DropShipping is known for its significant advantages in direct comparison with classic online trading. Here, the low start-up costs and the low current expenditure are the main factors. With all the positive effects, however, it should not be overlooked that this trading model is also associated with one or the other disadvantage and risk. However, these do not have a problematic effect if you take care of them in time and with the right strategy. We will introduce you to DropShipping and familiarize you with its advantages and disadvantages. We present you with strategic solutions to the existing risks and thus support you in getting the best out of the trading model. DropShipping is simple and contemporaryDropShipping is very popular with founders and Internet entrepreneurs. The trading model is based on a very similar business approach to online trading, but makes a decisive difference. The trader does not purchase his goods in advance from his suppliers. Instead, they remain in the latter’s warehouse and are shipped directly from the manufacturer or wholesaler to the final customer as soon as the latter’s order has been received. In principle, this difference is not discernible to the customer. He receives his delivery just as quickly as directly. His only contact is and remains the online retailer from whom he has purchased. Interesting in this context: There are definitely traditional models for drop shipping or, as it was often called in the past, drop shipments. Just think of the classic furniture store. Furniture from many different manufacturers is exhibited here. If you want to buy one of the pieces, it will be made for you by the respective manufacturer. After a few weeks you will receive the delivery. It is delivered directly to your house or apartment and is usually delivered by the respective manufacturer or wholesaler and not by the furniture store. DropShipping is therefore possible in any situation in which you make a purchase without taking the goods with you immediately. While this used to be common in the furniture trade, we now find ourselves in the same situation in e-commerce. No customer can receive his order directly when shopping in an online shop. It has to be shipped first. And whether this shipment is ultimately carried out via the dealer or his supplier is no different for the consumer.
These advantages make DropShipping so successfulThe structure and fundamentals of the DropShipping business model are associated with a number of advantages for shop operators, which we will take a closer look at below. The most important advantages are: – Hardly any start-up costs The low start-up costs are mainly due to the fact that as a DropShipping dealer you do not have to build up your own inventory. Classically working online traders usually spend a lot of money on this in the start-up phase. After all, all products offered in the range must be purchased at least in small quantities, which is associated with high expenditure. This advantage also continues in terms of running costs. Since no stock is purchased, it does not have to be stored or shipped. As a result, this saves warehousing, personnel and material costs, among other things. In addition, the DropShipping dealer does not have to deal with small-step order processing. This saves a lot of time and ensures that he can focus more on customer care and the marketing of his shop and offers. Last but not least, there are special advantages for products that are associated with particularly high transport costs due to their size. Since the supplier ships directly to the end customer, the shipping costs are only incurred once here, while the classic online retailer has to pay for the costs of two routes.
These are the risks for DropShipper and this is how you meet themNow it would be a completely abridged description if one were to conceal the fact that trade via drop shipping would not also have disadvantages and critical potentials. It is very important that you as a founder and entrepreneur are aware of these limitations. If this is the case, then you can develop solutions in good time. If this is done, the disadvantages and risks of DropShipping can be almost completely eliminated. In the following we present the most important and most serious risks of DropShipping in detail. We have developed an effective and easy to implement solution strategy for each of the five disadvantages. If you consistently consider these strategies, you can minimize or even eliminate all drop shipping risks. Risk 1:
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You should avoid these errors at all costs
In order for a DropShipping trade to start successfully, it is important to exclude potential sources of error. Below are the ten most common mistakes made by inexperienced DropShipping resellers. Those who take these sources of error into account when setting up their own drop shipping business and consistently avoid them have good prospects of a profitable and flourishing company in the long term.
Error 1:
Market and consumer interests disregarded
Products cannot be sold without a reasonable demand on the market and a corresponding interest on the part of consumers. Before you decide on a specific trading area, you should carefully analyze the market potential. In this context, do not only examine whether the respective goods are in high demand, but also get an accurate impression of the competition and the current prices on the market.
If you succeed in discovering a promising niche that has so far been little occupied, then your chances of successful sales will increase. If you have well-founded doubts about the success potential of products, then you prefer to choose a different product area.
Error 2:
Too little time is invested in the selection of suppliers
Anyone who’s too quick for a DropShipping Suppliers who risks overlooking crucial details. Every potential drop-shipping provider has to be put through its paces before starting a concrete cooperation. This requires comprehensive research, which ideally also involves personal discussions. One way to get in touch with potential suppliers is through appropriate trade fairs and commercial exhibitions.
Extensively test the efficiency of the potential wholesaler. Make some test orders and especially check the quality of the products and the reliability of the delivery. Question existing customers of the respective supplier about their Experience with DropShipping at the company and search the Internet for opinions and ratings.
Error 3:
Conditions with suppliers are not well negotiated
The profit is made on the purchase. Remember this old principle of successful merchants and check the purchase prices of your DropShipping suppliers carefully. Wrong shame in negotiating list prices is out of place here. Your counterpart is an experienced dealer and will not feel attacked by an open request for special discounts and better prices.
However, do not only consider the pure product price, but also agree the costs and fees for shipping and handling with your suppliers. Please also talk about minimum order quantities and any surcharges for small quantities that may apply. These conditions must in any case be clearly agreed before the start of the cooperation, as they are very decisive for your future profits.
Error 4:
Products are traded that you don’t understand.
When selecting a product area, you should not be guided solely by market opportunities and achievable profit margins. Make sure that you have as much personal reference as possible to your future product range. Keep in mind that you can describe and document products that you know well much better. As a specialist stranger, the compilation of a consumer-oriented assortment would already present you with an almost unsolvable task.
When choosing a specific product group, remember that you need to answer customer questions regularly, both before and after the purchase. If you decide on products that interest you personally, you will follow the markets, the technical innovations and the trends anyway and will not have to invest additional working time for this.
Error 5:
The costs in the DropShipping trade are underestimated
Those who opt for a business model based on drop shipping often have the low start-up costs in mind. Even if this business model requires considerably less capital than a comparable concept in classic trading, you will still have to bear various costs. You should be aware of these and take them carefully into account in your planning. Think, for example, of the software and design of your future online shop and the expenses for programming interfaces to the respective suppliers.
In addition, calculate the costs of setting up your future workplace, creating business stationery and include the advertising and marketing expenses necessary to make your future shop known on the Internet. Although drop shipping allows you to dispense with a warehouse and staff for warehousing and shipping, you should consider early on who can support you in handling customer inquiries and support tasks and what this support will cost you.
Error 6:
No regulations are made with return of goods
If you sell products on the Internet to private customers, then you are legally obliged to grant the buyer a 14-day right of return. Remember that this right does not apply between you and your DropShipping supplier. This is due to the fact that there is trade between merchants here and that in this environment the rules of private consumer protection do not apply. Under certain circumstances it may be possible to agree an extraordinary right of return with the DropShipping supplier.
If your supplier is not prepared to do this, you should plan to sell returns on eBay. Keep in mind that you will not normally achieve the originally planned sales price with such returns. Please also clarify with your DropShipping suppliers how to proceed in warranty and guarantee cases. In any case, agree to whom the customer can return a defective product during the warranty period and how it will be replaced.
Error 7:
Communication with the supplier is inadequate
In order to convince yourself of the efficiency of a drop shipping supplier of your choice, you should personally and locally get an exact picture of the company of the future partner. Although today a large part of commercial communication is handled by telephone or e-mail, personal contact, especially at the beginning of the cooperation, cannot be replaced by anything else. In direct dialogue, you have better opportunities to negotiate concrete prices and conditions.
In the premises of your potential supplier you can get a comprehensive picture of the seriousness and efficiency of the company. Check whether the products offered are actually in the warehouse and have the processing structures and processes in the company explained to you. Pay particular attention to how quickly incoming orders are processed and ordered goods shipped.
Error 8:
The amount of work is underestimated
Online trading via drop shipping involves considerably less processing effort than traditional mail order trading. However, even the modern form of online trading cannot do without planning and structure. It is therefore imperative that you plan in indispensable work steps and increased time requirements.
On the one hand, you should not underestimate the effort involved in the careful care of prospective buyers and customers. On the other hand, the business relationship with your drop shipping suppliers can also involve a greater amount of work if, for example, inventories have to be transferred manually instead of being updated via a data interface.
Error 9:
The ability of the goods to be delivered is not checked optimally.
As a drop-shipping online retailer, it is your responsibility to verify the delivery capability of the products you offer. If a product is not available or only available late, this is due to your reputation as an Internet trader. When trading drop-shipping products on eBay, even the seller guidelines oblige you as a seller to make sure that the products can be shipped immediately after the sale.
The consequences of delayed availability of products can also affect you economically. For example, if a customer orders two products, one of which is not available on schedule, you usually pay twice the shipping costs.
Error 10:
Goods with high return rates are selected
Product returns are part of the daily routine of every online retailer. Both the law and the general rules for customer friendliness require an unconditional right of return of at least 14 days. In many cases, returned goods can no longer be sold regularly, but must instead be sold elsewhere, usually at a lower price. The resulting losses are to be borne by the online merchant himself.
Against this background, the product areas envisaged should also be reviewed with regard to the return rate to be expected. The market knows of various product categories which are particularly susceptible to returns and can therefore be classified as unsuitable for drop shipping. An example of this is the clothing sector. Here, the return rates can reach up to 40 percent in some cases.
If you know the most serious mistakes, then you are in the best position to avoid them consistently. To complete the picture, we provide you in our guidebook in addition 7 stumbling blocks on the road to success in front of you. So you are optimally prepared to do everything right.
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The post DropShipping: The 10 most common startup errors appeared first on Drop It! Studio.
Via https://dropit.studio/business/dropshipping-the-10-most-common-startup-errors/
Online trading via DropShipping is an excellent way to realize your dream of owning your own trading company without special capital and with reduced effort. Instead of tying up the available capital through extensive purchases of goods and, in addition, bearing the risk of poor saleability of the products, retailers can bring large and attractive product ranges to the market by means of drop-ship business without the retailer having to put all his eggs in one basket. However, in order for this modern form of retail to achieve the desired success, it is extremely important to pay particular attention to the selection of the optimal retail partners. A look into practice shows that especially beginners tend to make the same mistakes again and again.
If the selection of drop shipping providers is not made carefully enough, the newly founded company can quickly find itself in an economic slant. This is all the more annoying because the errors can be effectively avoided with a little background knowledge. In the following, we introduce you to the five most common error sources in the selection of suitable DropShipping partners and explain how these error sources can be effectively eliminated.
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Problems of Understanding and Legal Uncertainty in International Partnerships
At first glance, the product ranges of international retailers often appear extremely attractive. Here committed online retailers will not only find unusual product ideas and current trends, but in many cases will also achieve very advantageous purchase prices. Although these are clearly convincing advantages and many international manufacturers and wholesalers also offer drop shipping, the potential problems that may arise in cooperating with these companies should not be ignored.
Think especially of possible language barriers, which can quickly cause annoying misunderstandings. In addition, it is sometimes impossible for foreign suppliers to dispatch individual deliveries to Germany quickly and flexibly. And the legal aspect should not be underestimated either. If disputes arise between you and your foreign supplier, these are usually decided in the country of origin and therefore not in accordance with German law.
