Does the term DROP-SHIPPING sound familiar to you?
At the end of this article, you would be deciding whether drop shipping is the best e-Commerce idea for you or not especially if you do not have any money to start buying products to sell on your store.
What is Drop-Shipping?
As soon as you learn that it is possible to start a profitable e-Commerce in just a few hours, you were motivated to start. I have had series of friends contacting me because they want to start an e-Commerce website although they have known nothing about it.
What I often do is to explain that the selling side of e-Commerce might be very easier than the buying side for many reasons. I have had students whose main problems where how to source the products and whom to buy from. Those too may not be the main problem.
Here is the main problem that almost every e-Commerce entrepreneur may face -the amount required to procure all the products that you will stock on your website and keeping inventory of many products at any point in time.
Think about an online hand bag store owner who wants to stock up to 1000 different hand bags from different sellers and each of these bags will cost about N2,500. This seller will need to spend about N2.5 million to start this business.
You and I know that most people are choosing to sell online because they do not have enough money required to start stores in real life. Such stores will want you to rent a space, you will pay for your inventory before they are shipped to the store, and you will also wait for a long time to start making your sales.
Drop-Shipping solves almost all the problems associated with keeping a day store at that busy street.
This article will tell you all that you need to do in order to run a successful drop shipping business. It will show you how you can start your drop-shipping e-commerce business in a few hours from now.
But what actually is drop-shipping?
Drop shipping is a business model where an entrepreneur sets up an e-Commerce shop and instead of buying the products and keeping inventory, he sets up product details that he has access to in other e-commerce shops thereby making the owner of the products to take orders and make supplies on his behalf.
This definition is too long I know, but let me try and break it down now.
Drop shipping involves the following:
1. Setting up an e-Commerce website
This is the site that will help you to make sales online.
Understand that you will need to update this site to capture all the products you wish to sell.
2. Source products from other e-Commerce websites
This second part is where drop shipping starts. In a typical e-commerce business, you are expected to buy each product that you want to sell on your website. Drop shipping makes a different appeal. It requires that you source the products you want to sell and make them available on your own e-commerce website.
Do you need to buy them before uploading them on your site?
This is what really makes drop shipping very interesting.
You do not have to keep inventory of the products you are selling. You do not need to buy them before you can sell them.
Drop shipping takes off many jobs from your hand.
Your main duty is to keep your website active, updated with as many products as possible and as you want to sell and make profit, and then working on your traffic to bring people to your website.
3. Make arrangement to collect payments
Because the customers are yours, you will also need to collect payments from them.
Your website would be able to accept deposits via credit cards and other e-processes.
It is a very bad idea sending people to the bank before they can pay you. That gap is enough to make someone change his mind.
Be reminded that most people who buy products online are impulsive buyers and can change their mind if they have to sleep and wake up.
So make arrangements to collect payments from them as soon as they make decision to buy products from you.
Your e-Commerce designer would be able to integrate e-Payment system on your website or you can hire another expert to do this for you. Believe me, e-payment is one of the key features of an e-commerce website.
4. Fulfill orders as they are made
What sets drop-shipping apart from just other e-commerce websites is the system of fulfilling orders.
I need to illustrate this with my personal experience.
After my training with some CleanShield new distributors on how to do health check using the quantum resonance analyzers, I had a flow of distributors who wanted me to supply the product to them.
At that time I only had one Quantum machine and someone among the group had already committed cash to buy it after the training section.
I had about 14 orders for the Quantum machine.
Again, I had another training section in Lagos 2 days after and must leave Ghana the night after this training. How can I send a product that I do not have?
Again, it is very expensive sending items across west Africa than almost any other place in the world.
So here is what I did.
I placed order with the maker of Quantum machine in China.
I have bought machines from their shop for more 3 years and they have even extended credit to me in some instances.
So I placed order for exactly 14 machines and for 3 different people with 13 different addresses in Ghana.
Then I left Ghana for Lagos that night.
7 days after, I started receiving calls from these customers who bought the machine from me.
They were all happy that I delivered the machines on time despite my tight schedules.
