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HOW TO DROP SHIP

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RESEARCH

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“Cost and technology are typically no longer barriers to entry when starting an online store if operated wisely.”

Back in the day (10-15 years ago), opening a retail store required lots of capital. You needed funding to:

 

1. Buy inventory in bulk from a supplier

2. Physical warehouse space to store the inventory

3. A brick-and-mortar storefront to sell the merchandise

Then hopefully you had enough cash left over for marketing.

 

While it is cash heavy, buying inventory in bulk,  this strategy can obviously lead to higher margins. However, the risks involved with this traditional model can be extremely high – especially if inventory goes unsold as this can lead to high losses and warehouse or store space issues. Yet, this process has been the bread-and-butter of the retail world for quite some time. 

As we all know, “The world evolves … you either change with the times or become a dinosaur.” 

TODAY,  AN ONLINE STORE CAN BE THE ANSWER.  “Change With The Times”

Nowadays, more and more stores are moving online. Companies like JDM Partners make it accessible to do what was once unheard of:  you can open an online store and start making sales right away.

Cost and technology are typically no longer barriers to entry when starting an online store if operated wisely.  However, e-commerce newcomers do not have the same resources as established big-box retailers (or as experienced competitors) so you must find other ways to compete besides price alone. Instead, your focus should be on marketing your brand, pricing, and quality products. It’s about customer experience and curation.

ENTER DROP SHIPPING, THE PERFECT FULFILLMENT MODEL FOR

E-COMMERCE

Drop shipping virtually eliminates inventory risk, which is quite a feat for most retailers just starting out – or for that matter any retailer!

This is where drop shipping comes in. Instead of holding inventory themselves, these sellers simply route orders directly to the supplier, and their supplier sends the products straight to the customer. 

Drop shipping is also a smart way for retailers to TEST the waters with new products. Instead of buying inventory upfront in bulk, you can list items on your site and see what sells, which is worth it even with you break even or lose a little.  This shifts the competitive advantage from back-office logistics (who can compete with a fulfillment powerhouses like Amazon anyway) to customer experience and marketing – the fun part that most think starting a store is all about.

BUT to think you can just open a drop shipping store and win is not necessarily realistic.  Like anything there are hurdles and road blocks that must be over-come.  Experience and the judgement of management tends to win the day.

DROP SHIPPING IS NOTHING NEW, IS IT?

Make no mistake, drop shipping is not just a fad! It has been around for longer than you think. Items sold through TV and radio ads used an early form of drop shipping, and even a few brick-and-mortar stores used this form of fulfillment, especially for larger items (like furniture or equipment) that cost a lot to transport. However, drop shipping has really come into its own over the past decade, especially with the rapid emergence and growth of e-commerce. The fear of customers entering credit card numbers online has been replaced by the fear of not having an online presence quickly enough.

Backstory: How I started with Drop Shipping from one Third Party Contractor

I first got into eCommerce almost 18 years ago. I was still in high school and I had friends making a few hundred bucks a week selling sneakers on Ebay. That was when I first saw people actually start to make money online.

It was like a phenomenon, we were selling our used Air Jordans for $300 ! It was more than I made in one week working at Footlocker! It wasn’t long before I built my first website using Yahoo Stores and I found a supplier in China and I started making some real money.

In 3 months I saved about $35,000 and lost it all in 2 weeks..

Be very careful when sending thousands of dollars through Western Union to a “supplier” in China.

I had to shut down the business because my supplier decided to stop shipping out the shoes and keep the money for herself.  This was one for the most painful experiences in my life still til this day. As much as I thought my ecommerce experiment was over, little did I know that my journey was just getting started.  I took my experience from creating my sneaker stores and I replicated the process and created other stores drop shipping different items from legitimate suppliers. I’ve sold sneakers, clothing, hair care products, hair (yes, actual real hair from India), costume jewelry, information, workout books and cds, software, electronics and the list goes on.

If there is one thing I’ve learned from my experiences selling online: YOU NEED TO FOLLOW A PLAN or you are dead in the water.

The one thing you’ll learn real fast in this business is that not every business is going to be a home run. But, if you have a game plan and you stick to it, there is no reason why your business should not generate sales every month. Maybe it takes you 2 weeks to figure out the right strategy or maybe it takes you two months, but you must not quit. Look at the data, make tweaks, look at the data some more, tweak again, and repeat this process until the damn thing works!  

When I started drop shipping I was a naive college kid trying to make a million dollars online. Drop shipping has changed my life and has given me opportunities I could have never imagined. Fast forward almost 19 years later I find myself running a business that helps people create ecommerce stores, using the same methods I’ve used throughout my entire career.  You should be interested in starting a drop shipping business.  Just Start. 

 

 

 

 

 

 

 

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