Today’s guest post comes to us from Corry Cummings. Corry is the owner of LearnToImportFromChina.com. His website offers information on how to get true wholesale products from China.
His post is about dropshipping, which is a subject that ties in nicely with my previous posts on selling items on eBay and Amazon to make extra money.
I have never tried dropshipping, so please be sure to share your experiences if it has or hasn’t worked out for you. I can imagine though that the key factor is to ensure that the dropshipper you use is reputable and will not simply take your money and run.
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, dropshipping can be a great way to do just that.
Dropshipping is a method of selling your products online that does not involve any inventory or shipping costs on your end. You pay a company that stocks your products and your customers order the product from you. You then give the money and shipping information to the dropshipping company, who then ships your product to the customer. This allows you to sell a wide array of products without having to worry about storing them or paying for shipping. Also, your customers will not necessarily know that you are not shipping or storing the product. Using dropshipping is a great way to maximize your online business’ profits.
Researching to Maximize Profits with Dropshipping
Before you start selling products, you need to research the market to see what products are selling. Many dropshipping directories will feature data files for their products that show where the highest profit margins are. This is usually done by comparing their prices to MSRP. Also, look at eBay and Amazon to see what are the highest selling items. These websites can also be a good indicator of what you should charge for your products. A lot of shopping sites will have lists of their hottest selling items of the day, week, month, etc. These can be good indicators of what consumers want at the moment. Bear in mind that these are not the most comprehensive lists.
Keep Profit Margins on Your Mind
Profit margins can be all about perception. If your dropshipper charges you $20 for a product and you sell it for $40, you have a 100% profit margin and you have made $20. However, if your dropshipper charges you $500 for a product and you sell it for $550, you have had a profit margin of 10% but you have made $30 more. Keeping track of your profit margins in terms of dollars rather than percentages can be a great way for you to see just how much money you are making dropshipping. Selling highly priced items with dropshipping carries no more risk than selling lower-priced items.
A niche is a segment of the market that is not having its needs sufficiently met by the greater market. A niche, to someone who is looking to maximize products with dropshipping, can mean huge profits and a customer base that is reliant on you alone to meet their needs. A niche can be hard to find – there are so many different online retailers selling so many different types of products. The trick is to find one that is not served by many retailers and to try offering better services than the other retailers. This will take a lot of research and planning on your part but in the end it can mean huge profits for your dropship business.
How about you all? Have you ever had success with selling items online through dropshipping?
Share your experiences by commenting below!
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Related articles about dropshipping at several of my favorite personal finance blogs:
AllBusiness.com – Make Sure Your Dropshipper is Genuine