So What exactly is Dropshipping?

Hopefully these Q+A's below will give you the basics

What's Dropshipping?

Dropshipping allows you to sell products on behalf of a supplier. The supplier actually holds the products and sends the products to your buyers. The buyers think the products come from you.

So what's in it for me?

Lets say you sell a product for £10 and the supplier sells it for £5. You just made £5 (minus any service fees such as Paypal fees).

So is there actual profit in it?

I get asked this allot and the simple answer is that you need to check the prices from your potential supplier against retail prices for the products they sell. Do your homework! If you have access to the suppliers products prices then Google some of the products and see where else is selling these products and how much they are being sold for. If retail stores are selling these products for the same price as the supplier then there would obviously be no profit. You will never have a massive profit dropshipping but a good supplier will leave you a margin because without a margin you won't sell their products and if you don't sell their product they won't make any profit. The truth is that if you were to buy wholesale and sell the items individually then there would a far bigger profit margin than dropshipping however you would need to buy wholesale. This means you would need to buy a bulk amount of products up-front. There would be a large upfront cost and you would need to store the products and send the products yourself. You will have a lower profit margin dropshipping but you have a far smaller upfront/ getting started cost, not have to worry about storing the products and not have to worry about sending the products. Everything can be done from your PC.

So what's in it for the supplier?

It offers them a new outlet for sales.

What's the sales process?

A buyer buys from you. You buy from the supplier. The supplier sends your buyer the products.

Where can I sell?

This is usually up to you. You can open an online shop or sell on a market place such as eBay. Sometimes the supplier says you cannot sell on certain platforms so do check with the supplier first.

Where can I find a supplier?

Usually if you Google "dropshippers" a number of suppliers will come up. There are many suppliers in most regions which sell all types of products.

The supplier wants to charge a upfront or monthly fee. Should I use them?

This depends. If the supplier is offering something like a "stocked online Store" for a fixed or monthly fee then perhaps. In this scenario they will give you a full working store that auto updates with their products. Sometimes the sales process is even automated meaning you won't have to do anything. If however they are just offering access to their products for a fee then I would advise against it. Usually when a supplier has a fee of some sort they justify it by saying it stops random visitors who just wish to buy a single cheap product from them but there are better ways to do this. A manual sign up process where the supplier checks your credentials before giving you access to their site is a far better messure. Or they could give tiered pricing so the first coulple of sales are at retail price and then your buying price automatically drops to the lower dropshipping amount for any sale after. My argument against a fee is that suppliers should be making their money from selling products not from charging you a fee. If they are charging a fee you must ask the question is their business model to make a profit from the subscription and not their products? And if so are they actually a real supplier or perhaps just a business that is selling products from another supplier elsewhere?

I want to sell all of the supplier products. How do I do this?

This is a complicated question as you will need a number of things. It also depends where you wish to sell the products. The short answer is that you will need a supplier that offers a full list of their products in a CSV or XML format. To fully automate the process this spreadsheet needs to downloadedable whilst you are not logged in to your account at your supplier. You then need to process this file somehow using some sort of importer where you wish to sell these products. The supplier MUST also have a full list of shipping prices. Without this you will not be able to work out shipping costs for the goods you sell.

If you wish to sell on eBay they have a page they talks a little about this here.

If you wish to sell on your own website then you will need a hosted shop that can import products. The traditional method would be to buy a domain and hosting, install a shop script such as Opencart, buy an add-on that can import spreadsheets into the shop and finally configure this add-on so it automatically imports the products each night. The good import scripts can also download the product images but this will all depend on the spreadsheet and how much info it contains.

There are some other methods, Wix and Wordpress both have shop add-ons and should be able to import products. Both will still normally require manual set-up and if you are new to web design you might still have difficulties.

There is also another simpler way. Newpurple is able to create a fully working shop instantly which can import products from one of a number of suppliers meaning that you don't have to worry about setting everything up yourself.

There is a list of suppliers Newpurple can import products from here
There is a list of pre-setup shops that can be instantly built here
Newpurple offers a 14 day free trial to test out the service.

Article by Andrew Brocklesby Facebook Twitter Reddit LinkedIn Email