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Insufficient verification of reliability and quality
The be-all and end-all of online trading via DropShipping is a punctual and reliable delivery of the ordered goods to your end customers. In this context, it is important for online merchants to remember that the quality of deliveries can only be as good as the performance of the chosen supplier dictates. Against this background it is indispensable to check a potential supplier as thoroughly as possible before starting the cooperation.
Place several test orders and determine the respective delivery time. Take a close look at the products supplied and ensure that they are of perfect quality. Use the research possibilities on the Internet and search specifically for customer opinions and criticism about the potential partner.
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The missing personal contact to the DropShipping supplier
Our modern communication lives from the media of our time. In many cases, the personal conversation has been replaced by contact via the Internet, e-mail or chat. Even though these means of communication are practical and time-saving in stressful everyday working life, the personal impression counts when choosing a long-term partner.
With this in mind, you should try to get to know your future DropShipping wholesalers personally and discuss the possibilities and options for cooperation in a direct conversation. Apart from the fact that this gives you an accurate impression of your counterpart, critical price negotiations can also be carried out more successfully in a “one-on-one discussion” than in communication via the Internet or e-mail.
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Incalculable hurdles and barriers to the day-to-day running of a business
Even if the assortment and the prices of the potential DropShipping provider seem so attractive, you should not neglect to check the supplier and his performance against the background of the daily work. Especially when your business is booming, a seemingly small gap in your supplier’s performance can quickly become a big problem.
In this context, check above all whether the partner insists on minimum purchase quantities, whether it is possible for you to check the current stock levels on a daily basis, whether interfaces exist that can be integrated into your own software and whether the payment options granted to you by the supplier allow you to process your own customer orders quickly.
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DropShipping suppliers with little experience in drop shipments
The topic of drop shipping is on everyone’s lips and more and more manufacturers and wholesalers have discovered this form of trade in the meantime in the hope of generating additional sales in drop shipments. However, caution is required if the supplier has little or no experience in drop shipping. Especially in the initiation of a business relationship weaknesses and deficits are only too gladly concealed.
If, however, it turns out in retrospect that the selected supplier first collects his first experience with drop shipments, then problems and difficulties are inevitable. Therefore, make sure in any case that the partner has sufficient experience and, in case of doubt, use the Internet to research the potential supplier.
With regard to the most serious mistakes in supplier selection, no one can fool you anymore. To ensure that your DropShipping business gets off to an optimal start, we have included exclusive Practical tips for success with DropShipping in front of you.
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The post The five most common errors in selecting suitable DropShipping suppliers appeared first on Drop It! Studio.
Via https://dropit.studio/business/the-five-most-common-errors-in-selecting-suitable-dropshipping-suppliers/
In online trading, one trend is more than clear: the larger and more bulky an item is, the smaller the competition will be. A look at the Internet immediately confirms this impression. While there are innumerable suppliers who trade with mobile phone accessories, electrical articles, sound carriers or other, rather small products, one must already investigate something more thoroughly after a dealer for finished garages, forklifts, Carports, garden pavilions, whirlpools, saunas, fitness devices, fire-places and stoves or riding on mowers.
Reason enough for ambitious online retailers to take a closer look at these product areas. Anyone who combines this product branch with modern drop shipping, i.e. does not buy the goods in advance, does not store them himself and does not ship them himself, will quickly discover a trade area that has a lot to offer.
In the following we would like to introduce you to the advantages of trading large and bulky goods via drop shipping. You will learn how low competitive pressure affects your business, how to generate high sales and profits with few sales per month, how to easily find suppliers who offer DropShipping, what are the advantages in terms of shipping costs compared to the traditional stocking trade and how this improves your own market chances, how you benefit from low return rates and how the trade with large and rather high-priced products leads to more trust in you by consumers and end customers.
In addition, we will also discuss the existing risk potentials of this form of trading and explain step by step what needs to be considered if you want to successfully trade large and bulky products as a DropShipper.
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The bigger the product, the smaller the competition
When online merchants decide to sell large, bulky goods, they have to deal with problems that the DropShipper does not know about. In classic retail, large goods require enormous storage space and thus high rental and ancillary costs. In addition, there are investments in suitable shelving systems and other technical facilities that are not needed when trading comparatively small products. Even the demands on the personnel can be higher here if, for example, forklift trucks or other storage equipment must be used which require a certain training. If you also have to deal with the transport of large goods yourself, you will need special transporters or trucks, the purchase and maintenance of which are in turn associated with high costs. Also the effort and the expenses around the area of packaging are considerably higher than it is the case in comparison with smaller and handy products.
Large rooms, special equipment and machines, but also particularly large cardboard boxes, oversized foils and large quantities of filling material quickly consume a fortune. In short, trading in large and bulky products is, if you don’t work with drop shipping, expensive, with special expertise, enormous costs and considerable investment. Only a few online merchants can represent this in total. As a result, there is much less competition to trade in these products than in other product categories.
Those who become active here with the techniques of DropShipping will not be hit by the disadvantages mentioned. In this case, storage, packaging and dispatch shall be carried out by the supplier. The DropShipping dealer himself benefits fully from the low competition without having to accept the disadvantages of trading bulky and large goods. The low level of competition has a positive effect in several respects.
On the one hand, it is much easier to draw the attention of interested consumers to one’s own offer. Only a few market participants fight for the highest ranks at Google & Co. and so it is connected with less big problems to place the own presence on the web positively at the search engines than it is the case in the highly competitive mass markets.
Mass markets also lead to a pronounced price war between the numerous dealers in the respective segment. The situation is different in the trade with large and bulky goods: the low competitive pressure here ensures a moderate price war and enables dealers who offer such products via drop shipping to achieve excellent profit margins and trade margins. In the following sections we will show you the further advantages associated with the sale of large and bulky products.
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High turnover with the sale of fewer products
Who trades with ordinary goods of the daily need, must sell many of them, in order to be able to make a sufficient living. Imagine trading in products that cost only a few euros. Even with a high profit margin and modest demands on one’s own profit, thousands of items have to be sold successfully month after month in order to generate the fixed costs and a low profit.
In turn, the sale of numerous commodities means that many buyers have to be found and convinced. If one assumes that it is associated with effort, time and money to win a new customer, it is of course much easier to earn one’s income with large and expensive products.
Calculation example for the trade with prefabricated garages
For a model that costs the end customer 6,900.00 euros and generates a profit of 15% of the net price, the dealer has a profit of 869.75 euros before tax per garage sold. If you now assume only four garages sold per month, i.e. one sale per week, then a monthly profit before taxes of 3,479.00 euros already results.
In addition, with this model, the dealer has significantly more time to focus on marketing, customer support and SEO than a dealer would be able to handle hundreds of weekly orders. The sale of the prefabricated garages cited above does not require a large number of employees, nor does it require special software or time-consuming processing. Even the bookkeeping is easy here, as there are only a few incoming and outgoing invoices to be booked. The business model is clear and easy to understand, even for newcomers.
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Partner search made easy: bulky goods are delivered directly by most suppliers anyway
One of the biggest difficulties for DropShipping dealers is probably the search for suitable suppliers who actively support such a form of shipment. Anyone who deals with small mass products will hear frequent refusals from potential supply partners when they make enquiries. This is not because these wholesalers or manufacturers are generally not interested in good business. The point is rather that for such a company, the sale and dispatch of only one product can generally hardly pay off.
Imagine a company dealing in plastic footballs. These are usually sold to department store chains, large mail order companies, purchasing cooperatives or even larger online shops. The average sales volume is expected to be in the range of several hundred balls. The balls will probably be shipped in wire boxes, at least if they have already been inflated.
If the same provider would now agree to offer its balls individually via drop shipping, it would have to make a completely different calculation. This would include the increased effort for packing and shipping individual balls, which would have to be sent as a package due to their large volume. Since these costs would have to be borne in any case, the ball would be disproportionately high for the end customer compared to the price in the consumer market, in the catalogue or in a large online shop. The consequence: For the manufacturer or wholesaler it is not particularly interesting to offer his products by DropShipping.
The situation is completely different with large and bulky products. Here the manufacturer or wholesaler usually delivers directly to the end customer anyway. Imagine a furniture store, for example. Although some of the available models are exhibited here, the exhibition contains only a small part of the programme actually available. Each available piece is usually available in different sizes, colours, woods or finishes.
If an end customer decides to buy this or that sofa in the colour of his choice, it is manufactured specifically for him and then sent to him. Here the transport very often does not first take place to the furniture store but rather directly to the ordering end customer. You see: The DropShipping principle has existed for a long time in relation to large and bulky products. The online retailer with DropShipping ambitions can benefit from these already existing structures and will have it easy to find suitable suppliers.
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DropShippers benefit from the high storage and shipping costs of traditional retailers
Before we begin to enumerate the other advantages that the trade with bulky products brings with it via drop shipping, let us first take a look at the disadvantages for the sake of balance. Imagine an online retailer selling large and bulky goods without the use of drop shipping. He orders the sales goods in advance from his suppliers. If the customer increases the quantity, he will receive a discount from the respective supplier which is not available to the DropShipping dealer.
Let’s assume in this example that the classically working retailer stocks some carports, garden pavilions or home saunas. There is one thing you have to be clear about: he will certainly not buy 100 or 500 or even 1000 carports and store them. In reality, we may be talking about two or four or five products. What will be the discount granted by the manufacturer? We can assume that the additional discount compared to an individual order is not particularly high and remains well below the 10% mark.
Now to the drawbacks. The classic retailer buys the products before reselling them. He must therefore not only pay for them, but also have them transported to him and stored. He needs capital, suitable premises and personnel. In addition, he bears the risk of not being able to sell the purchased products as desired. A new manufacturer with attractive prices, a new technical development or even an economic crisis and the goods purchased at high prices quickly prove to be unsaleable or have to be thrown onto the market at the lowest prices.
In addition, the multiple shipment of goods entails the risk of damage and minor defects to the goods. This can then often only be offered as B-goods at lower prices. The classic trader must include these risk potentials in his price calculation in order to survive economically. The DropShipping retailer does not know the costs and risks mentioned and will only pay a surcharge of a few percent when purchasing. As a result, it will be able to offer its products on the market at a significantly lower price and will also achieve a higher profit margin. The advantages of mail order via drop shipping are obvious: no capital requirement, no goods risk, less workload and higher profit margins speak for themselves.
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Low or eliminated shipping costs significantly improve market opportunities
Manufacturers and wholesalers dealing in bulky and large products have proven and tested transport systems. For these companies, the organisation of problematic transports is not the exception, but part of their daily duties. Either the transport is carried out here with our own fleet of vehicles or there are long-term contracts with transport companies and forwarding agents. In any case, one can assume that the transport will be optimized again and again by the corresponding supplier companies from an economic point of view.
This also benefits the DropShipping dealer to a great extent. If, for example, shipping is carried out via the manufacturer’s or wholesaler’s own transport network, the shipping costs for the DropShipping dealer are either very low or are completely eliminated. For the supplier, delivery to the end customer is no exception. Therefore, there is no reason for him to charge high extra costs or surcharges for this.
