Dropshipping is a retail fulfillment method where a store doesn’t keep the products it sells in stock. Instead, when a store sells a product, it purchases the item from a third party and has it shipped directly to the customer. As a result, the merchant never sees or handles the product.
Aside from the absence of a brick and mortar store, the biggest difference between dropshipping and the standard retail model is that the selling merchant doesn’t stock or own inventory. Instead, the merchant purchases inventory as needed from a third party – usually a wholesaler or manufacturer – to fulfill orders.
Through dropshipping, luxury goods distributors have made things easier and more accessible for many people to indulge their obsession with luxury items. Not only do they offer a wide variety of choices, but they also offer free shipping so customers and other buyers can access their products without hassle. As with everything, the internet has made shopping easier and more accessible. In a matter of clicks, your shipment of bags, perfumes, or belts can be on their way to you.
Dropshipping has rapidly become one of the easiest ways to sell products on the internet without the need for capital, there are literally thousands of companies claiming to be dropshippers and it can be a minefield for those looking to get into dropshipping in order to make some money. I have been using dropshipping for a number of years now and thought that I would document a few of my thoughts and questions that come to mind when I consider a new dropshipper arrangement.
Some questions you may wish to ask are:
1. Is the dropshipping product list static?
What I mean by this is ‘are the products available going to change’, this is important because if a dropshipper sticks to a fixed product list then you have no way of moving with the times and you will be plugging away trying to dropship out of ‘life cycle’ products. Ideally the product list should update regularly giving you different products to promote and make money from.
2. What availability guarantees are they claiming and are they proven?
One of the key factors to consider when using a dropshipper is the availability of product, remember you are selling to a customer without having the product at hand so you need to be assured that when you sell that Playstation3 or iPod that the dropshipper will have the product in stock and be able to deliver to your customer. There is nothing worse than selling a product to a customer who thinks you have the product in stock only to find out the dropshipper is out of stock and you have to let them down. I term this Business Critical, as there is no hope of return custom after letting people down. Some of the more advanced dropshippers have online access to their stock lists and you can see what they have in stock and how quickly they go out of stock before you choose to sell a particular product.
3. Previous customer testimonials?
Nothing is better than word of mouth; if a previous customer is willing to praise the dropshipper then they are obviously doing something right.
4. Sales/Copy and images for auctions?
Does the dropshipper provide any sales copy and/or images that you can use on your sales pages? Most of the reputable ones are willing to help you in this area because the more you sell the more they sell. Some dropshippers even provide website templates and complete sites for you to install which can help if you have a limited technical ability.
5. Does the pricing allow you a margin?
When selecting a dropshipper always compare the prices they charge to those that are being commanded in your marketplace, research some offers from your competition and see whether you are comparable or hopefully better. Obviously this is one single product and don’t be afraid to use a dropshipper for one product and use another for another product, dropshipping is that easy you can use 10 dropshippers to sell 10 different products.
6. How long does it take before you ship my order?
What are the lead times for the shipping of your orders, obviously your customers are expecting a speedy service and if the dropshipper in question is going to take 2-3 weeks to ship then you are not going to have many happy customers. You will also need this information so that in your sales copy you can inform the customer the expected delivery times. Most reputable dropshippers ship in 3 days maximum, with some delivering next day.
7. Can I place orders 24/7?
This can be important especially if you are using a dropshipper in a different country, the country you are selling in maybe during the day while the one that the dropshipper is in may be the middle of the night and as such may cause added delays if they do not have a system in place. Top line dropshippers have automated systems but other reputable dropshippers still use manual ordering so this is not a factor to put you off but more a bonus if the system is automated.
8. How will my merchandise be shipped?
The simple question here is will the item be shipped under plain packaging? If it isn’t then the customer can circumvent you on any subsequent orders, which isn’t a business practice that will sustain your own. Again, pretty much all the reputable dropshippers post under plain packaging but there are a few that don’t and obviously these are the ones to avoid. It is also wise to review how the dropshipper delivers, ie. With postal service/3 rd party service they are using and the guarantees/information that they provide such as tracking codes etc. Always go with a dropshipping service that doesn’t advertise themselves when they ship.
9. Do you ship internationally?
Obviously, you want to sell to the biggest market you can and if your dropshipper will not ship
internationally then you will potentially be losing a large chunk of sales. Again this needs to be taken into context with the product you are selling, if it is a country specific product that you are just selling then international shipping is not a factor also if it is a bulky product then the shipping costs would be that large that most international customers would not want to pay the cost and this again negates the need to ship internationally.
10. Are you a middle man or a dropshipper?
When researching a dropshipper you want to make sure that they are actually a true dropshipper and not actually a middle man that is using a dropshipper to dropship for you. This means that you are being overcharged and that with a bit more research you will be able to locate the original dropshipper and make some extra profit per sale.
11. What is the return and refund policy?
What exactly is the policy, most dropshippers accept returns and if they do not then do not use them period. Obviously when selling any product your customer may have a problem with it or feel it is actually unsuitable after all and wish to return it, this is obviously a service you may or may not actually offer to your customer however having a strictly prohibited returns policy will lose you sales so it is something you need to be clear on. What generally happens is you contact the dropshipper and they issue you with a returns authority number (RA) for which you need to use to send the products back, when the product arrives back then they issue a refund which you pass onto the customer. Obviously, this adds time to the return process and in the meantime you may wish to refund the customer as soon as they return the product to you before you send it back to your dropshipper because this will speed the customer refund and increase your customer service.
12. Do you have to reside in the same country to use the dropshipper?
Some dropshippers only allow residents of their own country to use their service and this question needs to be asked so that there is no confusion and problems going forward.
Although not a complete list these are the twelve questions that I refer back to when selecting a new dropshipping partner and they have kept me out of trouble so far. You may wish to add to this list yourself but with a few simple questions and a little bit of research you can turn your dropshipping dreams into reality and start earning some money. Dropshipping is here to stay and there are many people that say it doesn’t work, well I am not one of them and I am successfully using a number of dropshippers to serve my increasing international customer base both in a timely and customer focused manner.
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