BEST DROPSHIPPING COURSE
Drop shipping is not a new term, it has been around for quite some time. It`s getting more popular each day, however there are still too many people who never heard about this and while they keep struggling on their 9 to 5 jobs for couple of hundreds $ with drop shipping you can make way more without even investing any money into it and by working way less than you would on your real job.
So many asked me the question what is drop shipping? I will explain it now.
Let's start with terminology. We hear many people state they want to dropship and become a dropship business. This is wrong! They really mean that they want to be a retailer that uses drop ship suppliers.
Dropshipping is a service offered by (some, not all) Wholesalers mostly used on AliExpress. When you use a Wholesaler who offers Drop Shipping you don't have to worry about stocking or shipping products. Instead, when you get an order from a customer, you contact your wholesaler and they ship it to your customer for you. This means you, as a retailer, can sell a variety of products without ever having to stock any inventory whatsoever. This makes drop shipping very appealing for new, small, home-based online businesses.
How Drop Shipping Works:
No matter where you plan to sell products online (eBay, Amazon or even open your own online store like Shopify which I recommend) if you are starting a business selling products from home then you probably don't want to carry much, if any, inventory. Most people who are starting their first online business via auctions or online stores don't have a lot of money to buy a bunch of products or the space to warehouse and store the products they want to sell online. This is where working with a real Dropshipper will save you a ton of money.
As stated earlier, a real Dropshipper is simply a Certified Wholesaler who offers dropshipping. Not all wholesalers offer drop shipping. In fact it's quite difficult to find genuine certified Wholesalers who will dropship and work with online sellers.
For online sellers, working with a Dropshipper is pretty easy. You find the Dropshipper you want to work with (the one who has the products you want to sell.) They will then give you access to their product images so that you can post them on your website, auction, blog or however you plan to sell online. When a customer orders the product, you then order the product from the Wholesaler and they ship it to your customer.
At this point you might be asking yourself, how does drop shipping work? Perhaps you’ve heard the term floating around on various ecommerce platforms or maybe this is one of your first times encountering the concept at all. In the simplest terms, after a dropshipper sells a product, he or she buys it from a supplier and has it shipped directly to the customer.
Typically, the process works as follows. An ecommerce merchant posts products on his or her website, from which a customer places an order and pays for the item. Then, the merchant fulfills the order by placing an order for that same product from the supplier who sends it to the customer. When merchants decide to host their ecommerce shops through Shopify, apps like Oberlo make the process simpler and more smooth by acting as the connective tissue between the supplier marketplace and the front end of the ecommerce shop from where the merchant items are displayed for sale and purchased. The app makes it easier to import products directly from suppliers into the store, and helps to manage any changes in inventory or pricing in the supply marketplace so that there aren’t any discrepancies between what is being displayed in a merchant’s ecommerce shop and the actual characteristics of the item in the marketplace. For setting up all of this read my course for Shopify store build and you will know everything about setting up your website or I can make you website for free on Shopify, just sign up here and contact me and I will make you one that you want for free.
In addition to numerous dropshipping advantages, the dropship model is extremely flexible:
- Dropshippers control their own margins. Also, dropshippers aren’t bound to a suggested retail price (MSRP) and can decide their retail prices on their own.
- Dropshippers don’t need to be established business entities before starting their online stores. Though they will need one once they grow.
- Dropshippers have access to millions of products. Instantly.
- Dropshippers can sell anywhere in the world.
- Dropshipping does not require any money to invest in order to make it.
The Benefits of Drop Shipping
The biggest benefit of drop shipping is the very low startup cost and the ability to offer a large selection of products without purchasing inventory upfront and managing that inventory. Drop shipping can also be a great tool to help diversify your inventory and test products since it’s just a matter of adding the new product to your store, and fully optimized seo and facebook , google adwords store can generate million $ income business per year.
The drop shipping business model has a number of advantages, including:
- Lower Capital Requirement: With drop shipping, you don’t need to invest thousands of dollars into inventory. Instead, you only purchase a product when you have an existing order to fill and you keep the difference called profit margin that you specify for what you need to know value of your product. When I say know value of product I mean if you see product on aliexpress for 2$ and you know that you can easily sell it for 10-20$ then you know value of product, if you try to sell it for 30-100$ and nobody wants to buy it then you clearly are not familiar with product value. Best way to test this is to buy some 2$ product and go on street and ask 20-30 people how much do they think it costs, get average value from all of them and sell it close to it. Some products that cost 2$ can easily be sold for up to 50$. For example t-shirts, you can find them on aliexpress for 2$ but in our retail stores you can easily sell them for 40-50$ each because they know product value.
- Wider Product Selection: When you don’t have to pre-purchase all the items you sell, you can offer a significantly larger number of products to your customers.
- Reduced Risk: Without thousands of dollars invested in inventory the risk involved with starting an online store is dramatically reduced. If things don’t work out you aren’t stuck with thousands in inventory you have to sell at a loss.
- Location Independence: Because you don’t have to worry about fulfillment or running a warehouse it’s possible to run a drop shipping business from anywhere with a laptop and an internet connection.
- Highly Scalable: Because you don’t need to manually fulfill each order it’s relatively easy to scale a drop shipping business. The work is almost the same for you whether you sell 5 units or 500 units.
The Disadvantages of Drop Shipping
Drop shipping can be a great startup business model, but it’s not without disadvantages and drawbacks. Some of the most notable disadvantages of this business model include:
- High Competition: One of the biggest challenges with drop shipping is the ubiquity of products available through drop shipping suppliers. The trade-off for easy access to products is that many people will flood the most popular marketplaces with popular items. But if you get in high competition marketplace just contact me and I will show you the best way to steal competitor customers in matter of minutes with my tested method that`s working and you can check it in my facebook course that requires no investment needed to make a sale.