This enables the DropShipping trader to offer its customers the shipment of goods either at a very low price or even free of charge. Practice in the online trade shows that the consumer clearly prefers offers for which no shipping costs are charged. This gives the DropShipping dealer a clear market advantage over “stocked” competitors.
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Large products lead to low return rates in practice
A high return rate is a major problem for any online retailer. The law stipulates that any product ordered via the Internet can be returned within 14 days without giving reasons and in this case the purchase price must be refunded. It is up to the retailer to restore the returned goods to their original condition. Even if this must not be damaged by the consumer’s trial use, it is still necessary to replace small overpacks, iron garments or put multi-part products back exactly into their packaging.
In practice, it is hardly possible to restore a product from the return shipment completely to its original condition. Here remains only the sale at the reduced price or the auction via eBay. In both cases, the trader no longer earns his full margin here and also has an increased workload.
In practice, the consumer-friendly right of return often leads to consumer behaviour that represents an economic and time-consuming burden for the retailer. Product areas such as electrical goods or clothing in particular have extremely high return rates. In the clothing sector, the return of products has already become a standard behaviour of customers. A particular garment is ordered directly in two sizes to try out at home which fits better.
The return shipment is therefore already fixed with the order. Some consumers even use the right of return to order clothes, shoes and jewellery for a festive occasion and send these products back afterwards. Even if the right of return is understandable, fair and comprehensible from the consumer’s point of view, it is often not considered here that the burdens of this right must be borne by online traders.
It is in the nature of things that certain products and categories of goods are associated with certain return rates. As already mentioned, these are particularly high for clothing, electronics and other small and rather low-priced products. Here the customer does not think long before the completion of the order. Careless purchases, which are already regretted the next day, are pre-programmed here. One can imagine that a consumer, before ordering a carport, a whirlpool, a fountain for the garden or a fireplace, thinks for a while about his purchase plans and places the order only when he is sure that he actually wants to buy the product.
Both the expense of shipping and packaging and the rather high price clearly discourage consumers from ordering a product on a trial basis only and from already planning the return shipment. DropShipping dealers who specialize in trading large, bulky products benefit from the comparatively low return rates, which save both time and money.
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Specialisation in large products promotes basic consumer confidence
Those who trade in large products are assumed by the consumer to have a high level of competence and a certain company size on the market. Nobody can imagine that trading in prefabricated garages, ride-on mowers, whirlpools or other large, bulky products is perhaps only done by one person working part-time from home. This approach leads to an advance of trust by the buyer, which can lead to a higher sales quota than is the case when trading in products that are considered to be mass-produced or already have a rather dubious reputation.
The dedicated DropShipping retailer has a number of ways to support and reinforce this positive consumer assessment. It has proved successful to be able to demonstrate specialisation within a certain niche. For example, if you are dealing in free-standing, heated outdoor spas, you can increase confidence by trading not just one but 10 or 20 different models instead. The more documentation the retailer offers his customers, the more professional is his public image. If there is an offer to request brochures, product videos can be seen, customer ratings are published and the dealer provides a lot of background information about the represented product area, then the customer’s trust increases enormously. This in turn leads to a significantly higher sales ratio.
As with any other online retailer, the same applies to the DropShipping retailer: Don’t disappoint the trust your potential customers place in you before they make a purchase. Try to provide impeccable customer service and prove to your buyers that you deserve the trust they have placed in you. In this way you build an excellent reputation and the recommendation of your services by your customers is the most valuable advertisement you can receive for your company.
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Drop shipping large and bulky products: special attention should be paid to this
If you are an online retailer interested in selling bulky and large goods via drop shipping, then you are on the right track conceptually. So far, we have shown you the decisive advantages of this form of trade and shown you that you can gain a clear advantage over the retailer who stocks the goods himself. Before you start to design and implement an appropriate business model, we would like to briefly name a few essential aspects that need to be taken into account in this form of retail.
As a DropShipping dealer, you should always clearly agree with your suppliers how to proceed in the event of returns, revocation, and warranty or guarantee claims. What is already extremely useful when trading with smaller products, becomes the indispensable basis of your business when selling large, bulky and thus expensive goods. In any case, you should only work with suppliers who, in all cases mentioned, take back the goods without objection and who are also responsible for collecting the corresponding goods from the end customer. In addition, always agree with your supplier that he is responsible for damage during transport and that a suitable transport insurance exists.
In contrast, you should clarify clearly with your end customers during the order process whether delivery is possible at all with regard to the structural conditions. Not every billiard table can be transported to every attic flat. Not every access road is large enough for a truck and not every garden path is wide enough to transport an outdoor whirlpool. In the product description, clearly state the requirements that arise during transport and oblige the customer to check these requirements and take responsibility for them. In addition, save the delivery date twice. In contrast to delivery by parcel service, it is not possible with these deliveries without additional costs that a customer is approached several times if he is initially not reachable.
If you take these critical aspects into account and incorporate them into your individual trading concept, then the sale of large and bulky products via drop shipping offers you excellent prospects for good sales and high profit margins.
The advantages of trading large and bulky products are really impressive. But did you know that DropShipping can also score in the B2B sector? We provide 5 proven strategies for dedicated retailers and show you concretely how well B2B concepts and DropShipping harmonize.
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Via https://dropit.studio/business/good-times-for-dropshipper-how-to-benefit-from-trading-with-large-and-bulky-products/
Experts in e-commerce know exactly: Trading within a market niche offers extensive advantages compared to serving mass markets: First of all, the reduced competitive pressure leads to stable and profitable price structures and thus to sustainably high profits. Despite its niche position, the Internet offers optimal opportunities to reach a large number of interested consumers.
The positive positioning of own offers with the search engines is much easier in a niche area than in a mass market. Ultimately, specialisation in a clearly defined specialist area ensures increased trust between customer and dealer. Any newcomer who is inspired by the idea of developing his company from newcomer to market leader within a manageable period of time can generally only achieve this in a niche area. The established suppliers on the mass markets have already been expanding their market position for a long time and are usually no longer able to catch up with newcomers.
One of the main reasons for the failure of young companies in the online trading sector is the inadequate capitalisation of newly established companies. Clever founders strive from the outset to achieve a manageable cost structure and a realistic assessment of the initial course of business. The DropShipping business model has proven to be particularly promising. By eliminating the need to purchase goods at one’s own risk and dispensing with storage space and logistics personnel, both start-up and operating costs are comparatively low.
In the following, we would like to introduce you to the advantages of trading in niche markets and explain to you why a combination with the purchasing and settlement system DropShipping is so advantageous in this trading area. We will discuss the great potential in e-commerce of our time, identify the main reasons for the failure of young online companies and explain how to find market niches and fill them with promising concepts.
You will learn why trading in niches helps to build trust between your customers and you, how you can place your own offers advantageously with search engines and how you can benefit from the comparatively high profit margins in niche trading. Using concrete examples, we will finally report on why niche trade and drop shipping complement each other ideally and how you can optimally combine the advantages of both systems.
Online trade in Germany is booming and achieves excellent forecasts
Online commerce has emerged as one of the winners of the global economic crisis. Like hardly any other sector, it was able to show moderate growth rates even in the main crisis year of 2009 and to expand further in 2010. One of the main reasons for this is the growing willingness of German consumers to buy their goods via the Internet. While more and more citizens are taking advantage of the opportunities offered by the new media, mistrust of shopping by click has decreased significantly. Following this trend, more and more online retailers are pushing their diverse business ideas into the markets and presenting products and services online.
A distinction can be made here between companies that have extended their originally classically oriented business to the World Wide Web and those whose companies were founded specifically for online trading. An entry into the sale of goods on the Web is nowadays almost barrier-free possible. The required resources and technologies are available to any interested founder free of charge or for a small fee. Modern trading models such as drop shipping make it possible to set up a trading company even with limited financial resources.
While the situation on the labour markets motivates many people in Germany to think about self-employment as an alternative to dependent wage labour, the entry into online trading is becoming increasingly attractive. Any attentive observer will quickly realise that the diverse areas of e-commerce are far from saturated. Many experts expect that the actual boom in online trading is still ahead of us. Accordingly, there is great interest in setting up one’s own business in this area. As positive as the possibilities and forecasts are: Independence in online trading also entails risks that must be taken into account.
The reasons for the failure of young online businesses
If we look at the market for start-ups in the e-commerce sector and follow the results of young companies during the first years of their existence, we see that around a quarter of the companies concerned do not survive the third financial year. The reasons for premature failure can be divided into different groups. On the one hand, many young entrepreneurs cease self-employment after some time because the daily workload, the stress and effort associated with the work or the profits that can be achieved do not correspond to their original expectations.
Before setting up a business, young entrepreneurs should endeavour to gain as accurate a picture as possible of what they can expect from self-employment in e-commerce. On the other hand, the failure is linked to the lack of viability of corporate financing. Even if entrepreneurs opt for a comparatively inexpensive start-up, the start-up costs are often underestimated and the attainable revenues during the first months of self-employment are often overestimated.
Every founder has to deal comprehensively with the preparation of a reliable and practice-oriented financial plan before the actual initiative takes place. This is the only way to prevent deficits from arising due to misconceptions, which can quickly bring a young company to its knees. If you have only limited capital at your disposal and still want to start your own business as an online trader, you should take a detailed look at the possibilities of drop shipping in order to keep your start-up costs and risks as low as possible.
Practice shows that the chances of survival of young companies with strong specialisation in a clearly defined product area increase significantly. If a niche market with few competitors is chosen, the prospects for business success are further improved. Combining both models, i.e. drop shipping and niche trading, significantly reduces the risk of failure for newly founded companies. As a result, start-up costs are kept as low as possible and market opportunities are increased right from the start by selecting a suitable niche for particularly interesting products.
Niche trading instead of mass market: especially recommended for beginners
It is much easier for newcomers to e-commerce to establish an existence within a market niche than to venture into one of the flourishing but already strongly occupied mass markets. One of the main reasons for this is the reduced competitive pressure, which above all facilitates the entry into online trading. If you are dealing with only a few competitors, it is not so difficult to analyze and understand their trading structures, strategies and pricing policies and to position yourself accordingly rich in opportunities.
For example, the price war between market participants in a niche market is usually less pronounced than in a mass market. For individual traders, this is associated with higher profit margins, which help to overcome financing gaps, especially at the beginning of a professional career. It is also easier to develop a market-oriented product range in the niche trade, since it is easier to identify and take into account the target groups and their needs.
Especially important for the initial success in online trading is the best possible positioning of your own offers in the search engines. Here everyone can imagine that a good ranking at Google & Co. can be realized all the better, the less competitors are involved in the fight for the top places. Ultimately, prospective and new online merchants will be quicker to forgive their starting mistakes in a niche market than they are in a mass market. This is mainly due to the lower level of public attention, which allows those involved to make the one or other mistake without the good reputation having been immediately compromised.
Niche markets are less hectic, less stressful and less under pressure to perform than the well-known mass markets. Beginners in online trading will discover a platform here where they can try out concepts and test strategies in order to significantly increase their performance through their own experiences.
