The online retail market is a $220 billion industry. With so many ecommerce success stories drifting around the web, launching your own virtual store may sound like a great way to make it big.
The question is, “how are you truly going to make money online.”
Few people consider the high costs that come with starting an online business. You need space to operate, a place to store products, employees to help with inventory, shipping materials, and more.
Luckily, there is a low-cost solution that can allow anyone to make money online. That solution is drop shipping. Keep reading to learn everything you need to know to make money online with a drop shipping business.
What is Drop Shipping?
Drop shipping is the process by which an online business sells products that are supplied, packaged, and shipped by a different business.
The online business operates a virtual storefront, where shoppers can browse any available products. But instead of physically purchasing and receiving these items, and then being forced to store them, inventory them, and finally, to package and ship them, the online business sources products from a manufacturer.
This manufacturer makes the products. Or, they may simply be a warehouse that purchases products from elsewhere, stores them, and then sells them to other businesses.
In the case of online businesses, the manufacturer keeps the products in their warehouse, even after they get listed online in a virtual storefront. When an online shopper purchases a product, a notification gets sent to the manufacturer.
The manufacturer then ships the product directly to the buyer. The owner of the virtual storefront gets paid, and then pays the product cost and an additional handling and/or shipping fee to the manufacturer.
Start a Drop Shipping Business
If you're thinking about starting your own drop shipping business to make money online, the first thing you'll need is an idea.
Your idea should be the type of virtual store that you'd like to launch. The options for this are endless.
If you're into fashion, you could open a virtual clothing store.
If you're an avid outdoorsmen, you could offer camping and other outdoor gear in your store.
You could make money online selling books, homewares, or any other products that you can think of.
Finding a Manufacturer
The next step is to find a manufacturer.
Start by searching for manufacturers that sell your chosen items. Make sure that the manufacturers that you're looking at not only sell the right products but also that they offer drop shipping. Otherwise, you may end up responsible for buying the goods up front, storing them, and then packaging and shipping them to customers on your own.
Choosing the right manufacturer is important. Beware of suppliers who charge upfront costs or who have minimum purchase rules.
With either of these red flags, you could end up spending too much money upfront that you won't be able to make up for it through sales of your products later on.
Building Your Virtual Store
Once you've chosen your products and found a manufacturer, it's time to start building your virtual store.
For this, you'll need a domain name and a website with hosting. Make sure that the hosting you choose allows you to add a virtual store and checkout option. Many hosts don't allow this, or they charge a premium for it.
Additionally, if you don't have web design experience, setting up a virtual store from scratch can be a challenge.
To simplify this process and ensure that you end up with a functioning, well-designed store, it's best to build your virtual store through Shopify.
Adding Products and Managing Sales
Once you've set up shop, its time to start adding and selling products. You'll need to add products to your site and make them available for customers to buy.
Adding products to your site is a time-consuming process. In order to make a good profit, you'll need to add a large number of products and keep that number high throughout the life of your online business.
To make money online more easily, it's best to invest in product management software. You'll get a range of features that make it easy to find and add products to your store, maintain an inventory database, fulfill orders, and more.
The Pros and Cons of Starting a Drop Shipping Business
Drop shipping can be a great way to make money online. But while there are plenty of pros to setting up a virtual store and utilizing drop shipping, there are plenty of cons as well.
While drop shipping does eliminate the costs associated with storing, packaging, and then shipping products, you won't make the same profit that you would if you completed those tasks. That's because you'll owe a shipping and handling fee to the manufacturer.
While this cuts into your profit margin, drop shipping opens up the opportunity to sell much higher volumes of products, without needing to hire tons of employees to help with inventory and distribution.
With the help of inventory software, you can add hundreds of products to your virtual store quickly and easily, and then sell just as many, without the time and hassle of packing and shipping those items.
Learn How to Begin to Make Money Online with a Drop Shipping Business
If you're ready to begin to make money online, it's time to start building your own drop shipping business.
Starting with your great business idea, build a great website, find the right manufacturer to buy your products from, and set up shop. With a little bit of work and a lot of marketing, you'll be well on your way to landing sales and be making money in no time.
They can help to make the process of selecting and uploading products to your virtual store a breeze.