Dropshipping is an increasingly popular business system, which mostly speaks of the advantages that no start-up capital is required and you don’t have to have your own storage space, since everything runs through the dropshipping partner. But many people only have one idea and are confuse choosing right business model for dropshipping, about where to start and what steps to take to start business. The text gives you an overview of how best to start and what to look out for.
Choosing business model for Dropshipping
The strategy that most people follow is to find yourself the products and retailers who they see fit. While it is true that there are a ton of platforms where you can get the product you want, the risk here is simply that you could end up with the wrong dealer. They can either turn out to be a fraudster, fail to meet delivery deadlines or simply claim that they no longer have the goods in stock – which in turn will only give you a headache.
An alternative to this is to hire an intermediary who deals with the communication between customers and dealers. They know the communication channels and may already have contacts in advance with dealers whose goods you are interested in. The disadvantage of this is that the intermediaries charge a commission in order to recommend the best dealers in a niche to you. The big advantage, however, is that you reduce the risk of getting caught by a dubious dealer.
Now that you’ve decided which business model to use, it’s time to do market research. What you need to do is spend some time on the internet researching everything that it would take to make a successful sale. These are, for example, things like: which product you would sell, from which dealers you would get it, where you would sell it, at what price, what the competition is like, how you would market it, etc. To make your project successful you need to consider a few things:
- that you have chosen a sensible product. It’s not difficult to find the niche you want. Do a detailed research and you will soon have found the product you are looking for.
- that you develop good relationships with good dealers. You have to take your time and filter out the good ones from hundreds of traders.
- how you sell the product. After you have chosen it and after it is available to you, you have the choice of where to sell it. What you should definitely use are well-known portals such as Amazon, eBay, or even Etsy.
How to find a good dealer
Most of the dropshipping retailers are located in China and they are where most of the people get their goods. So if you should choose a Chinese dropshipping partner, the first port of call is the Alibaba.com portal.
Follow the advice and only look for premium retailers and just ignore everyone else, no matter how good and tempting their offer may sound. Trading with Chinese dropshipping dealers also has some disadvantages that you should definitely be aware of.
In particular, the long delivery times and the difficult handling of returns can lead to considerable problems. Here it is very important to choose the right product.
For clothes, for example, different sizes and colors of a product are often ordered, to then send back 4 of the 5 ordered items. This can lead to problems for foreign traders, as you have to pay high shipping fees and the processing of a return can be complicated, especially if customs and long delivery times hinder the process. For this reason, you should also look out for European or even better German wholesalers and suppliers. This gives you much more flexibility in your day-to-day business.
You can also negotiate attractive prices with you, but avoid many problems from the start. There you will find many German suppliers and dealers. because you have to pay high shipping fees and the processing of a return can be complicated, especially if customs and long delivery times hinder the process.
Marketing on the Internet
After you have chosen the product and distributor, the next step is to market your product. At the beginning of your venture, it is also advisable to purchase a small supply of the selected products with dropshipping. Because this allows you to inspect the products yourself and convince yourself of the quality, but also to see whether there are problems or defects with this product that affect the goods themselves, their price or delivery, etc. Respectively.
If everything goes well, you can start selling the product directly from the supplier and start the actual dropshipping business. You should advertise your product on every possible platform, better known ones are Amazon and eBay, for example. You can usually find inspiration for selling or marketing from the most successful sellers of this product.
Good relationships through sales success
In any case, you should use your sales successes to gain as much benefit as possible in the negotiations with the dealers. You could get lower prices as a result, and also take advantage of the sales figures in general.