Discover market niches and fill them cleverly
The prerequisite for trading within a market niche is to identify product areas that have so far been poorly represented. For many prospective traders the reflection on their own interests, hobbies or previous knowledge helps. Those who use their personal preferences to derive a sales area in online trading from them will benefit in several ways.
Initially, founders are quicker to recognise the potential that lies in a niche area to which they themselves belong. Here they benefit from the experiences and impressions that they themselves have been able to gather as consumers. If, for example, you are interested in a special music genre, pursue an unusual hobby or belong to a certain scene, you also know the associated markets quite well and can estimate more quickly which types of offers can be placed advantageously in the corresponding environment. Furthermore, members of niche areas usually have a very clear and above all accurate idea of the potential target group. They know the needs of the respective consumers, are familiar with the factors that cause annoyance or frustration and know where to find their target group on the Internet.
Also with regard to the conception of attractive assortments, people who cultivate a corresponding interest themselves usually have it easier. This makes it much easier to track down current trends and select the best and most sensible products possible. Ultimately, members of an interest group also find it easier to present products and communicate with their customers. Those who deal with products that interest them themselves have better prospects of reaching and convincing their target group with their product presentation. Of course, it is also easier to answer consumer questions when you are at home in your own range.
Once you have discovered a potential market niche, however, you should first check how strongly it is already represented in the markets. Research via the Internet helps considerably in this respect. Which suppliers are already active on the corresponding market, at which prices and conditions do they offer their products and which possibilities do you have to sell the corresponding articles at comparable or even cheaper prices? If such a research leads to a positive result, then one should not hesitate long to put the business idea into practice.
Step by step to become an expert in your own trading area
Those who offer their products within a promising market niche present themselves to their potential customers from the outset as experts in their own trading area. Manageable and clearly defined product ranges, which have been consistently geared to special consumer wishes, offer a wide range of possibilities for documenting competence, expertise and expert knowledge.
This already starts on the start page of the online shop. Here, niche dealers can address their clearly defined target group from the outset in such a way that it becomes clear that they are dealing with a specialist who knows what he is talking about. In addition to general information in the start area, the structure of the product navigation also shows that you are dealing with an expert who does not find it difficult to define meaningful categories and subcategories that are exactly tailored to the selected product area. In addition, the concrete product presentation offers ideal opportunities to position oneself as an expert.
Anyone who answers numerous questions about the properties of the products, their technical data or their compatibility with other products in the product description clearly shows that they are familiar with an assortment. At this point, competence creates trust and ensures that new dealers also have a good chance of convincing their potential customers of their own capabilities.
Use in the trade within a niche but not only the standardized elements of shopping sites on the Internet. Rather, offer your visitors clear added value by offering general information, advice, specialist articles and practical tips. These strengthen the perception of your competence and serve a consistent building of trust between your customers and you. In this context, always make it clear that service and advice do not end with the conclusion of a sales transaction. Instead, offer your buyers the option of contacting you with questions and problems at any time after they have made their purchase. Remember that followers of special hobbies and interests are usually in close contact with each other. If you are recommended here as an online trader, this will bring you more customers and therefore more sales.
Google & Co. like market niches very special
An essential success factor in online trading is the position of shopping offers in the relevant search engines. Most consumers start a product search on Google & Co. and choose their favorites for a purchase among the first search results that are displayed to them. To place one’s own offers here as well as possible has therefore the highest priority for success-oriented beginners in the online trade. Here one can easily imagine that it is much easier to achieve a good ranking if the number of competitors and competitors is rather manageable.
If, for example, one tries to reach a good position under such general terms as “television” or “mobile phone”, this is not possible without the use of considerable means of communication. If you instead offer a special aquarium pump, a special diving accessory or a spare part for a special technical device, the low competitive pressure immediately helps you to a better position. Although a good Google ranking is easier to achieve in niche areas than in mass markets, it is not without effort. If you don’t optimize your product pages for the search engines, you have little chance of being found here later.
Use the Internet to research the most important search terms and search phrases for your product area and focus above all on your product texts when implementing advantageous search engine optimisation. These are decisive for the search engines when it comes to assessing how relevant your information and offers can be for interested consumers. Limit your search to a maximum of one or two keywords per product page, otherwise the search engines will rate their relevance lower. Do not only work with internal measures and methods but also make an effort to ensure a good link structure. If you manage to link recognized and well positioned websites directly to your products and your shop, then you have already achieved a lot in terms of search engine optimization and will immediately see the results of your efforts in the form of higher visitor numbers on your pages.
From beginner to market leader: a good opportunity for niche trading
No matter how small you start your own online trading: The objective of almost all Internet salespeople is to obtain the most advantageous market position possible or even to become the market leader in their own product area. The less your product area is represented on the market so far, the better your chances are of achieving a good market position within a comparatively short period of time.
Anyone who tries this in a mass market is exposed to extreme competition from the major suppliers in the industry, which is almost impossible to win with normal means. The big traders on the Internet do not only have the opportunity to invest considerable financial resources in an optimal online marketing. Most of them have been present in the relevant markets for years and have a clear advantage over new market participants and newcomers.
If you opt instead for a niche area in online trading, your chances of market leadership are much higher from the outset. Here you can get an overview of your key competitors within a very short time. Observe your competitors and get an idea of the strategies, concepts and techniques with which the individual providers work. Let yourself be inspired by the methods of your competitors and strive to improve what you have observed and recognised within your own work.
Remember that market leadership is not possible without an excellent reputation with your customers. Against this background, optimal customer service must always be the focus of your efforts. Only if your customers are so enthusiastic about your offers and your service that they would like to return to you for further purchases and actively recommend your services in their own environment do you have the opportunity to work your way step by step to the top of the market.
ext-align: left;”>A further prerequisite for a leading position in your niche market is the permanent maintenance and improvement of your product range. Those who are satisfied with what they have achieved will quickly lose the connection to more active providers. Good product ranges must react quickly and consistently to trends and new developments in your market environment. Those who have accustomed their customers to the fact that they are always provided with the latest information in the respective subject area on the shop pages will generate more repeat visits and correspondingly higher sales rates as a result.
Rich profits through high margins with low competition
Online merchants in mass markets are subject to an extreme price war. Since mass markets are represented by a large number of large suppliers, unbeatable special offers and promotions are the order of the day here. The large retailers purchase considerable quantities of products and often purchase them directly from the international manufacturers. By favourable purchasing conditions but also by mixed calculations and subsidised sales, such suppliers can significantly determine the prices on the market and quickly bring smaller competitors to their knees.
Whoever instead engages in a niche market meets a limited number of competitors and usually has to deal with smaller suppliers. The result is a stable price structure, which enables the retailer to make comparatively high profits. Those who consistently use this potential can realize higher profits per sale and thus achieve an improved business result. The higher the profit per sale, the lower the effort involved in handling the day-to-day business. This has a direct impact on medium and long-term operating expenses. Those who achieve their necessary profits with as few orders as possible can limit the required personnel to a minimum or even completely dispense with employees.
In addition, a stable price structure ensures improved planning capability. If prices fluctuate in one product area, it is almost impossible for the entrepreneur to make accurate forecasts for the near future. If market prices fall and the company’s own price also has to be lowered as a result, the business result also drops. If, on the other hand, prices remain largely stable, accurate forecasts can be made about the further course of business, which help the entrepreneur to steer his company safely and soundly.
DropShipping and niche trade: a special combination
The foundation of an own company is carried out by young founders with a good portion of enthusiasm, ambition and diligence. Although these are all prerequisites for a successful start in self-employment, the early phase after the opening can only be survived and mastered if costs and income are in the best possible relationship to each other. Particularly in the start-up phase, start-up costs and current expenses must be kept as low as possible. At the same time, revenues should flow as early as possible and ensure sufficient profits to finance the company.
If one examines the reasons that lead to the failure of young companies in Germany, an insufficient supply of liquid capital takes first place. Too scarce reserves, especially at the beginning of one’s own independence, ensure that even minor crises or the failure of original forecasts lead to dangerous situations. In order to significantly improve the starting chances, it makes sense to skilfully combine the concepts of drop shipping and niche trading.
Drop-shipping prevents an initial assortment from having to be purchased in advance. Such an advance purchase not only burdens the finances of the young company but also harbours considerable commodity risks. New entrants, in particular, cannot draw on experience in the saleability of certain products and risk remaining in unsaleable positions that create a deep gap in corporate financing.
If the goods are instead procured by drop shipping, the high costs for the acquisition of the company’s own inventory are eliminated, as the goods sold remain with the respective supplier until they are finally sold. In addition, young entrepreneurs who rely on drop shipping do not have to set up their own warehouse and logistics structures. This not only saves space costs and expenses for the furnishings but also enables operation without or with very limited personnel.
Once the initial conditions have been considerably improved by the decision to opt for drop shipping, concentration on niche markets serves to ensure the fastest possible market entry with numerous advantages. Niches can be quickly identified and checked for their suitability for the market with comparatively little effort. Also the placement of own offers with the authoritative search engines is strongly simplified against the background of the small competition. Within a comparatively short period of time, it is thus possible to direct consumer interest to one’s own offerings and to achieve the first sales at short notice.
Suppliers in niche markets position themselves specifically as experts in their own product areas and thus gain the trust of their potential customers more quickly. Especially for newcomers to online trading, who initially do not have a public reputation and a well-developed clientele, confidence building is an essential factor for business success. It is also advantageous that niche markets are characterised by a stable price structure. In this way, medium- and long-term planning can be made without there being any danger that large providers with extreme special offers will influence prices in the short term.
If DropShipping and sales within niche markets are consistently combined with each other, sustainable and promising companies with good prospects of immediate success emerge as a result.
Examples for reasonable combinations of DropShipping and niche trade
Drop shipping is still much less widespread in Germany than in the USA, for example. Nevertheless, this form of trade is currently on the triumphal march through German e-commerce and is constantly finding new followers. Almost every product can be obtained with some research and negotiation skills via DropShipping. Particularly suitable are products that are rather large, bulky and expensive. Wholesalers and manufacturers are already used to delivering directly to end customers. These suppliers do not need to be convinced of the benefits of drop shipping, as they have been practicing this form of trade for many years anyway.
The more expensive the product, the greater the profit that can be achieved with the sale. Those who manage to cover their running costs by selling just a few products can keep their corporate structure small and manageable in the long term. If the entrepreneur also opts for a niche market, he can also book its advantages for himself and the young company.
A good example of a sensible combination of drop shipping and niche trade is the sale of garden houses via the Internet. Dedicated dealers can offer their customers an enormous range of different models to choose from. By using DropShipping, these do not have to be purchased in advance but remain with the respective supplier in a cost- and stock-saving manner. An own warehouse is as little necessary as an own staff of warehouse and logistics personnel. Whereas garden houses in Germany are generally offered mainly as a by-product of DIY and timber markets, a specialist trade specialising exclusively in small outdoor buildings is inadequately represented.
Against this background, it is comparatively easy to gain a good position in search engines as a provider. Ultimately, a shopping site especially for garden houses offers optimal possibilities to offer the visitor a great added value in the form of information. Here, for example, you can report on the minimum size for which a building permit is required for the construction of a garden house and how this can be easily applied for. Also tips and references for the structure and the care of the garden houses will draw the interest of numerous consumers on itself and have good chances on a high-quality position with Google & Co.
