Drop Shipping is rapidly becoming a business model of choice for online entrepreneurs who do not have the resources nor want the challenges of owning and operating their own order fulfillment operations. The other aspect for these E-commerce drop shipping companies is that Domestic Drop Shipping and International Drop Shipping can improve cash flow and allow them as business owners to focus on their key relationships such as the private label manufacturer of their product and a capable fulfillment partner.
In a nutshell, Drop Shipping is the infrastructure behind your online website. You are able to sell products to consumers online, collect the funds in advance of the order going out and not have to maintain inventory at a facility you own. There are several components to this equation, and they revolve around relationships with your private label manufacturer and your drop shipping and fulfillment company.
One trend that is becoming more common is ‘drop shipping’ from the manufacturer directly. Whether your private label manufacturer is located within the United States or offshore, the opportunity to ship ‘from the factory’ direct to the consumer is a rapidly evolving one. The main reason for this is that it takes the logistics of transporting your product from Point A to Point B out of the equation and that helps lower the overall cost of the transaction and can create additional profit margin for the E-commerce marketer. In a straight transaction where there is no possibility for returns of the item, this is a great model, but customer satisfaction and rankings and ratings are what drive eyeballs to your website and the returns process must be seamless. This is where a relationship with a fulfillment partner is invaluable provided they understand your returns policy and can adhere to it.
For a small startup online retailer, drop shipping your orders can provide you the freedom to work from home and focus on researching ‘the big thing’ or gadget, or needed item. Starting out in this arena can be usually be ‘bootstrapped’ as the basic set up includes the internet domain name, a hosting package, shopping cart or e-commerce software.
What is key though, is that once you decide on a product or products to sell, whether it be, by dealing with a factory direct that can provide direct to consumer delivery on your behalf or working with a fulfillment company, the main thing to remember is that your company name is associated with the quality of the goods and the delivery/returns experience the end consumer experiences. This is where you should pay very close attention to detail, because your choices in this area are going to influence the development and success of your business.
Remember your website can always be updated and you can change web hosting companies, those are intangibles that your end consumer may not notice or care about. Choosing a drop shipping partner and working out all of the mechanics and trust ahead of time though, that is an extremely important decision and not one that you should make just based on costs. I always suggest a site visit or two and actually spending time with the vendor to get to know their philosophies with respect to not only their clients, but do they understand that the end goal is a satisfied consumer who could become an advocate of your product?
Finding a drop shipping company can seem daunting task, there are many drop shipping directories, many though are not free of charge and you may be charged a monthly fee for membership to get a list of drop shipping companies by industry. However, if you are committed to make your business successful, it may well be worth the investment so you can access these companies and learn the ins and outs of successful models they have achieved. After all, at this stage, knowledge is very valuable and if a certain company has discovered methods that can help you grow your business, this is a valuable foundation for a great partnership.
As you go forward once your drop shipping partnership is in place, driving traffic to your website is where the real action begins. This is where spending some precious capital on working with a firm can provide real value. Remember, it is not just your website, but the whole ecosystem that must be attended to. That means, attention to social media campaigns, not just Facebook, but ALL social media outlets that can give you exposure. Quora, Instagram, Twitter, Google Plus to name a few others. Branding and product identity combined with search engine optimization are all part of this ‘ecosystem’ that requires you to take the long term approach to grow your solid online business.