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

---

Starting An E-Commerce Business

The development and expansion of the Internet has made business... Read More

Is Your Website Credit Card Friendly?

In my last column I discussed the process of credit... Read More

How To Start An Internet Business ? Site Layout

The fourth step of how to start an Internet business... Read More

How Do You Make Money Online?

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

Electronic Commerce and WTO

The Internet may not be useful for all businesses, nor... Read More

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

The first article of this series discussed page views per... Read More

12 Powerful Ways To Use Autoresponders That Will Take YOU To The Top

If only I had known that autoresponders are a necessity... Read More

Home Sweet Home Page

"Your home page is the world's introduction to you and... Read More

How Merchant Accounts Can Save You Money

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

Online Payments Make It Easy For Your Customers To Buy

In the last column we discussed the process of credit... Read More

Chinas Online Shopping May Be Booming In The Next Few Years

Data from China Internet Network Information Center (CNNIC) shows that... Read More

Coupons & Rebates

Yes, it's true, coupons are not just for newspapers anymore.... Read More

How to Gain Your Visitors Trust

If you are serious about selling on the world wide... Read More

Internet Merchant Accounts For Innocents Abroad

If you want to sell on the internet, your need... Read More

How e-business and e-Marketing are Changing

Internet now days became a real marketplace and many many... Read More

Prompt Delivery Rules ? Internet Product Sales

The Internet is the fastest growing source of mail order... Read More

What Does It Take to Make Money Online?

What a loaded question! Let's narrow that down a bit... Read More

7 Must Have Scripts to Look for When Shopping for E-commerce Hosting

When shopping for e-commerce hosting there are a lot of... Read More

Precautions Necessary for an Online Brokerage Business

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

Is It Still Possible To Make Money On The Internet?

Many people are saying that the internet is dead. So... Read More

Choosing An Internet Merchant Account

Surf to Google and perform a search on "Internet Merchant... Read More

Intranet Project Names - Some Ideas

"What's in a name? That which we call a rose... Read More

Credit Card Merchant Account Basics

Knowing which credit card merchant account to get can be... Read More

How To Find the Best Merchant Account For Your Business

What a great idea! Start accepting credit cards and watch... Read More

Drop-Shipping ? A Great Way of Making Money Online

Using the Internet to sell products and services to ever... Read More

The Internet and Customer Care: Aid or Anarchy?

It was reported in 'Marketing' magazine this month, that Britain... 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

Helping Your Visitors: a State of Mind

What does "helping your visitors" mean exactly?It means writing your... Read More

Shopping Online: What You Should Know

For some people, shopping online is as normal as driving... Read More

Alternative E-Commerce Solutions

Over the past several years, the Internet has emerged as... Read More

The Essential Christmas Web-store Makeover

Ten great tips to turn online holiday shoppers into eager... Read More

Your Affiliate Web Site Is Built ? Now What?

When I first got my web site built, I thought... Read More

Products for a Successful Web Business

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