Corresponding information offers convey a great deal of competence and thus ensure a great deal of trust between the dealer and his customers. This example can be applied to many other product areas. One thinks here of the trade with carports, prefabricated garages, whirlpools or also the sale of furniture and other bulky objects. Depending on personal preference, a promising niche area can be quickly identified here.
Our practical tip for niche trading with DropShipping
If you are currently in the planning and start-up phase of an online trading company, you should think about both drop shipping and niche trading. If you want to significantly improve your chances in the market, you can combine both concepts into a promising overall strategy. For the development of a sustainable business idea a promising niche should first be sought. Here, the founder can initially fall back on product areas that are directly related to his own interests, hobbies or previous knowledge. Already at the selection stage it should be taken into account that the planned products can be handled by drop shipping.
Large, bulky and expensive products are particularly suitable. Once the product area has been found and a market analysis has shown good sales prospects, the search for suitable suppliers can begin. First, consider companies that are already active in the field of drop shipping. They do not first have to be convinced of the advantages of the trading model. Negotiate with the selected partners not only the pure purchase prices but also actively address the conditions and the procedure in case of returns, complaints and warranty cases.
Even if the selected product range is not particularly susceptible to returns, it will still happen from time to time that a customer withdraws from the purchase. If no concrete agreements have been made with the supplier in this case, high costs can quickly arise which reduce the profit from the successful sales.
By skilfully combining the concepts of drop shipping and niche trading, you significantly increase your chances of a positive market entry and sustainable good business and benefit from the numerous advantages of both strategies.
DropShipping can play out its strengths particularly well in some trading areas, as can be seen from our comments on niche trading. In our next guidebook you will learn how to become a DropShipper from the Trade with large and bulky products can profit from.
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DropShipping on eBay: How to discover the best products for your eBay shop as a DropShipper
9/12/2019
If you as an online retailer decide to use the DropShipping sales method, you will save yourself many problems that conventionally positioned salespeople have to deal with. With a DropShipping model, the products offered are not purchased in advance. Instead, the retailer selects them from one or more DropShipping suppliers and hires them for sale. If an end customer orders one of these products, the online retailer orders the goods from his supplier and has them shipped directly to the customer.
The advantages of DropShipping are obvious
While classical working traders have to spend a lot of money on product purchases at the beginning of their independence, the DropShipping trader gets by almost without capital. If one or more products in the assortment turn out to be unsaleable goods, this has no economic consequences for the DropShipping retailer. Since he did not buy the goods himself, he does not remain sitting on uneconomical stocks.
Especially beginners in the field of online trading like to resort to online marketplaces with a high reach at the beginning of their self-employment. The big advantage: countless consumers are already waiting here for attractive, interesting offers. Making your own shop known through search engine marketing costs time and effort. It can often take weeks or even months until offers have achieved a good position on the result pages of the well-known search engines, above all Google.
If, on the other hand, you discontinue your products on eBay & Co., you can usually enjoy your first sales within a very short time. It is left to the skill of the individual retailer to use the high presence on the marketplaces also for the direct traffic in his own shop. This can be done on the pages of the eBay profile provided for this purpose as well as in direct communication with the customers.
While DropShipping, as a trading model for founders with limited capital, provides ideal opportunities for starting their own business and the placement of products on marketplaces such as eBay ensures initial sales and targeted advertising for their own web shops, both models only develop into top form in combination. But how can drop shipping reconcile trading with the strict eBay guidelines? In the next section, we will clarify whether drop shipping is allowed and desired on eBay.
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Is DropShipping within trading on eBay compliant or undesirable?
Online trading via drop shipping is becoming an attractive alternative to traditional trading for more and more providers on the Internet. Low capital requirements, reduced space and personnel costs as well as an extensive and convincing product range are the main advantages of modern drop shipments. Against this backdrop, many online merchants are faced with the question of whether eBay’s guidelines for the sale of products are met if goods on offer are not owned by the merchant at the time of sale, but are only ordered from his drop-shipping wholesaler after the order has been placed.
The reason for this uncertainty on the part of traders is easy to understand: In the past, eBay’s sales policy had insisted that a product offered must be in the seller’s possession to ensure that it could be shipped to the buyer immediately after the contract was concluded.
These guidelines have since been extensively amended. Germany’s largest auction house reacts to major changes in the mail order business via the Internet. In the past it was common for online merchants not only to offer their products on eBay, but also to store and ship them themselves, but in the meantime there has been a structural change in logistics. More and more retailers no longer store and dispatch their goods themselves but commission special service companies to carry out these tasks.
In addition, eBay’s amended guidelines also meet the needs of the owners of the so-called trademark shops. These are operated and managed by the respective manufacturers: However, the mail order business is generally handled by appropriately commissioned service providers here as well. Irrespective of whether eBay has also taken the growing segment of drop shipping merchants into consideration when changing the guidelines, this group will benefit from the new rules.
In order to exclude the possibility that this is only a gap in the regulations and that eBay does not clearly allow trading via DropShipping, we asked the auction house directly and asked for a corresponding statement. At our request we were informed that DropShipping on eBay is allowed and compliant. However, the seller is instructed to ensure that the goods can be delivered to the customer immediately after conclusion of the contract. This circumstance requires DropShipping dealers to satisfy themselves of a product’s ability to deliver before discontinuing it.
In everyday working life this is usually done by an automatic comparison of the set products and the stock at the drop-shipping wholesaler. If you have already had good experiences with your supplier partner, you can increasingly rely on him being able to dispatch the respective goods immediately after the order has been placed. However, in the case of new partnerships, regular monitoring of supply stocks should not be dispensed with. Ultimately, a breach of the eBay rules does not affect the wholesaler but the reseller, whose duty of care it is to ensure and guarantee the prompt delivery of a product.
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Expressly permitted: Online trading via DropShipping on eBay
If you are familiar with the eBay guidelines, you know that Germany’s largest online auction house insisted some time ago that the eBay seller must actually own the products on offer at the time the offer was made. This restriction would make the DropShipping trade on eBay irregular if the auction house had not decided some time ago to amend these guidelines. The decision makers on eBay did not initially have the growing group of drop shippers in mind. Rather, the adjustment was necessary because more and more professional dealers have outsourced the logistics of their products to external service providers. Thus, these sellers are not actually in possession of the respective goods at the time the offer is made or at any time thereafter.
In order to enable these merchants to sell products on eBay, this includes in particular the relatively new brand shops of well-known manufacturers, which are usually not operated by the respective companies, paragraph 9 of the General Terms and Conditions of the auction house states: “Suppliers must be able to transfer the offered goods to the buyer immediately after conclusion of the contract”. So there is nothing more said about the fact that a product must be in the possession of the dealer to be allowed to be offered on eBay. Rather, it is sufficient if the seller ensures that the goods can be dispatched to the buyer immediately after conclusion of the contract. Since this also applies to the DropShipping business model, the amended policy will provide an indication of eBay’s acceptance of DropShipping merchants.
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What distinguishes an optimal DropShipping product on eBay?
DropShipping suitable products for eBay must meet three main characteristics: On the one hand, they must be in great demand from as many consumers as possible. Secondly, competition must not be excessive. Thirdly, the products must be available for purchase at a price that provides the online retailer with a sufficiently large profit margin. Strong demand is the basic prerequisite for a successful sale. Only if a sufficiently large customer group searches for the respective article, the chance for successful sales exists.
If there are already numerous suppliers who also offer the identical product, the chances of a high sales quota are reduced. It should be noted that eBay customers prefer to use merchants who already have a large number of positive customer reviews. In many cases, trust in a retailer is more relevant for purchasing than the actual selling price. For DropShipping dealers on eBay particularly suitable are in this respect articles, which are characterised both by a high demand and by a rather small offer.
The favourable purchase price of products not only secures the DropShipping dealer the profit margin he needs for his entrepreneurial concept. It is also a prerequisite for being able to offer products at competitive prices. DropShipping dealers must bear in mind that their purchase prices are often not quite as low as those of dealers who purchase a larger quantity of products from their suppliers in advance and at their own risk. These dealers have to bear the disadvantage that they have to pay for the capital commitment, storage and shipping from their own resources. DropShipping dealers save these expenses and can therefore often manage with a lower profit margin than their conventional colleagues.
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Targeted detection of products for eBay DropShipping
Drop-shipping trading, as we have shown so far, has many advantages, especially for newcomers to online trading. In combination with the expressly permitted sale via the online auction house eBay, the modern trading system presents itself as an attractive opportunity for founders and young entrepreneurs and quickly helps them to achieve their first successes in e-commerce.
However, the selection of suitable products, their target-oriented marketing and a permanent review of one’s own trading structures are decisive for this. With the following five tips, we want to provide helpful support especially for newcomers to online trading. You will learn how to use your time optimally for product research and the placement of your offers, how to track down current trends and novelties on the online markets, how to create the prerequisites for sustainable profitable trading by constantly checking your suppliers, how to ensure high product and service quality through your own controls and how to use drop shipping directories and databases to optimize your own trading model in the long term.
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Tip 1: Use the time saved sensibly for research and the optimal marketing of your products
As a DropShipping retailer, you save a lot of time compared to conventional vendors because you don’t have to worry about purchasing, storing or shipping products. Use the time saved and invest it consistently in researching suitable products, searching for optimal drop shipping suppliers, negotiating prices and conditions, providing exemplary customer service and marketing your products on eBay and in your own shop.
The choice of the DropShipping trading model pays off not only during the start-up phase of your company. Even during operation, you have time reserves at your disposal due to the reduced effort, which you can use sensibly to make your business model as successful and profitable as possible.
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Tip 2: Determine current demand reliably through customer opinions and Internet forums
Success in drop shipping via eBay depends above all on the selection of suitable products. These should be in as high a demand as possible and not yet offered excessively often by Germany’s largest online auction house. The Internet offers DropShipping dealers ideal conditions to inform themselves about new trends and directions on the markets. Especially recommended are customer opinions and special consumer forums.
Consumers do not only comment on their experiences with certain products, but also, through their comments, allow conclusions to be drawn about products in which there is a great deal of interest but which have so far been offered only rarely or not at all. DropShipping retailers can use such consumer opinions as inspiration for their own product ideas and thus specifically fill attractive market gaps with offers.
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Tip 3: Only regular review of your own trading structures ensures high profit margins
To ensure that the drop shipping trade on eBay is not only successful in the short term, but also develops into a permanently profitable business model, the company’s own purchasing and trading structures must be regularly reviewed and optimised. The main point here is that supposedly cheap suppliers are in many cases themselves only resellers of certain products. However, successful retailers should always purchase as close as possible to the original source of a product, i.e. from manufacturers, wholesalers or direct importers.
Anyone who unknowingly buys from an intermediary finances the profit margins of the intermediaries with his purchase price and is often not competitive with his own sales prices. So check regularly whether your suppliers buy the products themselves only from another dealer and try to get as close as possible to the actual origin of a product.
