How To Use Drop Shipping To Start An Online Business

Sellers on auction sites often use drop shipping as an effective business tool; they take orders, pay a wholesaler (who dropships) to send the products directly to the buyers and accrue the difference between the wholesale and retail price. It can be a viable business option, more so for entrepreneurs who do not want to invest on a ton of inventory but still want to set up shop. Many people have been inspired by this fast growing mode of retailing by dropshipping products to customers.
 
What makes drop-shipping unique? In wholesale drop-shipping, the dropshippers handle and manage stocks for retailers, which save the retailers a lot of time. They also do not have to maintain stocks on site. With the dropshipper taking care of inventory, the risk of sustaining stocks over a period of time, are not there. Moreover, if there is no minimum order requirement, the new or first time retailers can also use this method to create their own niche markets.
 
What does it involve? As a first step, the retailer, wanting to drop ship products, would need to find a drop shipper who has the products he plans on selling.
 
He can do so by using an online wholesale directory of distributors and suppliers. Reputed wholesale directory sites such as esources.co.uk are preferred by most serious retailers in the industry. It is, in fact, the largest wholesale directory of legitimate distributors and suppliers in the UK. The suppliers featured in this site are legitimate and verified; this makes the process of sourcing merchandise from suppliers transparent, easy and hassle free.
 
A reputed B2B trade portal such as esources offers different registration options to retailers, wholesalers, importers, distributors and manufacturers in the UK as well as abroad to use the information on drop shipping to fulfil orders and set up / expand their businesses.
 
Once you locate a reliable supplier who would drop ship for you, half your work is done. You would then need to see the mark up cost being offered by the supplier you are liaising with. You would also need to ensure that there is a ready stock with the supplier so that you do not end up back ordering the product.
 
To generate customer interest, you could advertise your products for sale on sites such as ebay or your own website. You start generating income with every sale you make as the customer pays you upfront with an online instant payment option. Such options enable customers to pay you faster. This means that you can place your order with the drop-shipper instantly and the entire supply chain would then move without a hitch.
 
To make your business grow and remain viable, you would need to follow up your sale. One of the best practices would be to stay connected with customers and identify the problem areas in the products or the delivery methods. A proactive approach in customer relations can make you stand out from the unscrupulous drop-shippers who take money without filling orders.
 
On the delivery side, a retailer would need to become member of an online auction website. Thereafter, he can access the product information from the drop-shippers he selects to deal with and post the same on the auction site. The retailer can make some permissible changes in the product descriptions to make them more appealing to the final customers and help them stand out.
 
At the end of the auction, the retailer pays the wholesaler on the items sold to the customers. If the entire process goes smoothly, the retailer makes a decent profit.