Drop shipping is a type of eCommerce that allows people to start a business with minimal investment for maximum profit. It has many advantages; no shelling out of tons of money for inventory, no getting stuck with inventory that no one wants, and plenty of help in the form of free and paid training. But the question is, “Who is drop shipping for and is it a dead business model?” Read on to find out the answers.
Please Note: This is the third in a series of articles on drop shipping. If you haven’t done it yet, click on the links below for the other parts.
Who Is Drop Shipping for?
People Who Are First Timers
If you’ve never done anything like drop shipping before, this is for you. As I said above, it is a low-risk, low-investment business model that allows new online marketers to start a new venture in a matter of hours.
People Wanting to Test a New Product
If you have already set up a store, but you want to see what the market thinks of a new product, drop shipping is perfect. With this model, you don’t need to buy the inventory to test the market.
People Who Don’t Want to Invest a Lot of Capital
With the drop shipping business model, you can add more suppliers easily to extend how many products you want to offer to your customers.
People Who Want to Sell Lots of Things
With drop shipping, you can be the Asda of the internet. You can stock literally, and I do mean literally, 1000s of different products. Now, that’s not actually the best way to start, but you can certainly build up to it.
Of course, drop shipping won’t work for everyone. For some people, it’s just not the right business model.
Who Isn’t Drop Shipping for?
People Wanting to Grow Their Brand
One of the significant drawbacks of drop shipping is that even though you can make great money from drop shipping, the margins are not very high. Also, you have limited control of marketing a brand. If you have a brand and want to build it, directly going to manufacturers is a better choice.
Sellers Who Want Great Margins
As with building a brand, the drop shipping model doesn’t allow sellers to have the best possible margins. Again, you will need to go directly to the manufacturer if you want big margins.
People Who Don’t Want to Compete with Their Supplier
This is not that usual but is still possible. You may find out that your supplier, either the drop shipper or the manufacturer, has its own store. If this is the case, they will be able to undercut you, which means you’ll need to be a lot more creative with your marketing.
Is Drop Shipping a Dead Business Model?
This is an entirely ridiculous rumour spread around by anti-drop shippers and other odd people. There is still a great deal of money to be made out there.
That is not to say that there is no competition. Quite the opposite, there is a great deal of competition. However, all that means is that you need to concentrate on finding a perfect niche. You should also try to work with manufacturers as much as possible and try to avoid drop shipping aggregators.
The other problem is that branding is a challenge. More and more customers are looking for brands, which means you need to have a brand and be able to offer freebies. You either need to find suppliers who are willing to work with you or you’re going to have to work a lot harder to compete.
While I’m here, let’s try and answer a few other questions.
Can You Do Drop Shipping with Amazon, eBay & AliExpress?
Yes, you absolutely can! You can do drop shipping on any of these platforms.
Amazon’s Drop Shipping Policy
“Drop shipping, or allowing a third party to fulfil orders to customers on your behalf, is generally acceptable. If you intend to fulfil orders using a drop shipper, you must always:
Be the seller of record of your products;
Identify yourself as the seller of your products on all packing slips and other information included or provided in connection with them;
Be responsible for accepting and processing customer returns of your products; and
Comply with all other terms of your seller agreement and applicable Amazon policies.
Examples of drop shipping that is not permitted:
Purchasing products from another online retailer and having that retailer ship directly to customers; or
Shipping orders with packing slips, invoices, or other information indicating a seller name or contact information other than your own.
Failure to comply with these requirements may result in the suspension or removal of your selling privileges.”
eBay’s Drop Shipping Policy
“Selling using a product sourcing service is allowed on eBay as long as the seller can guarantee that the item will be delivered to the buyer within 30 days of the end of the listing. Sellers who choose to sell using this method are responsible for the item and their buyer’s satisfaction just like any other eBay seller. If there is a problem, it’s the seller’s responsibility to work it out with the buyer.”
What Are the Pros and Cons of AliExpress
Amazon and eBay are pretty well-known, I think, but AliExpress is still somewhat unknown. Let’s check out the pros and cons.
AliExpress is a place where you can purchase products from overseas, mainly from China. They do have suppliers who are willing to drop ship (and at a great price, too!)
The Advantages of AliExpress
– Huge variety of products
– Inexpensive to source products
– White label packages
The Disadvantages of AliExpress
– Possibly low-quality products
– Long shipping times
– Language barriers
Just a quick remark about shipping times. They can be as long as a month or even more. However, you can get products in less than a week if you look for ePacket shipping.
If you like the sound of drop shipping but need help to get started, SaleHoo has a great set of training courses. Check them out by clicking the image below.
Wrapping It All Up
And there we are. The third in the series on drop shipping. I’ve put the links to the first two parts below again just in case. Here is the link for Part 4 . If you can’t see it, I haven’t finished it yet. Sorry.
If you enjoyed the above, leave a comment. And if you think I’ve left anything out, please feel free to add that below too. Thanks and speak again soon.