An ecommerce entrepreneur with passion and great supplier relationships can earn good profits without making large investments or holding lots of product inventory.
The benefit of having Drop shipping means you can sell products without holding actual stock. When your customer places an online order via your website, you pass that order on to the supplier, who then ships the product directly to the customer. You don’t pay the supplier until the customer has already paid for the product, nearly eliminating the need to hold stock or make significant financial investments to start an eCommerce business.
Finding Suppliers Is a Challenge
The challenge with the drop shipping business model is that you must trust the supplier/distributor to ship the order promptly and correctly. What’s more, finding good suppliers/distributors interested in taking on individual orders is difficult but getting easier as they are starting to realise there is a huge amount of business waiting for them if they do.
The following three tips are aimed at helping you find a good supplier that is both willing to drop ship and capable of providing good service to you and your customers.
Tip 1: Be Passionate About Your Products
Since the drop ship model effectively outsources all order fulfillment to a wholesaler, your job is to add value, through marketing and customer service.
Ecommerce marketing often includes Search Engine Optimisation, writing blog posts, engaging your target market on social media, and nurturing relationships with your customers. In practice, these tasks mean that you are going to spend a lot of time thinking about, talking about, and writing about the products you provide.
These tasks are easier if you’re passionate about the products.
Tip 2: Choose Suppliers Carefully
You want to find a supplier/distributor to have a long and mutually beneficial relationship with. They will be serving your customers, and will have a great impact on your business success.
Andrew Youderian, author of the ebook Profitable Ecommerce, recommends having one or more long phone conversations with a representative from any potential supplier. You need to know that you can work with this supplier on an on-going basis.
Tip 3: Choose More Than One Supplier if You Can
You want to have good supplier relationship, it can also be a really helpful to have more than one supplier for each of the products that you sell.
One of the significant drawbacks to the drop-shipping model is that you don’t have direct control over product stocks. Therefore if your supplier is out of stock you will need a a second source.
Also you don’t want all your eggs in one basket in case the supplier increases prices or goes out of business.