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Tip 4: Continuous quality control as a prerequisite for successful eBay trading via DropShipping
DropShipping dealers have only a limited influence on product quality. Since you as DropShipper do not come into physical contact with the products, you have to rely on the promises of your suppliers. Especially with regard to eBay trading, keep in mind that negative customer opinions always fall back on you and not on your suppliers. In addition to the actual product quality, pay particular attention to the punctuality of deliveries to your end customers, the condition of the goods shipped and the quality of the packaging.
As a DropShipping dealer, you should carry out regular test orders so that you do not have to rely exclusively on the promises made by your suppliers and the statements made by your customers. If you find that the quality and condition of the products or the quality of the packaging are not optimal, then you should contact your supplier and ask for improvement.
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Tip 5: DropShipping directories as a tool for the best possible purchase
The reliability and efficiency of the suppliers is decisive for the success of DropShipping concepts. Remember that your performance as an online retailer in this area can only be as good as the performance of the selected suppliers allow. In this respect, the selection and continuous monitoring of the affiliated supplier partners is always of particular importance.
If you don’t want to search for proven, reliable and efficient suppliers on your own, you can use the service of special DropShipping directories. As in the example of the https://ift.tt/2I4UF7D database, these only contain addresses and contact data of reputable suppliers who are already actively offering DropShipping to their customers and who have proven themselves on the market. Use DropShipping directories as a valuable source of information for setting up your own supplier network and benefit from the many long-term advantages of the modern DropShipping trading model.
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More success in online trading through optimal DropShipping products on eBay
In the previous article we introduced you to the possible combinations of DropShipping and trading on eBay. Both models are ideal for setting up your own trading company on the Internet and complement each other perfectly. While the DropShipping concept relieves prospective Internet merchants of the burden of high start-up costs and the great expense of their own warehouse and shipping logistics, the presence of products on eBay ensures that the offers of new merchants are also present on the Internet from the very first moment.
Despite all the advantages offered by the model presented, however, it should not be forgotten that online traders who are set up accordingly must invest time and energy in order to help their own business concept achieve sustainable success. Use free time reserves for researching trends, ideas and products. Determine the concrete demand on the market and check, among others via eBay, terapeak or baywotch, how strongly and at what prices and conditions certain products are already offered.
Check your own trading and above all purchasing structures regularly and carefully. Pay particular attention to whether you can purchase products from other suppliers more cheaply than from your current partners. Test existing suppliers for reliability and performance by placing test orders. A single test order at the beginning of the collaboration does not say anything about the long-term performance of a company. Not only determine suitable suppliers on your own, but also rely on special drop-shipping directories on the Internet. Here you will discover tested and proven DropShipping suppliers who will support you in the successful operation of your own company.
Selling via eBay or other marketplaces is simple, uncomplicated and secure. But also here it plays a role how your assortment is structured. We show you step by step in our guidebook, for which products DropShipping is unbeatable and explain to you how to make the most of your advantages.
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If you have decided to run your web shop partly or completely on the basis of DropShipping, then a basic concept with many clear advantages is available to you. However, DropShipping is also associated with one or the other limitation that you should definitely compensate for if you are interested in long-term success. In most cases, higher sales can help you manage the few disadvantages of DropShipping. The following guide will tell you which sales boosters are suitable for DropShipper.
Especially for DropShippers it depends on continuous optimization
There are very good reasons why you have decided to deal with the topic of DropShipping and to build your shop on the basis of this innovative and successful trading model. Compared to your classic competitors, you had almost no need for start-up capital, you benefit from low running costs, you can manage your Internet business all by yourself if you wish, and you enjoy a comparatively low workload.
But before you assume that you have discovered the patent recipe for effortless prosperity, you should also consider the less beneficial aspects of DropShipping. These are neither too serious nor insoluble. However, there is no doubt that they exist and should be actively managed.
A crucial factor in this context is the fact that in most cases you will buy more expensive than those of your competitors who do not work on the basis of DropShipping. Why is that? Well, the classic online retailer is forced to raise a lot of capital to buy a basic stock of goods from his suppliers. The associated high order volume within just one purchase transaction naturally means that wholesalers and manufacturers are willing to grant significant discounts on the purchase price.
As a DropShipper, on the other hand, you always purchase your products individually and also require your suppliers to ship them to your end customers on your behalf. In a word: Your negotiating position in purchasing is a little worse than that of your competitors.
Three methods to compensate for drop shipping deficits
You can only balance this out in three different ways. First, you could pass on the price disadvantage to your customers. This would inevitably lead to a slump in your sales, as you would simply no longer be cheap enough. Secondly, you could put the pistol on the chest of your suppliers and negotiate better prices with particularly hard bandages.
Especially as a newcomer to online trading, you don’t have a very good hand in this respect. And thirdly, you can simply increase your sales significantly and in this way ensure better sales and a decent profit. And it is precisely behind this strategy that the best solution lies.
Higher sales in your business simply mean more orders to generate. And since it’s your suppliers who are in charge of the workload for additional orders in drop shipping, you don’t have to worry about putting on too much work yourself.
By the way, this way you increase your turnover with every single supplier. And you can use this as an important argument for significantly better purchasing conditions in the second fiscal year at the latest. So you benefit twice from a clear sales booster at this point and should therefore not hesitate any longer to really ignite it now.
Strategic Tuning: Optimization makes the difference
If you want higher sales, then you have to change something in relation to your shop. A revenue booster always consists of an additional measure, a change in behaviour or another adjustment. As a DropShipper, you can choose from a wide range of different methods.
In the following, we present you with some of the best optimization options with which you can significantly increase sales in your DropShipping shop within a very short time and without a great deal of effort. Discover six independent strategies that you can use either individually or in combination to significantly increase your shop’s sales. Work through the individual concepts carefully one after the other.
The attached tips offer you valuable hints for the immediate implementation of what you have learned in your own shop. Now simply select the strategies that you particularly like and invest a little bit of work to realize them in your DropShipping shop. You will notice the effect very quickly and will certainly come back to the not yet implemented strategies on your own in order to implement them as well. We wish you every success in this respect.
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Strategy 1: Active assortment management
A stationary store that displays the same products in its shop window for weeks, months and years will be able to generate less and less sales over time. The situation is no different in online trading. Here, too, it is important to keep the assortment alive and to change it again and again. On the one hand, this way regular customers always have something new to discover and on the other hand, you make sure that your assortment is not outdated and always contains a certain proportion of innovative and new products.
In addition, by regularly working on the delivery program, you have the opportunity to constantly optimize the articles in your offer with regard to their sales frequency and their susceptibility to returns. Especially for DropShipping dealers it is very important to keep the number of returns as low as possible.
Our tip for you: Use your DropShipping suppliers not only as partners for product procurement and logistics. Let the manufacturers and suppliers also advise you on new and interesting products for your assortment. After all, the partners are experts in their respective product areas. And you should not miss this expertise.
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Strategy 2: Exciting content
An online shop lives from the fact that customers and regular customers always find good reasons to stay as often and as long as possible on the shop pages and survive by the fact that the visitors and prospective customers seize confidence to the offerer and thereby do not hesitate to make orders. Both goals can be achieved quickly, efficiently and convincingly with a single measure. This speech is about the use of high-quality content on your web pages. Interesting, exciting and relevant content makes your shop attractive on the one hand and offers convincing reasons for long shopping sessions and regular revisits on the other.
And on the other hand, professional content creates trust because it identifies you as an expert and focuses on your competence. A high-quality content is therefore absolutely irreplaceable at DropShipping-Shops today and the work on the content must not be neglected under any circumstances.
Our tip for you: Get inspiration in terms of new and interesting content for your shop quietly from other shops. You don’t have to reinvent the wheel in content marketing, but can calmly provide fresh impulses and suggestions by taking a few looks to the right and left. This is not a matter of illegally copying third-party content. They should only help your own creativity a little bit on the jumps.
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Strategy 3: Fresh design
Where do you personally prefer to shop, in a dusty shop that is already clearly outdated and in which no one cares about an appealing look or in a modern store where you can clearly see the lovingly designed hand of the owner and where new visual stimuli are set regularly? The answer is probably clear and you can rely on the fact that your customers and visitors will not be any different in this respect.
The customers of DropShipping shops also want a modern and contemporary shopping experience and determine by the visual characteristics of the shop whether they are dealing with a well-groomed, appealing and attractive offer or rather with a dusty supplier. For you as a DropShipper, there is no way around regularly dealing with the visuals of your presence on the Internet and adapting them again and again to the taste of the times and customer expectations.
Our tip for you: With regard to the concrete design of your shop, why not focus a little more on seasonal effects? Be inspired, for example, by the seasons or by certain holidays and festivities during the year. Even large sports events or similar events provide good ideas for refreshing the shop design. However, always concentrate on thematic aspects that are well suited to your product range.
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Strategy 4: Optimized user guidance
Many online merchants, at this point the DropShippers are really no exception, are not even aware of where and why they lose a significant part of their turnover. This is because gaps, errors and mishaps in the user guidance are very often responsible here and against this background, dealing with this so-called usability is really one of the most important things that one can and should deal with as a DropShipping dealer. The high art in this context actually consists in not disturbing the customer with his purchase if possible.
If incomprehensible processes, irritating statements, seemingly strange elements or impairments of the basis of trust cause a break in the shopping experience, then the result in most cases is an interruption of the process. A customer who has been lost in this way will, by the way, continue to avoid your shop in the future. To deal with user guidance is therefore also an important investment in the future.
Our tip for you: With regard to the user guidance in the shop, you and your employees will unfortunately become operationally blind in the course of time. Unfortunately, you no longer notice even smaller barriers and stumbling blocks, while your customers get stuck and often simply cancel a purchase because the user guidance is flawed. A good way to avoid this is to observe uninvolved test persons from time to time as you shop in your shop. In this way, you will quickly become aware of things that can be optimized.
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Strategy 5: Active sales promotion
As a DropShipping retailer, you really have a decisive advantage over your classic competitors. Since you do not have to deal with the complex and small-step processing of all incoming orders yourself, you have a lot of time left over that you can use to deal with important things. However, you should also do this if you want to give your DropShipping shop the ultimate revenue booster.
The key word in this context is marketing. Whether you draw your customers’ and visitors’ attention to yourself and your offers through an appealing newsletter, exciting and interesting content, a lively activity on the social networks, attractive discount and bonus campaigns or through activities in the field of customer loyalty is ultimately up to you. Doing nothing and just enjoying all the free time is not a good option if you want to work successfully.
Our tip for you: Which concrete forms of marketing and sales promotion work best for your customers depends above all on the concrete composition of your target group. Therefore, the planning of a marketing campaign should always begin with a careful definition of the target group. Find out what the most important characteristics of your target customers are and, over time, develop a reliable sense of which methods work best for your customers.
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Strategy 6: Conscious profit optimization
If as a DropShipping retailer you can say one day that you are a millionaire, you might think you have made it. In reality, however, the significance of this statement is very poor. It is quite possible that the turnover millionaire will have a high loss at the end of the day. Ultimately, it is always about the profit that you achieve as a result of your entrepreneurial work, and it is precisely this profit that you as the responsible entrepreneur should permanently optimise. There are several ways to do this.
