questions about Drop Shipping

Hello my friends

I have some questions about Drop Shipping because i donnot understand it clearly and have not tried it before.

1 - Could anybody explain it briefly for me ?
2 - What are the risks of this business ?
3 - How much money / time do i need to start in this business and when will the revenue be expected ?
4 - Do you advise me to start in this business knowing that i will be enrolled in Master program later in October this year?

Thanks a lot in advance

 

I've done drop shipping from web sites on and off since 1998 or so ... basically it works like this:

1. You find a wholesale supplier or manufacturer willing to ship their merchandise to your customers under your lablel. There are right ways and wrong ways to do this,... do some more research.
2.You advertise thier goods on your web site, ebay, newspaper, catalog, whatever.
3. You colllect the money from your customer and pay them to ship it to your customer under your name.

Risks:
1. Highly competitive. A LOT of people are doing this on the web and ebay. The profit margins can be razor thin. Find a high demand product in an underserved niche, and you can make a lot.

2. Too much opportunity. Once you start seeing how many places are willing to drop ship, and have such great sales material, you loose focus (I did.)

The key .... Focus, focus, focus. Finda a niche.

The most successfull drop ship program I had sold Cleveland Indian clocks and watches. That's it. No other teams, no other products. They subscribed to a team newspaper and the publisher took the ads on commission. The problem was getting paid took a while.

I tried to expand it to all teams and it flopped.

 

Can you make a decent profit in this area?

 

You can, but you need to be aware of who you dealing with for your products. If you sell inferior products then you will see the backlash later from your customers and suffer with your reputation. It is important to research your potential drop shipping partners.

 

I used drop shipping for airsoft guns and it actually went fantastic. If you have an e-commerce store in conjunction with drop shipping, you can do well.

 

One of the things to be concerned is return policy of the dropshippers. Make sure they take the product back in case a customer returns it.

 

Yep, the above posters gave some sound information. You have to ensure that you are working with a good dropshipper so that your customers will be happy.

 

Drop shipping is a supply chain management technique in which the retailer does not keep goods in stock, but instead transfers customer orders and shipment details to wholesalers, who then ship the goods directly to the customer. The retailers make their profit on the difference between the wholesale and retail price.

 

Can you? Yes, but like all businesses you must calculate your margins ... Things to consider:
Market price: On the web often half or less of suggested retail price. Inclues shipping, handling etc. Web shoppers will find the lowest overall cost, but that's not the only factor.
Your cost: Including membership fees, drop ship fees etc.
Your advertising costs: This is the tricky one. This one will eat your profits if you're not careful. EBay used to be a good bargain but with all their hidden fees, they will eat you alive if you don't watch it.
Support overhead: How much time/effort do you put into servicing your customers. Do you have a phone number? Who mans it? How rapidly do you respond to email? Etc. etc. etc.

 

One thing to keep in mind is that by selling dropship supplier products if they don't deliver as promised, or the items are not satisfactory, you will be the one that gets negative feedback not the supplier. Yes, you can make money this way but like others have said you have to do your homework. Dropship comapnies are a dime a dozen, but only a few are worth dealing with.

I have had more success in finding dependable wholesalers/liquidators to order from. Having the items I'm selling in hand before listing them removes the variable of hoping another person or company makes good on delivery.

 

The advantages to doing it this way are:
1. Quality Control (as you already stated)
2. Price (you can unusually get a price break for bulk quantities.)

The disadvantages are:
1. Inventory Control - You gotta keep this stuff somewhere, and there are tax issues.
2. Your time and effort. You or one of your people have to pack and ship.

All in all, you could be more profitable this way, though, with a higher quality of service.

 

wow! great replies, iam happy for these new info
if i want to start a drop shipping business for books or clothes for example. How can i find reliable good drop shipper ?
And what will be more profitable ? Drop Shipping business model or Affiliate Marketing business model ?

Thanks!

 

How much time and effort do you want to put into the business? How familiar are you with advertising?

You can have the best site in the world, but if there's no traffic, it doesn't matter.

Advertising is part art and part science, when you hit the sweet spot - WOW ... but you can loose it all when the market shifts .. . I used to make $10K a year in passive profit from google adwords. But the price went up, and the conversions when down, and it's gone.

What niche are you most familiar with? You say books and clothes, that's fine, but those are HIGHLY competitive markets, unless they are SPECIALTY books and SPECIALTY clothes. I knew a guy who made a mint on a deer hunting book. Just one book. One niche.

 

Iam FREE till October ( i will start my master then) . When i start my master degree i think i can spend 3 hours on this.

So if drop shipping is ideal for my case .. please advise me so .. or else advise me to find another source of income.

According to advertising , i know some SEO and adwords/YPN..

Iam familiar with other niches too .. Computer Hardware , Herbal medicine, perfume, and a lot of other niches that i used to sell in real life

 

if you are US resident PM me I'll give you some good info. But you are going to need the followings: business license, Tax ID and sales tax id. I've beed doing this for some time, I just don't have time anymore.

 

Anyone tried DVD drop ship?

 

1 - Could anybody explain it briefly for me ? Selling someone else's products
2 - What are the risks of this business ? None
3 - How much money / time do i need to start in this business and when will the revenue be expected ? Hard work and some working capital or credit cards
4 - Do you advise me to start in this business knowing that i will be enrolled in Master program later in October this year? Make the time

 

Thanks a lot for ur kind offer
but iam a Jordanian resident.

 

I have a friend who makes money via drop shipping. He finds low cost markets and then sells those products to the niche buyers. Till recently he was dealing with the items of the Iraqi war, and would sell them in his country Britain, where there were many collectors for these things. It does take time and effort though, coz many guys can rip you off or send substandard stuff, so you need to tread with caution.

 

in my opinion, one big downside of dropshipping is you lose control of the transaction after you send it to the dropshipping company, so basically YOUR reputation is in THEIR hands.