Drop shipping is a sales technique in which the retailer transfers customer orders and shipment to another company (usually the product supplier) who then ships the product directly to the customer. The retailer makes their profit from the difference between the price paid to the supplier and the retail price.
With the growth of the internet, many individuals and businesses are taking advantage of online drop shipping services as a way of generating an income. You don't have to have your own business or any particular technical mastery. Anybody with a basic level of internet competence can start their own drop shipping venture today.
Obviously, there are those who invest significant time and effort into making money this way, but it needn't take too much time and effort to start generating a small profit. By following our guide to drop shipping websites we can help advise and get you started in your new venture.
The following guide introduces you to the basics of drop shipping websites. For specific guidance on a particular site you can read the appropriate website review. By taking a little time to learn the ropes you can potentially save yourself a lot of time and trouble, as we set you on course for the drop ship site that is best suited to your needs. So, read on, and the best of luck!
What's involved in running my own drop shipping business?
The great news is that the setup costs can be minimal. Whilst it's true that you only get out of something what you put in, it doesn't take too much effort to begin making a small profit. As mentioned above, drop shipping can be relatively simple. Essentially, you take care of sales whilst the drop shipper does the rest. For example, you might choose to become a member of a drop shipping site just to promote and sell their products on eBay, Amazon or some other marketplace site. So, you advertise the products you wish to sell and wait. When a customer purchases a product from you, you then login to the drop ship site and order that product, which is then dispatched directly to your customer. If you're willing to invest more time, money and effort, you might consider setting up your own website, either yourself, or by taking out a special membership in which the drop shipper builds a site for you.
Why use a drop ship website?
By joining a drop ship website you get immediate access to a wide range of products that you can promote and start selling immediately. Products are sold at less than their retail price, which enables you to sell for slightly more, which is where your profit comes from. If you don't have access to wholesale stock then a drop ship site is ideal. Furthermore, you don't have to pay for any stock upfront, nor do you have to store stock as the drop shipper does this for you.
What do I need to in order to join?
Most drop ship websites require nothing more than a few personal details including a valid email address and payment method (credit and debit cards are the usual payment method). You can be up and running within a few minutes.
What about drop ship website membership fees?
Sites vary considerably in this regard. For a basic level of membership there's usually a subscription fee payable each year or a one-off charge, though the odd site does offer free membership (e.g. PIXmania-PRO.co.uk). For more advanced membership in which you're provided with your own website, expect to pay a yearly fee plus a monthly site hosting fee (e.g. dropshipland.com). You can also upgrade your membership to include technical and marketing assistance (e.g. theselect.co.uk) although such memberships are only for serious online sellers. Details of all membership fees can be found in our reviews.
What kind of products can I sell?
Obviously, when selling using a drop ship site you're limited to what that site offers. Many sites deal largely in electrical products and accessories such as mobile phones, computers, DVDs, etc. (e.g. PIXmania-PRO.co.uk). However, you'll also find drop shippers that specialise in children's clothing and accessories (dropshipkids.co.uk), gift ware (Puckator.co.uk) and more. The type of product you promote is up to you. It's possible to sell a specific product line or a range of different products. You can also sell as many or as few products as you wish.
What about pricing?
Most sites make you sign up before you get to see their product prices. Whilst the drop ship price (the price you pay) is set, you're free to choose your own retail price. Obviously, the greater the difference between these prices, the greater the profit, just be careful not to price yourself out of the market! Drop ship sites do not stipulate the price at which you should advertise their products. Some sites do offer a guide retail price, which is useful as it helps you avoid setting too high or low a price. Remember to consider the cost of shipping when you set your retail price, though some sites incorporate this into the drop ship price and do not charge separately for shipping.
Where do I get product information?
Once you've signed up to a drop shipping website you'll be granted access to the full range of products, which can usually be viewed on their website. If you're not selling many items you can copy and paste product images and details manually. Product information is usually also available as a CSV (comma separated values) file that can be opened using Microsoft Excel or similar software package with all product information condensed. If you have a website it may be possible to configure a live product feed, which will also update stock levels. If you take out a membership that comes with your own website, it's usually preloaded with all the product information.
What about stock levels?
The CSV file (or equivalent) you receive when you join is updated on a regular basis so you know exactly how much stock is available for every product. If you have a direct feed to your website, stock levels are available in real time so when stock levels on a particular product are low, you are warned and when levels are very low that item will disappear from the product list (e.g. Puckator.co.uk).
How much money could I make?
This will depend on the amount of time and effort you put in. It's possible to recoup your membership fee by the end of the first day if you start straight away. Some online sellers reputedly make thousands per month, though it may well take some considerable time and effort to achieve this. But who knows? Many sites offer help and assistance with marketing strategies, as well as generating extra web traffic to increase sales.
How much control do I get if I have a website created for me?
If you take out a membership that includes your own website, you will usually be able to select your own domain name (which is then yours to keep) and be able to customise and alter the look of your site, add banners, sell as many or as few products as you wish and even add your own products to sell. Some websites include eBay integration; this means that your eBay sales are registered on your site, your eBay customers can see all the other products you have for sale and even send links to your website in your eBay messages.
Where can I get further help?
Pretty much all sites feature detailed guides on drop shipping, especially for beginners. You can also contact companies by telephone, email and post, whilst some even have live support. Their customer and technical advisors should be experienced enough to resolve any problem or query.