On the one hand, you should try to keep all costs in the company as low as possible, especially the purchase costs of your products. On the other hand, it is important that you concentrate on selling items that can be used to make the best possible profits. And last but not least, it is also important for drop shipping dealers to remain disciplined with regard to spending and to make use of economical corporate management as a whole.
Our tip for you: Since it is ultimately not the turnover but the profit of your shop that counts, an essential basis of your work as an entrepreneur is to know at all times which factors in the company have an effect on profit and in what concrete way. To do this, analyze all operational processes and clearly visualize which aspects determine the profit and in what form. Being well informed will make it much easier for you to make the right decisions.
You now know some of the best revenue boosters for DropShipping. To keep your business on a firm and secure footing, you should also be familiar with the most important legal regulations. As for example with the new basic Regulation on data protection, that’s important to DropShipper.
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DropShipping is clearly one of those business concepts in which the partners you select are particularly important. In this case, these are mainly wholesalers and similar suppliers of goods. Only if the suppliers perform their services optimally and support you perfectly with your trading model, will you achieve maximum success as a DropShipper. Let us show you how to get to the right suppliers in a simple and safe way, find out what possibilities there are to put the partners through their paces and get to know the 10 most important rules when it comes to suppliers. In this way you will gain a stable advantage over your competitors.
DropShipping up-to-date: The best way to the optimal supplier
DropShipping offers you a fantastic opportunity to build your own e-commerce business model and benefit from a number of factors. This includes, of course, the chance to get by almost entirely without seed capital. While your classical working competitors have to invest a lot of money in the acquisition of your inventory, you can enrich your assortment with as many products as you want, without having to spend even one cent in advance.
You also save a lot of money by not needing your own warehouse and logistics. All in all, these aspects result in an excellent relationship between opportunities and risks and thus give your company very good prospects of success.
The prerequisite for this business model to run smoothly and profitably, however, is that you succeed in putting together an optimal pool of suppliers. The wholesale suppliers with whom you will be working on a permanent basis will have to take care of many responsible tasks for you. Your business will only be successful in the long run if you can rely on your partners and if they supply you with products of the highest quality.
Modern databases for the targeted search for wholesalers and suppliers
The point is for you to acquire a stock of vendors that fully meets the above criteria. Nowadays, the Internet offers us all fantastic opportunities for research and information retrieval. With the click of a mouse, you can contact any supplier around the world, without being restricted by national or continental borders. The immeasurable size of the World Wide Web also has a problematic effect. Your job today is to separate the wheat from the chaff and look for the best possible suppliers.
Platforms such as DropShipping.de can provide you with excellent support. Not for nothing do we operate the largest DropShipping database in the German-speaking world and would be happy to introduce you to thousands of suppliers and millions of products. This makes your daily work much easier and makes it much easier for you to find exactly those suppliers among the countless companies in the world with whom your cooperation is particularly simple, professional and reliable.
Discover partners and providers: trust is good, control is better
If, instead, you would rather become active on your own or if you would like to bring in your own suppliers in addition to using our database, then we recommend that you go to court with the suppliers very critically. Always remember that even a single negligent supplier can seriously jeopardize your business model. Don’t let it get this far and don’t rely on what potential partners promise you. Instead, be sure to conduct a rigorous review of all eligible candidates and take a particularly close look.
One thing must always be clear to you: a company can convey an impression of itself via a website that does not have to correspond to reality at all. Theoretically, it is possible for a single person at home to give the impression that you are dealing with a huge corporation with a very long company history. As a consequence, you need to take a closer look at each candidate if you really want to know who they are.
Here you should not only concern yourself with what the company writes about itself, but also inform yourself specifically on the net about what others say about the company. If, for example, it is a dubious provider, then sooner or later this will also be reflected on the Internet. Do not pay attention to every single negative comment, but concentrate on the accumulation of similar complaints.
Use anonymous test orders for checking
Before you consider working with us, you should always place one or two test orders. Remember not to give them up under your own name and of course not under the company name. Instead, ask neutral persons from your environment to place the orders. If you come from a small town or village, please make sure that the test order is placed from another location. Otherwise, the supplier might get the idea that you are behind the order and are trying harder to deliver than usual.
It is also worthwhile to check suppliers regularly in the course of long-term cooperation. In this way, you ensure sustained good performance, reliable service and stable revenues and profits.
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Find the perfect DropShipping wholesaler with these rules
Once you have researched and located a number of potential DropShipping dealers, it’s time to analyze and review their performance. Only after you have fully convinced yourself that the companies fully meet your requirements should you begin to actively offer their products. For the evaluation of future DropShipping dealers there are some rules, which have already proven themselves in practice. We present these to you in the following.
Rule one:
Prefer known vendors
All beginnings are difficult. This also applies to the entry into the DropShipping trading model. Make the selection of suppliers easier at the beginning and focus on companies that you already know, that are generally known or about which you have heard a lot of good things. In this way, you reduce the risk of gaining negative experiences with a provider, which would lead to a bad start to your self-employment for you.
With growing experience and motivation, you can later fall back on more difficult partners. In the beginning, we recommend restraint and a security strategy.
Rule two:
First of all, rely on German suppliers
At first glance, it may seem strange if we advise you to start your career as an independent DropShipping retailer with German partners. And yet, as you will soon see, this council has its justification. Providers from Germany speak your language, act against the background of German law and are familiar with local customs.
This will make it easier for you to get started in this area. You often get better conditions from foreign wholesalers. Nevertheless, we feel that you should first gain some experience in purchasing before turning to international suppliers.
Rule three:
Check the partners critically
In DropShipping it is one of your most important tasks to find the right partners and providers. But you should not believe everything the wholesale trade promises you. Paper is known to be just as patient as websites. You can be promised a lot without even thinking about it in the end.
For this reason, you should review suppliers that you shortlist critically and carefully. Use the Internet and research thoroughly about partners, which would come in principle into question. Usually you will discover weaknesses and limitations quite quickly and reliably in this way.
Rule four:
Always test the performance
In the daily business of DropShippers, customer satisfaction naturally plays an extremely important role. Only satisfied buyers will buy again in your shop. Anyone who is dissatisfied, on the other hand, will tend to turn to the competition for future purchases. That’s why it’s so important that the partners you choose are willing and able to deliver good performance.
The delivery speed plays a decisive role here. Therefore, you should check thoroughly with test orders how quickly the individual supplier ships and in what condition the goods arrive at the recipient before you decide to cooperate with a partner.
Rule five:
Optimize processing
As a DropShipping dealer, you benefit above all from the fact that you delegate many tasks to your partners. The vendors you work with store and ship the goods for you, so you don’t have to do any logistics or invest capital to purchase inventory.
Against this background, you should endeavour to develop optimal models for processing with the wholesale trade. Ideally, you should use a shop system that automatically forwards incoming orders to the respective supplier. In addition, it makes sense for your system to have immediate access to your suppliers’ inventory to show visitors and customers only products that are really available.
Rule six:
Negotiate optimal conditions
The conditions that you agree with the wholesaler ultimately determine the amount of profit that you can generate with DropShipping. For this reason, you should do everything in your power to achieve optimum conditions with your suppliers. Of course, this includes first of all the pure purchase price.
However, there are also items such as shipping and packaging costs. The terms of payment you are granted are also decisive for your profit. Define precise targets for each condition before you enter into a negotiation meeting and try to successfully enforce them with your partners and vendors in order to significantly improve your business position.
Rule 7:
Avoid minimum order quantities
With DropShipping it is always a matter of ordering your sales goods only at the moment one of your customers has made a purchase in your shop again. After all, you want to avoid taking risks with products and pre-financing them for your customers. Now, unfortunately, the wholesale trade likes to define so-called minimum order quantities.
With this, the suppliers want to prevent individual articles from being ordered from you that are associated with a great deal of effort within logistics. This is exactly where the requirements of such suppliers collide with the basic rules of DropShipping. With the DropShipping business model, you cannot afford to work with a provider that insists on a minimum purchase quantity.
Rule 8:
Arrange returns and warranties
In every business model, factors can be identified that prevent optimal economic development. In the area of drop shipping, returns in particular are among the incidents that lead to poor business results. Here you must take back goods from your customers, although these are usually no longer in a completely new condition.
You should absolutely agree with your suppliers what should happen concretely with such returns. In the event of warranty claims, it is also very important that you reach binding agreements with your partners. The goal should always be that as little effort and as little costs as possible arise on your side.
Rule nine:
Compare your conditions regularly
In online trading, the search for suppliers, their offers and prices can only be regarded as a snapshot. A single new entrant can ensure that prices fall or that the choice of products becomes significantly wider. As a DropShipper, you are dependent on being able to buy at particularly low prices and at the same time rely on the reliability of your partners.
For this reason, you should always carry out condition comparisons during ongoing business operations. Check whether new suppliers have appeared on the market and research their conditions. In this way, you can ensure that you always buy as cheaply as possible and thus generate the optimum profits.
Rule 10:
Rely on an optimal negotiation strategy
When it comes to obtaining the best possible conditions from the affiliated suppliers, a good negotiation strategy is already half the battle. It is important that you always know exactly what you want to achieve before a negotiation. Clearly define for yourself which conditions you are aiming for.
Don’t just think about the pure purchase price, but also include factors such as shipping and packaging costs or terms of payment. Define a limit above which you are not willing to do business with the provider. Stay realistic, however, and remember that you will need a replacement supplier immediately if you actually fail the negotiation.
You now know that selecting and evaluating manufacturers and wholesalers is a critical success factor in drop shipping. Learn more about our guidebook now “How to find the optimal supplier” to find out how the search for suppliers is guaranteed to be a success right from the start.
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The post Find a DropShipping Dealer: Eight rules for selection and evaluation appeared first on Drop It! Studio.
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The DropShipping trading model is still gaining ground in Germany. A glance at the current development proves this: More and more people in Germany, especially online merchants, founders and prospective Internet entrepreneurs, are interested in this alternative to conventional trade.
While the method, in which a trader himself never comes into physical contact with his goods for sale, was formerly known under the terms drop-shipping, direct trading or drop-shipping, the English term DropShipping has now become widely accepted.
Increasing spread of DropShipping in Germany
DropShipping in Germany is a trend on the one hand and an insider tip on the other. But how do these two statements, which at first glance seem completely contradictory, actually fit together? Well, the explanation is actually very simple. A precise analysis of the search volume clearly shows that the potential of drop shipping in Germany is constantly increasing.
The search for this term is becoming more frequent and the cause is a growing interest. The search term is so interesting because corresponding search terms are not accidentally entered by end customers. Such an evaluation therefore always automatically shows the current trend in the professional environment.
However, despite the increasing demand for drop shipping, it can still be observed that many prospective traders ultimately found their companies in the classic way and not on the basis of drop shipping. This is exactly where DropShipping in Germany has a very interesting chance.
Since this business model gives you a clear advantage over your competitors, the right decision can create optimal starting conditions. The rapidly growing number of DropShipping Wholesaler in Germany has also long since ensured that direct trading can hold its own against conventional sales in many trading sectors.
