Thanks to the internets ubiquity online virtual companies have become very popular business opportunities. The online stores are gradually playing a more important role in our lives than traditional clothing stores. In recent years a new concept called Drop Shipping has emerged with the internets appearance. Drop Shippers are basically wholesalers who are willing to ship their products directly to your customers. This article aims to give readers an introduction to the current state of the ecommerce industry Drop Shipping and its benefits and the promise it applies to online retailing.
The Drop Ship model offers many unique advantages over the wholesale model.
You do not have to spend a fortune on the huge inventory of wholesale stores before starting a retail store. This means a very low starting cost for companies. There is no risk of buying large quantities of stock and that you can not sell your goods because they have become outdated by consumers. Therefore it will be possible to test which products have strong demand via the internet with the different products offered by Drop Shipper without losing a fortune on each test.
Another important advantage of a Drop Ship company is that you do not have to worry about sending your products to your customers. You do not need to store space for your goods nor do you affect storage costs. Your Drop Shipper takes care of all logistics and shipping by your Drop Ship company. In fact most Drop Shippers are willing to label their products with your company name on it so it appears that you are the one who sent the products to your customers. Shipping costs for each product are also reduced as your Drop Shipper can ship your products directly to your customers. A higher profit margin is achieved due to the reduction of unnecessary shipping costs.
Drop Shipping is also unique because it lets you sell high then buy low instead of buying low and then selling high. Your risk involved in your retailing is dramatically reduced because you get paid in front of your products giving a profit on each sale.
There is no minimum quantity for your orders. From your web directory you can sell as much of your products as you like and you can leave the layer of stock for your Drop Shipper. The amount of products you can sell through your website is limited to your market needs and marketing efforts.
The process of creating a Drop Ship company can be distilled to a few simple steps. First do some research on the internet over the niche market that you want to target. Once a strong demand for your products has been established contact Drop Shipper of your choice and set up your company as a reseller of the products you want to sell. Then you design a website that is complete with product catalog and credit card accepting features. Product descriptions and images can be obtained from Drop Shipper in most cases. Then you have to drive large volumes of traffic to your website through internet marketing. Some visitors to your site will be converted to customers if they think your offers are attractive enough. They place orders on your website and they will pay you retail prices forward. You send orders to your Drop Shipper which sends the products directly to your customers. Of course the retail price must be labeled as including shipping costs. Because Drop Shipper charges the wholesale price of its products the profit margin you earn is simply the difference between retail and wholesale.
With the low startup costs of a virtual company you can continue to try different types of business or different marketing methods over the Internet without losing a fortune on your efforts. You can lose a lot of many failed efforts but get a great deal on the few business models that you get right.