Increase Profits Through Drop Shipping

Almost anyone with an Internet connection can get into online retail these days.EBay, Amazon and Yahoo have all created easy and effective ways for individuals to sell products online.

If you are looking for a way to sell more products while maximizing your profits, drop shipping can be a great way to do just that.

Drop shipping is a method of selling your products online that does not involve any inventory or shipping costs on your end.Here’s how it works: you make arrangements with a wholesale supplier to stock and ship your products.When a customer orders the product from you, you send the money and shipping information to the supplier, who then drop ships the product directly to the customer for you.This allows you to sell a wide array of products without having to worry about the space, time and cost to store and ship them.Also, your customers will not necessarily know that you are not shipping or storing the product.Using drop shipping is a great way to maximize your online business’ profits.

Ready to try it? Here are a few tips to keep in mind:

**Start small, with ONE product.Start with a small order - such as 3 large or 5 small items - and see how well they sell.Yes, a smaller order will mean fewer profits, but the last thing you want to do is commit to 100 pieces of any item - only to be stuck with the 98 items you can’t seem to sell.If you start small and sell out quickly that will give you the confirmation and the cash to place a little larger order for the next round, lessening the risk for you.

**Research, research, research.Not every online buyer is equal.The buyer on EBay will have different motives for spending money than the buyer on Amazon, for instance.Take the time to research each market platform you want to list on.Take note of what is selling, who is selling it and how they are using photos and descriptions to promote their product.Note the various price points and what the “magic” price seems to be. Also look for unusual items that are hot and selling; you don’t want to sell a product like gaming systems that everybody’s pushing.

**Be prepared for back orders. If a supplier runs out of stock before the customer places their order that creates a delay in fulfillment and shipping.If the customer has to wait too long they will get frustrated and you will either wind up receiving negative comments (at best) or losing the sale (at worst).Prepare for this in advance by holding a couple of items at home as a back-up.If a backorder occurs, ship an item from your home stash directly to the customer; once the supplier is restocked, have them send the item directly to you to replace the one you shipped.

With a little research and testing, you can quickly find out if drop shipping works as a business strategy for you.