Drop shipping is a distribution method used mainly by online retailers to fulfill orders placed by customers on their e-commerce website. If retailers use a dropship program, they do not hold any inventory, instead all of the products are held as inventory by wholesalers or sometimes even the manufacturers. As soon as an order is placed, the online retailer collects shipping information and payment then the customer order is transferred to the drop shipper to be completed. The drop shipper is then responsible for shipping all of the products that are ordered out to the customer. The online retailer makes a profit off of the difference between the wholesale and retail prices.
Drop shipping is a great way to start an ecommerce business if you don't have much upfront capital. In fact a number of home based businesses have grown to be very successful by taking advantage of this technique to sell online. The first thing you must do is find the right vendors to work with. There are a wide variety of vendors to choose from, but they are not all reliable. The first step seems pretty simple, but the fact of the matter is that finding the right vendor for your dropship program can either make or break your business. The key is to spend a lot of time researching all possible vendors and selecting ones that you feel would work well with you. Consider it a partnership, you take care of getting the order and the vendor takes care of the rest. The only way to have a smooth running e-commerce business and satisfied customers is if both parts of the system work in unison.
The first step is coming up with a list of possible vendors to include in your dropship program. Find vendors that supply products you are looking to sell in your online store and then find out if it's well known and reputable. How long have they been in business? Do they have the ability to deliver what they promise? Are you able to make a profit based on the price you are getting the products for? After you picked out the best of the bunch, contact them about their services and make a small investment by ordering a few products. Then eliminate some by comparing the product quality, the delivery time, inquiry response time and how well they are able to customize the packing slip and shipping label to match your business logo.After making your decision on which vendors to use, you must make sure that your e-commerce solution is capable of managing your dropship program. Make sure they are able to provide the following:
- QuickBooks integration for simple point of sale management and tracking
- Create unlimited amount of vendors
- Instantly contact vendors when their products are ordered
- Shipping is calculated in real time based on drop ship location and carrier
- Admin log-in area for vendors to add products or update inventory
People generally decide to run a dropship program for their business, because of the freedom it offers and low level of risk involved. There are some disadvantages such as not being able to control the merchandise and not being the only retailer they work with. However there are also many advantages for starting this type of business. Here are just a few:
- Minimal or no inventory
- Saves time by having someone else handle the order fulfillment
- Saves money by not requiring a lot of overhead cost
- Product images and details are already available for you to use on your web site
- Huge selection of products to choose from which gives you the ability to sell more than you could on your own
Finding an ecommerce solution with an efficient and reliable dropship program is crucial to the success of your online retail business. You can't simply hope for reliable drop ship vendors, the best way to guarantee that they are doing their job is to have the ability to track and manage their activities from your store admin.
What you need is a full service all-in-one hosting, design, and marketing software made specifically for e-commerce businesses. One that lets you set up your store in minutes, and provides powerful tools to help with not only managing your dropship program, but also SEO, product marketing and mobile commerce. Check out the best possible e-commerce solutions available at http://www.makeanonlinestore.com and try them out yourself absolutely free, no credit card required!
