Some Pointers on Making an Online Retailing Business Work

It has become quite easy for anyone to sell products online today thanks to drop shipping and the services provided by online business platforms such as ebay, Amazon and Yahoo. The idea is quite simple. In online retail, you do not keep products in stock but source and supply directly to your customers. Quite like other forms of retail, the difference between wholesale and retail prices constitutes your profit.

Online retail can be a great business idea as many small start ups have discovered. While selling products this way, you do not have to keep a stock of inventories or ship the orders yourself. An online retailer would stock your products and process customer orders for you. Once you get a customer order, you pass on the product and shipping information to the drop shipping company, who then ships the orders to your customers within a stipulated time. You do not have to worry about storing the products or shipping them.
 
As for your customers, they would take you to be the actual supplier and would not care less about how you are processing their orders, as long as they get what they had asked for at the prices mentioned.
 
What can you do to maximize profits in this business model and make it work for you?
 
Be in the know of things
 
The key to maximizing your profits in online trading is information. You have to research to identify “in demand” products, which you can then source and sell. You would also need to identify suppliers and dropshippers for the product categories you might be interested in.
 
The easiest way to do so would be to access online directory sites such as esources.co.uk, the fastest growing wholesale trade directory in the UK. This directory service offers the resources and tools to source wholesale products and merchandise in the safest way possible and faster than ever before.
 
From researching the selling potential of any product and accessing trade related articles to learning about trade fairs, exhibitions or the latest clearing auctions, esources really helps you get started. 
 
You can also check out ebay or Amazon to identify the best selling products and the prices at which they are selling. This way, you can form an idea on the prices to charge for your products. The hottest selling items in shopping sites would also give you an indication about customer preferences in different product categories.
 
Do not tarnish your brand value
 
While selling in marketing sites such as ebay, you need to keep a strict check on your order fulfilment duration and review customer feedback periodically. This would ensure that there is no negative publicity and your brand image is not tarnished in any way. If you list, using an auction format as in ebay, you cannot hope to survive let alone prosper, unless you deliver what customers have signed up for. If orders are taking long to process or if the shipments are delayed, you might end up permanently damaging your prospects for success.
 
Keep profit on your mind
 
Know your “actual” profit margins to have a better understanding of the amount of money you are making in real terms. You could sell highly priced products through your drop ship carriers to increase your profit margins, without enhancing the associated risks.
 
Referring to profit margins in percentages can sometimes be misleading; if your drop shipper charges you 20 pound for a product and you sell it at 40 pound, you make a 100 percent profit. What you get in hand is 20 pounds. Compare this with the situation where your drop shipper charges you 500 pound for a product and you sell the same for 550 pound. Your profit margin is only 10 percent here but in real terms, you have just made 30 pounds more. 
 
Keep these pointers in mind to make drop shipping and online retail work for you. You could also try to find out about niche products and offer better services to stay ahead of competitors and accrue profits.