Drop-shipping - a great way of making money online

Using the Internet to sell products and services to ever
increasing number of net users is a good way to start your own
business. If you are not taking advantage of this great
opportunity you are just missing the boat! Consider this:
e-commerce, contrary to popular believe, is thriving and
increasing at a double digit growth rate. According to Jupiter
Research, Online sales during this holiday season in United
States are expected to reach $21.6 billion, a 19 percent
increase over the same period last year. Jupiter also predicts
in the report that 86 million U.S. residents will make holiday
purchases online this year compared to 73 million last year,
which is an 18 percent increase.

No doubt that this is the right time to get into online
business. Building a website for selling products or services is
no longer that difficult. You can make your own website by using
available sophisticated but easy-to-learn-and-use programs like
Macromedia Dreamweaver, Microsoft Frontpage, Adobe Go live, etc.
There also exist various online web store builders similar to
Rusbiz.com, which allow you to create powerful web stores using
simple editors and numerous templates. You can also setup a
store with E-bay and sell products through it. Finally, you can
hire professional web designers to develop your website. So, the
important question isnot how to get online, but what to sell on
the Internet?

In one of my articles - What to sell on the Internet?
(http://ezine.rusbiz.com/archivenews.html?nl_oid=19) - I wrote
about selling information products. Although this is an
interesting concept, you might think that this is not your cup
of tea; and you still prefer to work with some tangible
products. In ideal scenario, probably, you want to sell a
product of your choice but don't want to carry your own stock
and don't want to handle the shipping. Is there a way of doing
this? Yes, there is! It's called "Drop-shipping".

What is drop-shipping?

When a manufacturer, wholesaler, distributor or importer, after
receiving an order from their retailers, individually pack and
deliver the product to the customer of the retailer with
retailers address as shipper, this selling technique is called
drop-shipping.

The advantages of drop-shipping include:

- You do not have any inventory. So, there is no stock carrying
expense involved. - You pay for the item only when it is sold
and you got paid from your customer. You don't need to invest
money in buying the product. - You can sell just one item at a
time. No minimum quantity required. - Your drop-shipper will
supply you with necessary product image and specification. You
don't have to spend money on creating your own. - You fix your
own selling price of the product. Convenient, when you know your
niche market well. - You can offer various products on your web
store from multiple suppliers.

Select a product to sell

Once you decided to go with drop-shipping you need to find
products to sell and find drop-shipping suppliers for those
products. According to the same report from Jupiter following
are the most favorite categories for online shoppers: Books - by
far the most popular category, after that comes clothing and
shoes, music, toys, video tapes and DVDs, gift certificates,
consumer electronics, accessories, videogames, bed and related
items, and bath items. You should also consider that this year,
total Internet sales of consumer electronics are expected to
rise 32 percent to $7.5 billion, making it the fastest growing
group among all retail sales categories online.

The market research wizard developed by Worldwide Brand Inc. is
a great tool, which shows in a probability scale whether it is
worthy trying to sell your selected product online or not. You
can find it over here. (http://www.worldwidebrands.com/?8188)

Locate drop-shipping companies

After selecting the product the next step is to find a reliable
drop-shipper for it. This might not be an easy task! The things
that you should look into a drop-shipper are the followings:

1. A reputable supplier with drop-shipping experience 2. Ready
to ship one item at a time 3. Do not ask for any membership
payment 4. Will use your name as shipper 5. Will enclose blank
invoice or invoice from you 6. On the packaging there will be no
indication that they are the supplier.

You might think that the easiest way of finding a drop-shipper
is just to buy one of the numerous lists on the Internet for
sale. I won't recommend you to use them for number of reasons.
Often, these lists are outdated or carry wrong information. Even
if you find the companies through the lists, since many people
use these lists, you get into fierce competition for market
share not even starting to sell.

Use the following approach instead:

Online search

The first step is, naturally, to use the search engines. Using
various combinations of the keywords of your product with words:
manufacturer, wholesaler, drop-shipper, dealer, see if you can
find the original source of the product.

If several online retailers are already selling this product, do
some detective works! Check out the sites thoroughly. May be,
you can find a clue, which will help you track down the supplier.

If it is an imported product go to the sites like Alibaba,
ecplaza, Rusbiz, trade-india. Locate the manufacturer and get in
touch with them to find who you should contact in your country
to retail sell their products. If the product is manufactured in
North America, the best source to find them is Thomas register.

Trade exhibitions

You should definitely attend the trade shows related to your
category of products. This is an easy way to find a number of
suppliers, who might be willing to work with you.

Trade magazines

Trade journals and publications are also a good resource for
finding suppliers of your products. Although, you might have to
go through a sizable quantity of them before you stumble on the
right supplier.

Conclusion

Drop-shipping has some inherent drawbacks too. The biggest of
them is you have to totally rely on the drop-shipper to fulfill
your order and get the product to your customer on time. The
others are: you don't have any control over the price or
availability of the product. However, a good drop-shipper cares
for his reputation since his business depends on retailers like
you. That's why you have to be very careful in choosing the
right drop-shipper.