Drop shipping is the shipping of merchandise from a supplier directly to a retailer’s customer. How does drop shipping benefit your business?
* You can become a retailer without needing to invest large amounts of money.
* You can start a business with very little risk.
* You don’t have to carry inventory or pay for inventory upfront—if the product doesn’t sell, you never have to buy it.
* You don’t have to buy packaging materials and shipping labels, nor will you need a shipping account.
* You don’t have to manage product returns.
* You purchase products at wholesale pricing and set your own retail prices.
If you want to begin selling products using drop shippers a good place to start is Salehoo (Clickbank). They have legitimate prescreened wholesalers for every type of product imaginable. You can begin posting various products on eBay. If you receive an order for one or more of those items, collect the payment through PayPal or any other means and then forward that order to your drop shipper and pay him his price. The difference between the price that you sell the product for and the drop shipper’s price is your profit margin. You must make sure that your drop shipper ships the product in a timely manner or your customer may leave you negative feedback on eBay.
A large part of successfully using a drop shipper involves good management skills.
• Email or phone the drop shipper twice weekly to check up on stock levels. A drop shipper may not necessarily tell you if supplies are getting a bit low.
• If the drop shipper is located internationally, then make sure you specify in your listing description that items will take 1-2 weeks to ship after payment. Honesty is the best policy – don’t try to hide anything from your buyers, this will only increase their mistrust of you if things do go wrong.
• Include your policy on returns in your listing description.
• Consider enhancing personalization by giving your drop shipper hand-written thank-you notes to include in the packages. Not all drop shippers will be agreeable to this, but you can always try.
• Note that eBay has a new policy that requires you to list the location of the goods at the time of listing. If you are using a drop shipper, this means you must list China, Hong Kong, or wherever they are located. Don’t forget to offer a full guarantee and refund/returns policy to allay any fears over quality.
• Very Important! Follow-up every sale with a customer satisfaction survey. It is critical that you keep tabs on how well your drop shipper is performing.
There’s no doubt you’ll be the first to know if the service is extremely bad, but you are less likely to hear if service is mediocre, even though it may still be bad enough to discourage customers from returning. Remember that eBay buyers are now able to give feedback on different aspects of the sale, so it’s now doubly important to ensure every stage of the sales process is excellent.
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