In the actual sense, this was what happened.
I took orders from them and ordered a shop that has the products that my customers were buying to fulfill the orders while I continued doing what I was doing.
That way, it was easier and simpler and there was no room for excuses. That way, it was a win-win situation. Everyone benefited. I sold to my customers directly and made my profit. I collected money first and took away my profit even before fulfilling the order.
The seller (the shop I bought from) also benefited because I helped them make sales.
My customers also benefited because they received the items that they needed badly and without stress. Compared to how much they were selling same product in Ghana, they made 45% saving from buying from me.
Above all, they thought I had stock of the product and were willing to make further purchases from me.
Can you now understand the beauty of drop-shipping?
Anybody Can Do Drop Shipping e-Commerce Business
If you have interest in e-Commerce, you can actually do drop shipping.
This is because it is less demanding and can be done without you having to spend a dime from your pocket.
For starters in e-Commerce, my recommendation is that they should learn all the process involved in drop-shipping and start with it.
Drop-shipping is quite profitable and gives you less stress.
You have the option of dealing with many sellers and manufacturers without spending money.
You also can run many products on your website without having to buy them.
This is and ideal idea of the e-commerce world.
In future posts, I will show you how to source products on drop-shipping business and that will guide most of my students who ask me often about how to source products.
Sourcing products to me is one of the major problems people who are new in e-commerce face.
A few steps involved in drop-shipping
Create Your e-Commerce Website: This is the very first step towards a successful drop shipping e-commerce experience. Build a befitting website for your business. Understand that this is where people will see what you are selling before they can buy.
An e-store is a virtual store. It is a store and exists like normal shops you walk into to buy your needs. The difference is that e-store or e-shop exists only on the internet.
Will you prefer to buy your items from a shop that is not stock with enough products or shops taht stock very old products instead of from shops that are well stocked with fresh well organized items?
Almost everybody gets attracted first by the quantity and neatness of a shop.
Same applies to shops online.
Look for a qualified website designer to build you a high class e-commerce website.
I have been building e-commerce sites since 8 years. I have my personal e-commerce site where I sell the mineral Water Pot -a special kind of water filter that makes water alkaline at home.
Visit Product Website and make Source for what to sell: This is another big step in starting your drop shipping business. This is one of the most difficult aspects. I have some of my followers and mentees whose major setbacks include the inability to decide unique things to sell.
For such people, I am dedicating a future post on easy ways to source products for drop shipping.
The truth is that this is an art and once you master it, it will become fun to do your drop-shipping business.
I will refer to the man who wants to sell female hand bags that we mentioned at an earlier time.
Remember that one of his problems was that he will need more than 2.5 million Naira to start his hand bag business if he would stock up to 1000 bags at N2,500.
Let’s see how drop-shipping can help him solve this cash problem and still sell high grade hand bags even without spending his own money.
I have used e-commerce websites like Alibaba.com, Aliexpress.com, DHGate.com, ChinaBuy.com, etc to fulfill my drop shipping orders.
I want to illustrate my points now with www.aliexpress.com.
We want to see how our hand bag seller can actually stock his store with products from many sellers on aliexpress.
Lets visit www.aliexpress.com and this is how it looks today
Search for the product you want to drop ship. But I will suggest you add drop shipping in the content of you search.
While you type drop shipping, suggestive search queries pop up look for related items. But if something related does not appear, go ahead and type your full query.
Let me show you what I got when I typed ” Drop shipping Handbags.”
And this was the result after I hit search icon
If you check well, you will see that we have up to 308 of these product displayed. And you have variety of options or ways to make your product search.
From this point, our shop owner will need to check for hand bags that apeal to him, the ones he feels his customers may like. He will also consider the price and will be able to check for the make and quality.
Everything he need to start publishing the hand bags on his website is already contained on this website.
Copy product details and paste on your website: You need to remember that the products are not made by you and you are also not buying them to keep stock on your website.
What you are doing is to provide information that will entice the buyer to be ready to part with their money.
