DropShipMaven

Quite obviously,  I will be talking a lot about drop shipping on this blog. I realized last night though that perhaps not everyone knows exactly what drop shipping is. Most people in the lifestyle design arena are familiar with the concept of selling e-books, using affiliate links/AdSense on blogs and other ways of generating passive income. But drop shipping is different – it’s sort of a hybrid between traditional e-commerce (selling products on the web) and affiliate marketing, with a little bit of information thrown in for good measure (and SEO!).

Here’s how it works.

1. You pick a product or genre of products that you want to market and sell. This step can take many forms – for example, you could select your product first, and then seek out drop shippers; OR, you could sign up for a service like Doba to browse their offering and research what products might be most profitable. You might enter the supply chain at any point – drop shipping from the manufacturer, a reseller or an aggregator like Doba. Drop shippers can be based anywhere in the world, so it’s important to be sure that your selected drop shipper will send to the countries in which you want to do business.
2. Once you’ve selected your product and found a reputable drop shipper, you determine your prices (based on cost + drop ship fees + shipping + PayPal/eBay fees + YOUR PROFIT) and market the products. You can do this in your own e-commerce store, on eBay, through AdWords, etc. Figuring out how to market the products is the fun part!
3. At this point, you’ll hopefully start receiving orders. Depending on your drop shipper, you’ll either go onto their website and place the order using a special drop shipper login or discount code, or you might email/fax the orders (sometimes the case with smaller operations). You enter your credit card/payment info, but you ship to the customer who placed the order on your site.
4. The drop shipper then sends the product to the customer on your behalf. In some cases, the drop shipper will even include your logo and contact information on the packaging. In most other cases, it it simply sent in a plain package. You should work with your drop shipper to ensure that no wholesale pricing information is disclosed to the customer.
5. The customer can then return or exchange their goods subject to your (and your drop shipper’s) return policy. Some drop shippers accept returns and exchanges with no problems, some charge a fee, and some don’t do it at all. You’ll need to figure out how to cover your costs in case you have returns (and whether or not you’ll even accept them).
6. Your profit is what’s left after all the costs are paid (dropshipping, eBay/PayPal, shipping, etc.).

That’s pretty much it! Of course, I’ll be going over these steps in more detail in the coming months, but I wanted to give an overview of this process so you can start researching potential product niches.

Photo by shala

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