Why Dropshipping an Ideal Business Model

Why Dropshipping an Ideal Business Model

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And Top Tips for Starting Your Dropshipping Business

No business model is quite perfect. The best model is always going to depend on the goals of the company of course, of your industry and of your resources.

But while this is true, there are certainly some business models out there that come pretty close to being perfect. and probably the best example of this of all is Dropshipping. Why is dropshipping so special? Let’s find out….

The problem with Affiliate Marketing

Affiliate Marketing is the route the most Internet Marketer will take when trying to make money from a blog or a Social Media Channel. The ideal is simple: They promite someone else’s product and then they get a profit.

The problem is that these products are almost always digital products, In order to get the biggest money, that’s what you need to sell.

While this has big advantage for the manufacturer, it has some significan downsides for you. For startes, the appeal of a digital product is much sammler than that of a physical product. Try  and sell a digital product to your Grandma for instance and you won’t likely have much luck. The same goes for trying to sell digital products to your Mum. Probably your Dad. Probably even your friends!

The other big issue with digital products is that you are sending cusomers away from your site. They will be more likely to remember the company that sold them the product versus the blog that sent them there! *And this prevents them from buying multiple items through you.

The problem with selling your own product or reselling

So you could sell your own product, sure. But then you have to manufacture it, spending thousands of dollars and potentially wasting your money if the product isn’t a hit. Many of us don’t have the money or the knowhow to go this route.

So you can resell instead… only this way you still need to take a big risk by spending lots of money on inventory. Then yu have to find a way to store all that product and then you have to deliver it and worry about whether it arrives on time or not. It’s a huge amount of adnim and not much fun…

Enter Dropshipping

But with Dropshipping, what you are doing is selling a product through your own store as though it were your own item and then letting the wholesaler worry about fulfilment and delivery – as though it were an affiliate product.

This has all the benefits of selling an affiliate product because you can sit back and let the orders roll on without having to do anything. But it also has all the benefits of selling a real product as a reseller of manufacturer – you get to keep your customers on your site and improve your band awareness, while also selling real, usefull products.

Best of all, some companies will even offer ‘white label’ dropshipping services. This means you can actually print your logo on the product and claim it as your own!

How to start a Dropshipping Business

This is a nearly flawless system because it means you don’t need to worry about storing the products, about fulfilment or about manufacturing. There is not even an up-front investment! At the same time though, the company you are selling your items through will remain quite and unseen and you will get all teh credit for selling items through your own store.

But that doesn’t mean there is nothing that can go wrong. And it doesn’t mean you should abandon all caution. Here are some tips that will help you ensure your new business venture goes smoothly….

Be Wary of Fake Dropshipping Business

There are some companies out there posing as dropshipping companies that aren’t the real deal. These compainies will often buy the products from wholesalers and then dropship them to you! That means that you are paying an inflated price which will hurt your bottom line as well as your turnover.

One thing to be careful of is companies that also sell to the general public. Another warning sign is that the company is asking for a recurring monthly fee. Real companies don’t do this!

Know What to Expect

That said, you may still have to jump through some hoops when setting up with a legitimate partner. One issue is that they might require proof that you are really a reseller – or othewise they might be worried you are just a commercial customer looking for the best possible deal.

Something else they might require is a minimum preorder. This is to avoid time-wasting compaines that will do a lot of talking but then never pass on any significant business. This isn’t great if you are trying to avoid upfront investment but it may be necessary evil. To aviod having lots of inventory lying around though, ask them if they can use it to set up some credit with their store.

Check the Quality

Never sell products from your site blind! Not only will your customers be unhappy but it can also damage your reputation and prevent them from buying from you again in future. Always ask to see at least one example of the product first that you can check over and speak to a representative about what quality control measures they have in place to avoid problems.

Choose the Right Product

Of course it is also rather important that you buy the right stock! This will vary depending on your industry of course but a good place to start is by looking for something that solves a simple and concise problem that your customers have. This will be easy for you to communicate and explain, which makes it an deal place to start if you are opening up a new store!

 

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