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    1. Mariasuper is offline

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      #1

      How profitable is dropshipping? - Making money having a Dropship Store Online

      I have been thinking of running a dropship store online. As near as I can tell, itís a profitable medium, but Iíd like to get the opinion from those of you with more experience dropshipping. Is it profitable? What do I need to know before I get started? Whatís the best way to run this kind of business?
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    2. SusieB's Avatar
      SusieB is offline

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      #2
      Well, youíre on the right track so far asking questions and researching, because dropshipping can be a viable business practice Ė done the right way. It is also highly dependent on the products you choose to offer, and, of course, if you can find verified dropshippers.

      Most people are attracted to dropshipping because it doesnít require a significant initial investment, you avoid warehouse costs for storage, and you donít have to deal with shipping Ė it can be a good way to make money. At the same time, however, it requires just as much diligence in checking out various aspects of the business as any other kind.

      Youíll hear this term over and over again: niche. You have to find one. Without a niche, youíll be up against the millions of other resellers who are vying for a corner on the market. The niche is where you have to place the majority of your efforts to create a continuous cash flow that can support the business.

      Letís say you have a specific type of product that is limited to a sport, like soccer. You could attempt to focus your niche here; this is what we would call a vertical market because there are only a certain number of people around the world that will give your product some attention Ė and dollars. Iím not saying this type of market wouldnít support you, as it very well might. But the market is limited.

      Itís better to focus on an industry that is horizontal, which appeals to a broader market share. Something like sporting goods appeals worldwide to lots of people and is broader than just one sport. Does that make sense? This market will be harder to break open because of the intense competition and the larger companies already owning a significant portion of the market share.

      It may take some time for you to break into a horizontal market, so starting with a vertical one might make sense. No matter what your plan is, however, you have to find a reputable dropshipper that sells a quality product. That just might be the hardest part of the process Ė after finding a niche.

      The main key to finding a dropshipper and succeeding is locating a first tier dropshipper. This is a top of the supply chain distributor where youíll get the best deal on product. You certainly want to beware of dropshippers who are really middlemen: they are sourcing from tier ones and you wonít get the best deal here. Sometimes, these kinds of dropshippers will typically charge you to belong to their membership. This is how they make some of their money, and it is usually a sign that itís a scam and not a true dropshipper.

      You should watch for a couple of things when checking out companies:

      Steer clear of companies that charge a fee or membership, as a true dropshipper wonít charge you.

      Be wary of dropshippers that donít let you see prices before buying/joining.

      How much does the item cost? Will you end up having to charge a higher price than if your customer bought the product at a retail store? Price is a big factor here.

      How many items do you have to buy at once?

      Do they list products in stock? If not, what happens when your customer orders? Will it be available?

      When they ship the product, does it have their logo and contact details on it, or yours?

      Obviously, if a customer sees another companyís brand name, it causes confusion and youíre potentially drawing customers away from your business.
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      shellycs80 (02 Dec 2012)

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      tim007 is offline

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      #3
      Another thing that’s critical to finding a dropshipping company you can work with is their shipping time. If the company you select takes a long time to turn the order around and ship it out, your customers won’t be satisfied.

      You should also investigate the company’s reputation for shipping times and on-time delivery to avoid falling prey to deceptive claims. That’s part of doing the background work.

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      shellycs80 (02 Dec 2012)

    6. Sam1978 is offline

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      #4

      Quote:

      Originally Posted by SusieB View Post
      You’ll hear this term over and over again: niche. You have to find one. Without a niche, you’ll be up against the millions of other resellers who are vying for a corner on the market. The niche is where you have to place the majority of your efforts to create a continuous cash flow that can support the business.

      It may take some time for you to break into a horizontal market, so starting with a vertical one might make sense. No matter what your plan is, however, you have to find a reputable dropshipper that sells a quality product. That just might be the hardest part of the process – after finding a niche.
      It’s a good point about the kind of product that helps or hinders a business founded on dropshipping.

      DVDs bring in a decent profit, if the dropshipper is reliable and you know what movies are popular. Another is books. The variety is huge, because you can focus on informational, literature, textbooks, how-to’s, nonfiction, etc. And let’s not forget electronic goods, which are in high demand. People rely on their electronics in almost every aspect of life, but again, what’s your niche, because electronics can sometimes be a pretty saturated market. You absolutely can’t skimp on quality here, so a reputable dropshipper with quality product is vital.

      Again, though, you have to think niche. You can find cheap DVDs and books at the local grocery store or Wal-Mart, so you have to be able to provide a niche service within a market to make it at all.

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      shellycs80 (02 Dec 2012)

    8. Brightship is offline

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      #5
      No one has pointed out yet that you want to avoid dropshippers that easily turn up on a web search. Why? Well, I’m just leery of someone who makes a big marketing effort and then doesn’t back it up. This is like Lexus making a big in-your-face push. While they do advertise, their quality brings people to them. This is the same with dropshipping. If the company has quality product and a good reputation, they’ll soon have a solid customer base.

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      shellycs80 (02 Dec 2012)

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      #6
      Another key point to look at when hunting for a reputable dropshipper is what they want from you. Most will make a request to have your reseller tax ID number in order to grant you access to their wholesale price list. This is a perfectly acceptable request.

      On your end, developing a written agreement with the dropshipper is also crucial. Without a legal agreement, what’s to prevent them from directly soliciting your customers and eventually bypassing you altogether? Don’t be afraid to ask for this, because you are doing something for the dropshipper too: you are building business for them through your customer base. But you have to protect that base.

      The upside of this kind of business is really a plus. Think about it. If you took out traditional print ads or something like that and the product doesn’t sell, you’re out of luck and money. With dropshipping, if the product doesn’t sell, you can pull that web page pretty easily at no cost or just leave it up and see what happens. Either way, you’ve invested very little comparatively.

      Back to products to sell, I was thinking that I would definitely expand that list to include almost any kind of product (as long as you build a niche and provide good quality goods). I’ve seen successful dropshipping businesses that focus on clothing, sporting goods, office supplies, the list goes on.

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      shellycs80 (02 Dec 2012)

    12. Mariasuper is offline

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      #7
      Thanks everyone. Lots to think about and great pointers. Hopefully, I’ll avoid scams and be able to pinpoint a reputable dropshipper.

    13. velvetfabric is offline

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      #8
      oh, it's pity i can no offer any help for this

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