way to build a successful and profitable drop shipping business.

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