- Low Margins: Margins for drop shipped products tend to be slim. This can make it difficult to compete with manufacturers and retailers with larger margins, usually I sell products that can have profit margin of 15-50$ plus and my store creates products and we dont buy from anyone and when you create your own product after some time in drop shipping business then your profit margins are crazy as you literally have no investment. As you grow bigger in drop shipping world you need to aim in creating your own brand and your product. Profit margins on some of my stores are going up for 80% of product cost price to be created and crafted.
It’s easy to get confused between all the terms when you’re searching for a drop shipping supplier. Many times it seems like they are used interchangeably, but there’s differences between each of them and it’s important to know those differences it is very important for you to pick the right vendor. If you pick wrong vendor that delivers bad products with low quality or dont deliver at all you are in problem. I will show you know how to pick up supplier from aliexpress that will work best for you. Also if you are drop shipping from AliExpress make sure to find supplier that will work for chinese new year. It can have big impact on your drop shipping business and if you are not prepared for that you will go out of business.
What I mean by this? Not all suppliers from aliexpress work for chinese new year and if it takes from your products 30 day to arrive add to that 20 more days of new year since they are not working and you get up to 50 days, your customers will start asking for refund. Honestly I had this problem and I had luck that my orders were around 50 per month and I sorted it easily but if you get more and get stuck with this its a problem. Just contact vendors from aliexpress ask them how are they working for new year or are they if yes consider doing drop shipping with them. Pick vendors only that are on aliexpress for more years, dont pick new ones. Pick only vendors with high order numbers, with lots of feedbacks. There are many products on aliexpress that will look just amazing and price is very good but vendor is not. It has no orders, they are in business for less then a year, no feedbacks you want to avoid this. I know that you will want to add that products to store but dont. Or if you still want to add them then order first for yourself and see how it is. After being for some time partner with a supplier and after many orders that you bring them ask them for lower prices so you can increase your profit margins too.
Who Is Drop Shipping For?
There are a few types of entrepreneurs that the drop shipping model will work well for. Let’s take a look at some of them:
Validating Entrepreneur: Drop shipping can be a great way to test new products or even a new startup before investing heavily into inventory that may not sell, making this the perfect business model for the entrepreneur that requires a high level of business and product validation before investment. If you are starting your business then this is by far best option to go for. It takes no money to make money and with money that you get from this business you can start your real company and business that you always wanted, and if it fails you can always come back to this and make money again. That is why its just perfect
Budget Entrepreneur: Drop shipping is definitely the least expensive method of selling online because you don’t have to purchase any inventory upfront. Because of this, the drop shipping method works well for entrepreneurs that have a limited budget or would prefer to keep startup costs as low as possible.
First Time Entrepreneur: The drop shipping model for selling online also is a good business model for someone just starting out selling online. The fact is, selling online isn’t easy. Driving traffic and converting that traffic for the average marketer can take a long time to figure out and optimize. Because of the low costs associated with starting a dropshipping business, it allows new entrepreneurs to start to learn the ropes of setting up a store, driving traffic and conversion optimization before investing thousands (or more) in inventory that you may get stuck with.
Walmart Entrepreneur – Drop shipping is also for the person that wants to sell a wide variety of products and models. Depending on what the price range is of the products you intend to sell or if you want to sell hundreds or thousands of different products it’s nearly impossible without massive funding to acquire all that inventory. In this case, drop shipping would be the appropriate model because, again, you don’t need to purchase inventory upfront.
Brand-Centric Entrepreneur – Building a long-term sustainable brand is difficult but the rewards can be incredibly worthwhile. However, building a brand while utilizing the drop shipping business model is exponentially more difficult as there are so many elements of the entire customer experience that you won’t be able to control. For example, many times you may find out that after a customer has purchased something from you it’s sold out with your drop shipper. This leaves you in the bad position of trying to coordinate between your customer and your drop shipper and can become a really poor experience for your customer. If you dont want this to happen you will need to have Shopify store that I will make you for free and Oberlo app that will work on this. Another point to keep in mind is because you’re not shipping the product yourself you don’t have any control over the experience of your customer receiving the package. Almost 100% of the of time it’s going to be the product in a big brown box with packing peanuts. You need to ask yourself if that’s the experience you want your customers to have. Finally, because you don’t ship the products yourself you don’t own the relationship with the shipping companies. When something does go wrong and your customer doesn’t receive the package you can’t simple call UPS and get the situation corrected. You need to coordinate this with a busy account rep which could take days to sort out, again, leaving your customer with a bitter taste in their mouth.
Margin Focused Entrepreneur – Probably the biggest problem with the drop shipping business model is the razor thin margins. Generally, for traditional drop shipping products and companies your gross margins (the price you sell it for minus the cost you pay your drop shipper) are around 10-20%. At the end of the day when you pay your credit card transaction fees, shipping cart, email service and other app fees you will be looking at only a few percent. I’ve met my fair share of online entrepreneurs running 1 million dollar revenue per year drop shipping businesses that at the end of the day are making 40-50k profit.
Non-Creative Marketers – Most manufacturers (which can also be drop shippers of their own products) have sales goals in which 30% of the sales need to come from direct-to-consumer sales, usually through their own ecommerce site. This means that if you’re selling their products, you will be competing directly with your own supplier, a supplier that is able to have much higher margins than you on the very same products. Any chance of competing head-to-head against them is pointless. They will almost always win because they can afford to. If you’re going to beat your own supplier you need to be creative and find and exploit channels they aren’t using to acquire customers. If your only ideas are to use Google Adwords and Facebook Ads, you’re likely out of luck.