Here, you are expected to be direct and comprehensive.
you need to understand that the owner of the product has already written enough information on the sellers website that can help you know what to offer to your customers.
Copy these information and bring them to your website and no one will penalize you for doing this.
Feel free to also add content of your own so long as this will help drive the interest of the one reading it to the point of purchasing it.
Let me show you what to expect when you want details of one of the handbags that we saw on the aliexpress website. This will help you to build on your own while updating your website.
From the above, you can see that building a product base and giving all the details on your own website is already done for you. All you need to do is to copy the most relevant and related materials and paste same on your website.
Fix Your Selling Price: Make enough profit to be able to remain in business but do not be greedy. Online what matters most is traffic. If you have anough people who come to your website everyday and only 2% of these buying will make you good money. So instead of killing the few persons that struggled the fight on search engines to locate you with very high price, why not make a moderate and attractive price available to them.
Pricing products is one of the most confusing topics in e-commerce. Some tutors will tell you to set your price high and people will want to buy it to set themselves apart and others will teach you to keep your price very low to be able to attract more buyers.
This all depends on what you are selling.
If you are selling a product that has very many alternatives and also many sellers with different qualities, you need to be extremely careful how you fix your price.
Once you fix a good selling price for your product, update your e-commerce website to reflect the prices and give discounts accordingly.
Promote Your E-Commerce site: Just like in blogging, if you have a shop and no one knows anything about it, you will not make sales. So promotion is very important if people will see what you have and finally buy from you.
There are countless ways one can make his shop available to other people.
- Blogging: Blogging about your site/shop puts it in front of many others because your regular reviews attract both people and search engines to your site.
- Facebook Ad: One of the quickest and better ways of publishing ads is the Facebook way. I have used Facebook ad several times and the result is so phenomenal.
- Google Adword: Google’s programme for accepting advertisers requests and making them available on publisher’s website is called the Google Adword programme. Using Adword can help one effectively promote one’s drop shipping business.
- You can also have your e-Commerce site link shared by other websites. If this happens, many people will be privileged to view your website and probably buy items from you.
- Stickers: In real world, you can also share info about your e-store by printing stickers and making them go viral. The more your sticker goes around, the more people check your website and the more it is possible for you to make sales.
So there are many ways you can publish adverts about your store and you can also use word of mouth to reach people who will also tell others about your site.
When someone Pays for Your Drop-Shipping Products
This is where drop shipping gets far interesting. Your main work is to make people visit your store. As soon as they make orders, your next work starts.
You will be placing order at the website where you found the product.
The other placed will have instructions and this is where you will inform the seller where and how to send your orders.
Endeavour to tell the seller to use all your details as seller.
This way, the products get to the buyer appearing to have been shipped directly from you.
How you can collect payments in your Drop-Shipping Website
Your Drop-shipping website is your e-commerce website or your store.
It is very easy nowadays to pick up payments on your site than ever before.
There are companies that help you collect online payments. In Nigeria, the most expensive of these is the interswitch payment system. This is followed by the services of eTransact.
But we have other service providers that serve third party merchant services such as VoguePay, Paga, PayU, SimplePay, etc.
We also have international companies like 2CO, Skrill and the likes who accept Nigerian merchants.
With all these in place, your website can be fully equipped to accept payment securely.
This is how payments on your Drop-Shipping Website works
The payment processing platform receives instructions to process payments from the orders taken from your website and transfer the processing to a very secure environment.
Users (buyers) will then be prompt to make payments using their payment cards.
As the platform for the payment is secure, it makes it difficult for either the seller or the payment platform owner to know the credit card information used and so cannot copy details out of it.
After a successful entering of data, the platform checks for accuracy and authenticates the information.
If all goes well, payment is accepted.
after that, both the seller and the buyer receives payment details receipt and the seller now is expected to act on the orders taken.
Pls be sure to do this if you must succeed in drop-shipping business:
- Talk with the seller ahead of time about your intention to drop-ship his/her products
- Talk to the seller as you are ready to make an order on his website. Talking here does not necessarily mean speaking. We can use chat to talk. The most important thing is communicate with the seller.Sometime ago, this caused a problem when a drop-shipping store owner did not communicate well with the seller and all the items he ordered were sent to his personal address.By all means you want to avoid this and you will if you can effectively communicate.
