What is Drop Shipping and How to Start a Drop Ship Business?

You have probably seen those adverts online saying you can start a business without any business knowledge, without stock, without selling anything and get rich doing it. Well… of course you are not a fool and you know there aren’t any magical systems online that make you rich without you actually doing anything or taking any risks. However, there are business opportunities for those willing to learn and have a go. This article covers one such business… drop shipping and if you don’t know what it is or how it works this article is for you. You can make a great extra income and some have even become wealthy setting up drop shipping businesses.

What is drop shipping?

Basically, drop shipping is the following:

• You advertise a product on eBay, Amazon or your own website.
• Someone buys the products for X amount.
• You order the item from the drop shipper for 30% less than X amount.
• The drop shipper sends the item to the customer.
• You pocket the difference (usually between 25% and 40% profit on average).

This is known as a supply chain system and the benefit to you is that you never have to hold stock or deal with customer returns etc. Your only outlay is advertising and obviously you can spend as much or as little as you want on advertising. The more advertising you do the more you will make. Most drop shippers will allow between 30% to 40% discount on their products and you should always aim for at least 25% profit for YOU! Any less and it’s not really worth you advertising these goods unless they are high end like HD-TV’s and expensive electronics.

You can set up a drop ship business using eBay or Amazon as a place to advertise and make a good income. However, eBay is only really any good if you are selling items cheap as that’s what people expect from eBay. Since 2008 eBay has turned into a gigantic online boot fair. People expect the goods to be cheap! You really need to sell your goods for a good price, as the price you pay the wholesaler isn’t negotiable. Amazon is a better place because people expect the price to be normal price or just slightly under rather than cheap as chips eBay.

You will make the most money from drop shipping by having your own website. I know what you’re thinking… how do I do that? Well… it is a lot easier these days as you can get a free website from Wordpress, Moonfruit and Google. They all use templates so with a limited knowledge of computers you can set up a website with ease. By far the best is Auctiva because they will do a lot of the background work to promote your website and get it ranked on Google which is by far the biggest search engine with 82% of the world market. Auctiva costs about $10’s per month for an ecommerce shop online. With the others mentioned you just get a website and you have to promote it yourself although Wordpress websites do tend to rank well on Google.

A drop ship business is a great way to start a business online and generate some excellent profits or extra income and its fun. I still have a drop shipping business which my wife runs and I love getting up in the morning and seeing sales there from the previous evening sometimes from when we were asleep. Making money while we are out with our kids is also a great feeling. Do a bit more research and have a go… as you never need to buy stock there is very little risk. Good luck!

Free Websites Links: Wordpress, Google, Moonfruit, Auctiva Commerce