On the Internet, you can find many blogs/posts/articles regarding business where initial investments equal zero. Such catching headlines are inviting new dropshippers into business. So, let’s dig into what dropshipping is and why it is different from other methods of sales business. Is it really such a light business to start?
Two main components of successful dropshipping business
So, dropshipper is an intermediate person between Supplier and Customer. The work of dropshipper consists of finding Suppliers who are willing to supply directly to the Customer without your intermediate storage and maintaining and developing a marketplace where the selling goods will attract a lot of customers.
1) Product sales
If the process of finding Suppliers can propose free options and only requires time, then placing the goods on a good platform with a good traffic of Customers willing to buy something is much more complicated. You may find free marketplaces (your own Facebook or Instagram page if you are a well-known blogger may work).
Still, the profit from them will not be significant; in the end, you will have options to place on eBay, Amazon, Walmart, and similar or create your web resource. The shops from the first option take commission up to 15% and have their rules; the advertising of web resources requires knowledge of Internet marketing and money to start target or context marketing. So, dropshipping is conditionally business for free to start.
2) Risks of working with Suppliers
Going back to suppliers, the choice there are more hidden problems stored here. Supplier is the central part of the success of your business. As you entirely depend on him: on the availability of the goods at this factory, on their quality, ability to work identified terms, quality of packing, delivery time. Dropshipper at the end will communicate with Customers regarding complaints, problems, rejections, and other problems, but these problems typically are not possible to transfer to the supplier. Such risks directly influence traffic on your website and may even lead to problems with police as money for the goods you have received. Only good relations and the contract with the supplier will help maintain some problems. In most cases, the excellent choice of trustable supplier is a challenging task.
How to find trustable Suppliers for dropshipping business
The most important criteria for all Suppliers – delivery time. There are several ways to find them:
1) On platforms as AliExpress or Banggood (China Suppliers). If you choose the supplier from China, there is an option to find a specific one with the storage in the required country, where your primary market will be. Unfortunately, AliExpress does not have Suppliers with storage in European Countries, but Banggood has.
All China suppliers on AliExpress have delivery time from several weeks to month; modern Customers do not appreciate that. Bangood deliveries can be executed within two weeks. All process of finding there is performed manually through available photos of goods; the choice is limited. There is no option of direct communication with Suppliers there.
2) On websites with directories of suppliers from all over the world (for instance, SaleHoo, Sunrise wholesale). The search is also manual through the name of the goods. Such websites provide the analytic option to check the hottest items and the number of competitors among other dropshippers.
Good directory websites already checked Suppliers for reliability. Such a way is not for free; you need to buy access to the website. To use the platforms from the USA, you need to install the program changing your IP address to an American one on your PC.
3) IT tools. As easync tools or others may propose automotive search of best-selling products, creates further on a listing of items. In addition to this, you can install pricing and repricing settings to automate your website entirely. After the defined period, analytics is provided with an amount of ordered and corresponding profit.
Such tools propose up to ten increases in sales with a reduction of your time spent. IT tools are working with Amazon (all countries), Home Depot, Walmart, AliExpress, and many more popular marketplaces with already trusted Suppliers. Such a way is also not for free but has a ten-day trial period to check the number of items to be searched and repriced. As a bonus, you can turn on automatic ordering and responses to the Customers, allowing several dropshipping businesses.
The third way of searching suppliers is the most effective as this process is time-consuming if you do this for free and manually.
After finding a Supplier, you need to agree on all Terms and Conditions, including all your mutual work problem cases. Therefore, it is better to sign a contract. If the supplier is interested in a long-lasting mutual relationship with you, he can provide the same test models. This is the best way to check production time, goods quality, packing quality, and delivery terms. But of course, only minor Suppliers do so, as there are too many dropshippers.
In most cases, if relationships with a supplier do not work or the goods are not fully satisfied customers (and you cannot push the supplier to change something), it is easier to find a new supplier.
Dropshipping business is the best choice to do work remotely without capital investments in the team and storage facilities, but there is not much room for development. In the end, you are the sales and marketing manager for your supplier, and if he decides one day to escape from you and take your customer database, you need to start from scratch again.
It is excellent to find a supplier who can produce great quality goods but does not want and know how to sell them. There is no limitation on the types and amount of goods you will put on your dropshipping platform. Professional businessman suggests starting from this business model and after some experience to start your brand.
Dropshipping business is a very competitive model, so if you make some money here, you will be well prepared for further development in your brand. As there is no limitation in profit for the dropshipping business, this model is still and will be very popular.