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.

Nowshade Kabir is the founder, primary developer and present CEO of Rusbiz.com. A Ph. D. in Information Technology, he has wide experience in Business Consulting, International Trade and Web Marketing. Rusbiz is a Global B2B Emarketplace with solutions to start and run online business. You can contact him at mailto:nowshade[at]rusbiz.com, http://ezine.rusbiz.com/archivenews.html?n l_oid=47

---

Set Yourself Apart From The Ordinary

I have written at length about the need to anticipate... Read More

Saving Money On Your E-commerce Site

After building and transferring many e-commerce sites it still amazes... Read More

How to Boost Conversion Rates, While Lowering Merchant Account Fees!

Using an Address Verification System (AVS) when processing your online... Read More

Shopping Cart Abandonment ? Discover 5 Things you can do to Lower Cart Abandonment

A common frustration among merchants who sell online via a... Read More

Online Credit Card Processing - How to Accept Credit Cards - Ecommerce 101

Back in 1998 (through 2000 or so), I worked for... Read More

The Art of Being Human

This isn't the first time I have written about the... Read More

Accepting Credit Card Payments Online

Being able to accept credit cards and other online payments... Read More

Electronic Commerce Tax Jurisdiction and Principles of Permanent Establishment

The principle of "permanent establishment" is very important for avoidance... Read More

Precautions Necessary for an Online Brokerage Business

Maybe no business requiring little or no capital pays as... Read More

Implications Of E-Commerce For Tax Legislation

As e-commerce develops ambiguities in the current tax code in... Read More

Overcoming Frustration with Technology

For whatever reason, when we get a new boost in... Read More

Online Shoppers Say They?ll Buy from Small and Large E-Businesses Alike

As the holiday shopping season begins in earnest, consumers say... Read More

The Plain Man?s Guide to Making Money Online

I'm a plain man who uses plain thinking in devising... Read More

How To Sell Websites Fast !

This article will explain in depth the steps needed to... Read More

Old Habits Die Hard in the Third Age Years

I spent a lifetime in retailing and I'm still at... Read More

Rules for Achieving Online Success

The Internet brought a great deal of benefits to our... Read More

How Measuring Key Performance Indicators Can Improve E-Commerce Strategy - Part Two

Why time spent on your site is importantAll websites regardless... Read More

Web Users Crave Familiarity

The sad truth is, general Web users would love it... Read More

Products for a Successful Web Business

There are F words in business. We have seen many... Read More

E-Commerce Is Back On The Fast Track

How much holiday shopping did you do on-line this year?... Read More

Pitfalls of Doing Big International Brokerage Business Online

Nothing has helped international brokerage business more than the internet:... Read More

How Merchant Accounts Can Save You Money

We all know that accepting credit cards is the key... Read More

7 Key Steps To Reduce Refunds and Chargebacks

One sure-fire way to loosing out big time on your... Read More

Creating The Perfect Ecommerce Website

If you're thinking of jumping on the bandwagon and going... Read More

7 Questions to Ask A Potential Internet Merchant Account Provider

Recently I went looking for an online merchant account, with... Read More

Ecommerce - Boost Your Business ROI

Did you know that over 90% of all online orders... Read More

Content Ever be Profitable?

THE CURRENT WORRIES1. Content SuppliersThe Ethos of Free ContentContent Suppliers... Read More

A Tale of Two Revolutions - Ecommerce: A Historical Perspective

The World As It Then WasThe dynamic economic growth of... Read More

How E-commerce Web Site Design Differs From Normal Web Design

When it comes to e-commerce everything is a little bit... Read More

Working With Drop Shippers

Drop Shippers, the manufacturers or distributors who are willing to... Read More

The Five Steps of E-Commerce

You set up a retail business, you advertise in your... Read More

How Do You Make Money Online?

If you learn how other people make money online, I... Read More

Using Drop Shipping for E-commerce

Thanks to the ubiquity of the internet, online virtual businesses... Read More