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Take Advantage of Drop Shipping
Drop shipping has been around for quite a long time now and is the backbone of many eCommerce websites. Instead of stocking the products you sell, you pass on the order to a drop shipper who then delivers the products to the customer. Your margin is the difference between what you collect from the customer and what you pay the drop shipper. If you are good at sourcing great products at lower prices, drop shipping has several advantages.
The greatest advantage of using a drop shipper is that you don’t have to worry about stocking products, which involves a lot of money and can be risky business unless you have high volumes. You also don’t have to deal with packing and shipping products, losses in transit, returns and many other troubles that come with handling products yourself. While there are many good drop shippers, there are a few things to keep in mind while finding the right drop shipper for sourcing great products.
The supply chain
The three main parts of supply chains are manufacturers, distributer’s and retailers. This is the simplest way of putting it and there could be many more players in supply chains. Any player in the supply chain is a potential drop shipper and a candidate for sourcing great products.
Most large manufacturers will sell only to a distributer, so only small manufacturers may be willing to drop ship. Most potential drop shippers can be found among the distributers and retailers. Both have their advantages and disadvantages.
A distributer gives you only a limited range of products but will be able to give you better prices when compared to retailers who take part of the margin. Retailers deal with many different products from many manufacturers and will be able to fulfil orders for a wider range of products. Having a wider range of products to sell allows you to rank for a variety of keywords, and it will be easier to make the eCommerce store popular with both the search engines and your customers.
Retailers usually agree to drop ship only if they don’t have an online store of their own and don’t intend to have one, otherwise they would be simply helping a competitor get a foothold into their market. Drop shipping is a lucrative business for retailers who do not have an online presence because they get customers without making any marketing effort.
Location of the drop shipper
Online stores must pay a great deal of attention to the quality of their products, the speed with which it is delivered and the overall quality of customer service. Since the drop shipper is involved in critical parts of the customer end of your business, it is important that they are reliable and efficient. Nothing turns off customers more than delivery delays, lack of information, damages in transit, and having to go through the trouble of returns.
Most of the above mishaps are more likely to occur if your drop shipper is located far away from your target market. So, while sourcing great products at excellent prices, you also must pay attention to where your drop shipper is located.
Relationship with the drop shipping company and information flow
While choosing a drop shipper, make sure that they are clear and transparent about what and how much they have in stock and communicate changes in stock positions to you regularly. After going through all the pains to get and convince a customer to buy from your website and collecting payment, you don’t want to find out that the drop shipper does not have it in stock or worse they hide that fact from you and are keeping the order dangling while they wait for their supply to arrive. It is very frustrating for you and your customer if you must cancel the order and then go through the hassles of refunds.
Popular places to find drop shippers for sourcing great products
The best way to find great drop shippers is to use a drop shipping directory. The directory does a lot of ground work weeding out the fake companies and those with poor service, so you have a high-quality list of companies as a starting point. Another advantage of drop shipping directories is that they often have great many products on offer, all neatly classified, so it becomes easy to source great products.
One such directory is World Wide Brands who provide an excellent service by putting all companies listed by them through scrutiny. They have more than 7,500 drop shippers in their list. They also help you with some market research giving you statistics on items selling on popular shopping sites like eBay and tools to estimate the profitability of selling a product. Overall, it is a highly reputed directory and will be a nice starting point for sourcing great products.
Another great directory is Salehoo. Though they have a list much smaller than World Wide Brands, they do have some nice companies and their services are cheaper making them a good option for those just starting out. They also help you in sourcing great products by providing nice support through their forum.
Doba is another popular website that you can check out, but their prices tend to be high and they operate on a slightly different model. You must buy the products from their website; however, despite the thinner margins, they have a huge variety of products on offer.
Finding drop shippers for sourcing great products is easy if you know where to look and what to look for. Drop shipping directories are an excellent starting point.