Work from home: e-Business / Netrepreneur

How to be a dropshipping merchant

How to be a dropshipper

How to dropship

What is dropshipping?

Dropshipping is and can be a very simple and effective way to become an entrepreneur and start trading online. There are many indications within the online market place that long time established bricks and mortar merchants are now turning to dropshipping strategies and methodologies to minimize stock levels and reduce overall shipping costs and cut down on delivery times to customers.

Dropshipping is a methodology that allows web site owners to send single/ low quantity unit orders gathered on their web sites to manufacturers and/ or wholesale warehouses. They in turn ship the item(s) directly to the customer(s) of the web site owner; i.e. the website owner does the marketing and collects payment and the dropshipper(s) completes the customer delivery through a fulfilment process.

Some more advantages of dropshipping

• The website owner or marketer can focus on listening to the market and discover the products that the visitor(s) want - and then add them rapidly to their site.
• Dropshippers can buy in huge volumes, so they will also be able to offer the best prices on products and shipping, usually wholesale, which will return a greater profit to the entrepreneur (ie you).
• There’s no capital investment and no risk of suddenly having a pile of outdated items in the inventory.
• Dropshipping allows a greater flexibility in terms of product range – the marketer can promote one item, promote a dozen items or promote a thousand! The choice really is yours.

Hidden dangers of dropshipping

Many wholesale companies will have an interest in creating business partnerships with entrepreneurs/ entrepreneurs/ marketers in a dropshipping arrangement. The new technology means it is now an easy way for them to generate extra revenue with very little outlay, but there are several issues to consider very carefully:

Pricing issues

There are many dropshippers online and many joining every month, so be sensible and web savvy and do not accept that the first dropshipper you come across will give you the best deal - shop around for the most suitable wholesaler.

Dropshipping fees and charges

Some dropshippers insist on a handling fee which is over and above the freight costs. Work out all the costs involved to complete an order so that you can calculate your profit margins accurately. For your interest you may be requested to pay a “participation” fee and any wholesaler doing so should be avoided. Each order should be should concluded separately.

Shipping costs

Is the dropshipper using an unknown delivery agent or a highly recognized quality company like DHL/ UPS? Do they ship international? Check their shipping methods to ensure your clients will get their products delivered.

At this stage you will only be using a basic website and learning how to sell small numbers of products. Also bear in mind that you may need a specific type of shopping cart in order to handle drop shipping. Many shopping carts only allow for one “ship from” zip code in the configuration for freight calculations. If you are dealing with a number of dropshippers you may have dozens of point-of-origin zip codes - and this can be a real headache if freight is based on distance.

Accounts - terms

Will the dropshipping company automatically debit your credit card on each order you submit, or can you get monthly payment terms? When you are starting out with a company, they are unlikely to offer credit, but it’s good to check if this will be possible once you’ve established credibility.

Support, returns & refunds

The last thing you’ll want is to be caught up in a nasty situation where you have a number of returns - and have to pay the dropshipper for all the products. Check with the dropshipping company about their returns policy, what kind of support they offer you for their products and about any guarantees associated with their products - and get it in writing. (Keep copies in a safe place)

Chargebacks can also be a problem; particularly when dealing with high cost, low margin goods as you’ll have little or no comeback with your supplier in many instances.

Chargebacks

A chargeback is where a consumer has filed a complaint with their bank regarding a transaction for any number of reasons such as a claim the goods were not received, unauthorized transactions or any of a number of grievances. It’s important to understand that the chargeback process is heavily weighted in the favor of the consumer. A chargeback is a great consumer protection mechanism, however there are unscrupulous individuals out there who abuse it. (don’t be greedy, so you won’t get caught out and if suspicious do not accept the order.)

If a chargeback is instigated by a customer it can be a long and frustrating process to challenge it. If your challenge should be rejected, you’ll be stuck with the full amount of the sale being debited from your merchant account plus chargeback fees that are usually around the $30.00. Additionally, if your level of chargebacks is too high (1% of transactions or 1% of total transaction value), you may also receive a penalty in the form of higher transaction fees and in the long run it may also put your merchant account at risk. Always remember prevention is always cheaper than the cure. The most common reason for chargebacks is a claim of an unauthorized transaction therefore effective fraud screening is essential.

Dropship credibility

How long have the dropshippers been around for? Remember dropshipping is relatively new but they could also be a long established brick and mortar business. Do they respond to your requests for information quickly and professionally? (Check out the customer service). Young dropshipping companies and wholesalers can grow very quickly and as a consequence basic good customer service will sometimes fall below expected standards.

How do I get into dropshipping?

It’s fairly simple process:

• Set up a web site that includes a dropship friendly shopping cart and credit card processing facilities.
• Find wholesale suppliers of products you wish to sell that incorporate dropshipping as a business method.
• Open an account with the company. (Usually online).
• Request content and images relating to the products you’ve chosen, incorporate them on your site/ and/or shopping cart. Remember images and details give a more professional look to your business, you have done the hard work to get clients to your website so ensure they stay and buy!
• Collect the order(s) and payment(s) from your site.
• Provide the supplier with the customer details.
• The supplier then bills you at the special price you have agreed upon, sends (Fulfillment) the order to your customer - in most cases with labels referring to your business/web site instead of the dropshippers. (This is also known as blind the dropshipping process)

How do I find dropshipping friendly suppliers?

There are many different ways of finding dropshipping suppliers.

Direct contact

You can contact wholesale suppliers direct and inquire about a dropshipping partnership.

Search engines

Use the net and any of the major search engines and search as follows: There can be many combinations so be patient.

“dropshipping” + type of product
or
drop shipping + type of product
or
“dropship” + type of product
or
“drop shipper” + type of product

To get the most relevant results always “encapsulate” in quotes as shown as this will significantly reduce the number of returned searches and increase top quality information.

Dropshipping Directories

There are literally thousands of professional, not so professional and just plain awful dropping directories or companies who claim to provide dropshipping information. So be careful, these companies can provide very good data or very bad data and you will spend days/ weeks or months shifting through all the information wondering how accurate it all is.

So get started now with a great list of established dropshippers with thousands and thousands of products.

Dropshipping lists

Check out my information and save yourself hundreds if not thousands of $Dollars searching for top quality dropshipping suppliers. Remember the sooner you find great products that you want to sell the sooner you will get customers buying them.