- Take order instruction seriously. Do not overlook important facts about orders. If your customer orders white, and you couldn’t find white on the store where you are buying, communicate back to your buyer and not sending black in alternative.
- Add shipping cost to your orders. This will reduce misunderstanding in future. Do not ever assume that the buyer should know that he/she will pay for shipping. Some goods are sent on Free-Shipping.Also, if you find shops where items are sent for free (on Free-Shipping method), I will suggest you buy from them.The notion is bad if you think that the seller had already added the shipping cost on the item. No! Sometimes, sellers are on promotion that anybody that buys their products within a particular time will receive it free.And some others may be selling at free-shipping because they want to encourage more people to buy and test out their products.Make that choice to buy items that have free-shipping on them as this will help you reduce the price you may be selling the products on your store.
- Take tracking seriously. Endeavour to track your orders. This will help you to know what to tell your customers when they start getting worried about the delays.
- Always be mindful of time. Do not waste time to place an order on your seller’s shop as soon as you receive an order on your e-store. Do not be marked as someone who takes long to fulfill orders. Always communicate with your buyers and they will remember that even if the order delayed.I have read some positive comments on some seller’s websites about the communication even though the products arrived late. So do not hesitate to communicate with your customers before the order is finally on their hand.You could mention one or two things that may cause delay.
You could also talk about how the product works.Never waste time in responding to questions raised by your customer. This is part of what the customer will judge and say you are a good seller or a bad one.
- Commendation and Appreciation. Do not fail to say thank you when you receive payments and make it clear how much time you need to process the order and ship. Understand that processing means waiting for your seller to finish the work on the product and sending it. Understand this business same way you will a situation where you are a manufacturer and some is buying a product you don’t have in stock.You will do everything to keep him waiting before all is ready and finally shipped to him.Also say thank you when order is finally fulfilled and received by the buyer.
Follow up by appreciating efforts made to buy and the time waited before the order arrived.Ask buyer to check back another time as well as to get back to your website to see if there are other things he/she may need more.Ask buyer to recommend your shop to his/her friends who may have need of your products too.
Mention some items you feel your buyer may like in the future.
When there is a discount or a promotion, do not fail to send a mail to your buyers and as part of appreciation for a fulfilled business of the past, that you are extending a promotional offer to him/her.
Do everything to be a good seller. Thanks!
- Never leave an old price on your website.
There are things you need to always do.
– Always check price updates at the sellers website so that you will not run into trouble.
– Always publish up-to-date prices on your website.
– Change prices on your website when prices of things are up.
-Use price discount method when publishing your prices. This means that you will show the real prices in crossed figures and then announce the selling price in normal figures. This is what I mean. See pic below:
Prices on red are the assumed original sales price and the prices on black are the discounted prices and that is what will be calculated for the customer.
- Enable feedback on your website.
Feedbacks will help you collect useful information which are meant to correct some mistakes you are makingWork on each negative feedback you receive.Reach your seller with any negative feedback that relates to products while you work on negative feedback that relate to sales.Feedbacks on your website serves as mirror through which you can see where you need more improvements.
Do not argue with people when they pass negative feedback on your product or sales. No!
Instead, use constructive means to let other buyers be the judge.
Take refunds seriously.
If an order is defective and requires return and refund, do not hesitate even if this will make you lose some money.
This is one way you build your trust and make more people do business with you.
- Use the best of your products to run your promotion.
As you plan to go into drop- shipping e-Commerce business, believe me, it is a profitable business venture and opportunity if you take it seriously and do it the best way.
I am sure that this article has helped you familiarize more on the drop-shipping business.
This is one thing you may need to do for us if you had benefited from this.
Some other friends of yours may be looking for articles like this.
Please share this as it is with them and help them choose a business of the season that will promote their happiness.
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To your Success! in Drop-Shipping Business.
Mendoh Urch Olivers