eCommerce Drop Shipping

All right, let’s say that you fall in to the 80th percentile of people whom do not have a product or service of his or her own to sell. You are in good company! And you have a lot of decisions to make. But these decisions are a little bit more fun than some of the others.

The first decision is, if you have your wish what would you sell?

I chose to sell something that I had some knowledge about.  This a key concept.  It wasn’t because it was a matter of convenience. Heck NO!  If anything, if you go to Google and type in “Sword” in the search engine there, you have about 1000 different ones to choose from.  So there was already a ton of competition.

But I have become quite the collector over the years and have learned what makes one sword different from the other. So when a potential customer comes looking for a sword, and they want to educate themselves about the different type, brands, metals, etc., I am there for them, ready with all the information that they need.

So when it comes time to buy a sword, I hope they choose me over the dude who is selling swords along with the AB-Roller and decorative soap.

It’s about being the expert in your field. Short of that, it’s having killer customer service, great prices and knowing how to reach your audience.

Lets get the most difficult part out of the way.  You need real products to sell, so let me give you a few ways to find them.

The ideal online store where you are selling a product is one where you do not have any inventory.

Most of us don’t have thousands of dollars to shell out on a pallet of products that we are not even sure are in demand.  Even if you do have that kind of money, I would caution you to not start by having a physical inventory of anything. It’s just far too risky. Until you have identified a viable marketplace and a product that the market responds to with regularity and predictability, tying up your cash by owning inventory is not smart thinking.  There is a better way.

DROP SHIPPING!

A Drop Shipper is a wholesale company or manufacturer of real products that only sell to real-legitimate business. (I.e. business that is registered with a Tax ID. Cost? About $65 depending on which state you live in). What I mean when I say “ sell to legitimate business” is this:

You take an order from your online store for a nice set of wind chimes, or maybe a power drill.  You sell your product for $70.00 plus shipping and handling.  You then contact your Drop Shipper or Drop Shippers (you can have as many as you want covering a wide range of product types).  You buy the product that you just sold online for $70.00 from your Drop Shipper for $40.00 and then the real magic happens.

The Drop Shipper sends the product directly to your customer with your company name on the packaging!

Magic.

Drop Shipping is truly wonderful.  There are literally thousands of Drop Shippers out there.  You can find just about any name brand, just about any category at just about any price point.

The Specifics:

First, you need to become a real business in order to work with a Drop Shipper.  That means you go to your local courthouse and register a business name. Then go to your local IRS office and get a Tax ID number.  This is, of course, for a sole proprietorship or partnership.  If you want to incorporate or form a LLC (Limited liability corporation) check out this site The Company Corporation. There are lots of advantages to being incorporated, including liability and asset protection, but it costs a bit more and takes more time to get started.

Once you have the all of the requisite certificates, you then contact a Drop Shipper and create a relationship with them.  They have you fill out an application, sign you up, and send you a catalog of their products from which you then sell on your website.  Some Drop Shippers may also have a website where you can go and download their images and sales material directly and put it right on your website.

The Drop Shipper sets the price that you pay….

You set the price that your customers pay…

The difference is your profit!

It’s really a great way to start an online business quickly.  You can even do it inside of a week or two if everything slips into place.

Having a relationship with a Drop Shipper is FREE! And if you look more than casually you can find some really unique products (meaning less competition for your store).

What in blazes do I sell?

The $64,000 question. When I first evaluated the vast amount of products available for me to Drop Ship, I was overwhelmed.  Visions of huge virtual shopping malls with my name on the marquee swirled around in my head. And me, swaying in my hammock counting my money…

WRONG!

Even though you will be tempted to sell absolutely everything – don’t! Know this now, you cannot compete with Amazon.com

Maybe you will someday, if the fates have blessed you and you have unlimited cash.  But if you don’t get blessed and have a fixed income – don’t worry! You will not need to compete with Amazon in order to be successful! The key for those of you that want to succeed in online retail is to specialize!  Have a boutique mentality. Not boutique as in knick-knack crap. But boutique as in niche Market.

If you have a personal passion for your Harley – Sell Harley Stuff!

Like NASCAR – SELL NASCAR STUFF!

Why? Not just because you like it, but also because you can TALK ABOUT IT!

For Example; Let’s say your hobby is Astronomy.  You know all about the Heavens and Star Gazing in particular.  USE that knowledge to help your customers make informed buying decisions.  Show them how a Refractor telescope is superior for Astrophotography than a Reflector scope.  Organize a subcategory of your telescopes into a section called “Astrophotography Ready”.

I can’t say this enough – Specialize!

Sell what you know. Especially if it’s a product that you have researched and found it to be “In Demand”.  In addition to making your store stand out vs. the competition, it also helps you zero in on your target market!  And remember, the more focused your audience is, the better conversion rate you will have when it comes time for the shopper to become a buyer.

Stay with me on this – NICHE MARKETS!