Any prospective entrepreneur who decides in favour of the DropShipping concept will certainly not regret this. The benefits are so clear and unambiguous and play so directly into the financial realm that they should not be overlooked. The fact that the majority of dealers pushing into the markets have not yet decided in favour of drop shipping has had a particularly positive effect here.
This distribution automatically ensures that you can as DropShipper can take advantage of advantages that the majority of the founders are still denied. But don’t hesitate too long, because it’s only a matter of time until the trend DropShipping Germany becomes so strong that it finds more imitators. So secure your early-starter bonus now and don’t put your personal start on the back burner with DropShipping.
Google confirmed: Germany searches for DropShipping
At the end of 2006, Google recorded the first search queries for the terms “DropShipping” and “Drop Shipping” in Germany. Since 2007, the number of monthly searches based on the two terms has risen continuously. A preliminary highlight emerged in July 2010. For this month Google recorded a search volume of more than 7,000 search entries. The trend then moved largely sideways, with some small fluctuations, before reaching a new all-time high in January 2018.
Interesting in this context: If one analyses the trend results for drop shipping in Germany according to their regional distribution, Hamburg, Saxony, Bavaria, Berlin and North Rhine-Westphalia are far ahead. These are regions that are usually characterised by strong start-up activity anyway. A glance at the KfW Start-up Monitor 2016 shows that the city states of Berlin and Hamburg have the highest start-up rate, followed by Hesse and Bremen, followed by the Flächenstaaten. North Rhine-Westphalia, Bavaria and Lower Saxony.
Besides entering “DropShipping” and “Drop Shipping”, Google Statistics is dominated by the search phrases “Provider DropShipping”, “Wholesaler DropShipping”, “DropShipping eBay” and “DropShipping Shop”. This is a clear sign that it is above all founders and Internet entrepreneurs who are at work here who are interested in supplementing their existing or planned business concept with retail via drop shipping.
Interest in DropShipping continues to grow in Germany
This trend is understandable and comprehensible. Finally, there are many good reasons for online retailers to replace conventional trading with a drop shipping model:
A foundation as DropShipper requires significantly less start-up capital than taking up self-employment in traditional online trading. Since the sales assortment is not purchased in advance but instead remains with the respective supplier, there are no procurement costs that have to be financed. In addition, drop shipping eliminates the so-called commodity risk.
If a conventionally working retailer finds that parts of his assortment cannot be sold well, then he remains sitting on the corresponding inventory or has to sell it at poor conditions by selling residual items. The DropShipping retailer simply removes “badly spinning” products from his assortment. Economic disadvantages do not accrue to him from this.
DropShipping is also clearly superior in terms of running costs. The retailer does not need an expensive warehouse or expensive logistics personnel. The elimination of storage and shipping logistics means that direct trading is also less time-consuming. In this respect, drop shipping is also suitable if self-employment is initially to be taken up as a sideline. In the later course of the process, the dealer then has considerably more time for his essential tasks: The support of prospective customers and customers and the announcement of his shop and his offers.
However, DropShipping places very high demands on the suppliers involved. Manufacturers, wholesalers and importers who are ready to ship on routes must not only be tracked down, but also thoroughly tested.
Germany’s market leader profits from development
DropShipping in Germany is a great trend. As the market leader and provider of Germany’s largest drop shipping database, we feel this every day. On the one hand, interest in this trading model is growing steadily. We can see this directly from the number of visitors and the registrations. In addition, the number of enquiries and other letters is constantly increasing, so there can be no doubt that this issue is becoming more and more important.
The increasing demand in turn puts us in a position to continuously develop our platform further. You can feel this directly in the number of DropShipping suppliers and DropShipping products we have ready for you. Did you already know that we now have over 700 manufacturers and wholesalers in our system who are ready to supply you on the basis of DropShipping? In total, more than 4.2 million different products for your own product ranges are available to you in this way. You can start a lot with that, as you can imagine.
And that’s not all. After all, DropShipping.com not only offers you access to the largest German DropShipping database. We can also help you directly with our market analysis tool, which supports you in researching particularly popular and sought-after articles, which you can then sell directly and successfully. Besides we make you with DropShipping Shop Systems which is specially designed for the Needs of DropShipping Dealers and which make your daily work much easier.
As you can see, DropShipping Germany is one of the big trends that you should not miss if you are thinking about entering the world of e-commerce at the moment. It would certainly not be easier, safer and more pleasant to set up your own business in the field of online trading. So don’t hesitate any longer and make your own personal decision for the DropShipping trading model now. The trend is so clear and unambiguous that there could hardly be a better time to start.
DropShipping in Germany: Don’t miss the boat now
DropShipping is much more than just a temporary trend in online trading. For the first time, the trading model also enables people who were previously excluded from self-employment due to a lack of capital or critical framework conditions to set up and successfully operate their own online trading company. If you want to start your own online business with little starting capital, part-time or initially from your home or apartment, DropShipping is the ideal solution for you.
But the integration of DropShipping is also more than interesting for entrepreneurs who already successfully manage their online business. Here, too, the reduced capital commitment, the reduced space requirement in the warehouse and the relief in terms of logistics and dispatch have had a consistently positive effect.
Financial and time resources are spared and the entrepreneur has sufficient time to take care of assortment maintenance, customer care and shop marketing. If you are looking for sustainable success and an advantageous market position in online trading, you should start to deal with DropShipping at the latest now in order to profit from many positive effects and not miss out on the competition.
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How to get the most out of DropShipping in Germany
DropShipping in Germany combines the advantages of an ingenious business model with those of an outstanding business location. If you, as a DropShipper, decide to operate your business in Germany, you will find very advantageous conditions and prerequisites.
The following tips and advice will help you make the most of this potential and really get the most out of your future independence. Take a look at the five well thought-out pieces of advice in turn and choose the ones that best suit you and your ideas.
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Active engagement with the business model DropShipping
Many people are inspired by the idea of becoming self-employed. Nowadays it is quite obvious to think about online trading in this context. On the one hand, this offers steady growth and, on the other hand, is associated with very low entry barriers. It is true that the growth rates in online trading are no longer quite as high as in the early years.
Nevertheless, the annual increases are sufficient to provide an excellent forecast. And in terms of accessibility, e-commerce is simply unbeatable. You don’t need much more than a PC for this and there are no requirements with regard to certain professional qualifications.
It is still astonishing why the DropShipping trading model is not yet used by the majority of founders in Germany. This can only be due to the fact that many founders and prospective entrepreneurs in this country have not yet sufficiently dealt with the topic. If you are also interested in setting up your own Internet company, then you should let yourself be infected by the trend DropShipping-Germany and deal very intensively with this business model. It maximizes the benefits that are already associated with online trading significantly and provides you with an optimal foundation for long-term high sales and profits.
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The advantages of DropShipping always clearly in front of your eyes
DropShipping in Germany is of the greatest interest to any budding entrepreneur in the field of online trading. This is mainly due to the immense advantages associated with this business model. It is well worthwhile to clearly consider these advantages and their respective potential before you actually start your own business. Such an awareness gives strength and self-confidence to the founder and is able to give new courage and strength in times of decreasing motivation or in case of doubt.
The most important advantage of DropShipping in Germany concerns the financing of the own company. In Germany, it has become quite difficult for founders to have a start-up project financed by a house bank. Whoever decides in favour of DropShipping needs virtually no seed capital and can therefore dispense with costly financing. A further advantage concerns running costs and expenses.
Anyone who wants to implement drop shipping in Germany suffers above all from high space and wage costs. As a DropShipper you do not need a warehouse or the appropriate personnel and you can also become active from your own four walls, DropShipping offers further advantages. And last but not least, founders benefit from an excellent relationship between opportunities and risks that only the DropShipping retail concept can achieve in this form.
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Develop solutions for critical areas at an early stage
Everyone knows that where there’s light, there’s shadow. Of course, this also applies to the DropShipping area. We have already explained a whole series of resounding advantages, which primarily benefit founders in Germany on the basis of DropShipping. But of course there are also some weaknesses or risks. Experience clearly shows: Those who adjust to such disadvantages early enough and develop the appropriate solutions can benefit even more from DropShipping.
We would like to use a small example to illustrate what is meant by this. As a DropShipping retailer, you sometimes don’t get the same conditions from suppliers as you do from a conventional online retailer. After all, he buys his goods in advance and invests correspondingly high amounts with his suppliers. In return, he may receive discounts which you as a DropShipper cannot use for the time being.
If you are aware of this, you can adjust to it and take countermeasures. For example, you can change your profit calculation, lower your sales prices a little, focus more on high-margin products, or negotiate hard with your suppliers. Such possible solutions can be developed for any drop-shipping problem. They help you to run your business profitably in the long term.
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Carefully and thoroughly plan technical integration
DropShipping is a trading model that many people associate primarily with the Internet. After all, trading in products on the World Wide Web fulfils a very essential prerequisite for this form of trading. Online sales ensure that the customer does not immediately take a purchased product with him, but that it is sent to him instead. And it is precisely this circumstance that creates the gap in which drop shipping can be realized. Whether the customer receives his goods directly from you, or at the same speed from your supplier, makes no perceptible difference to him. And this is exactly the phenomenon you use when you choose DropShipping.
You will benefit in particular if the necessary communication between you and your suppliers runs as automatically as possible. With many orders it will soon be very laborious for you to inform your manufacturers and wholesalers each time individually and manually. It would be very practical if your shop system would always automatically inform the relevant supplier. And that’s not all.
An intelligent system would also be able to automatically query the stock levels of your suppliers and, depending on this, automatically decide whether a product should be displayed in your shop or not. The good news: There are such shop systems and as a DropShipping retailer you can benefit greatly if you choose such a system.
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Combinations of drop shipping and classic trading make sense
You don’t always have to put all your eggs in one basket. Sometimes it can be very useful to mix different elements or strategies artistically with each other. This also applies to the combination of drop shipping and classic online trading. Both can even be combined within a single shop. For visitors and buyers it is irrelevant whether they choose a drop shipping product or a regular article. In the optimal case, this makes no difference in terms of delivery performance.
Combined trading via drop shipping and classic trading is particularly suitable for those entrepreneurs who already operate a web shop on a conventional basis. It wouldn’t make sense to completely disable it because of a change to DropShipping. Instead, you can start by replacing parts of the assortment with drop shipping products over time. In this way, it is particularly easy to compare the two methods and to perceive the advantages of drop shipping even more clearly.
It is not necessary to choose one of the two systems. Of course, new founders can also decide to opt for such a combination from the outset. In this way, the advantages of DropShipping can be realized in a targeted manner, while the own product range can be extended by products that cannot be purchased from a DropShipping supplier.
If you opt for DropShipping, you get excellent growth prospects directly in addition. But what possibilities are there to make this trading model even better? We provide 6 proven success tips for ambitious retailers which put your company in the fast lane.
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Success in drop shipping is not a question of luck or chance. First and foremost, it is important to do as much right as possible and as little wrong as possible in relation to your own business model. So it is up to you whether your own shop works well on the basis of DropShipping and runs successfully in the long run. We introduce you to the most important factors that influence the success of DropShippers. We clarify the background and provide you with a total of 6 professional tips, which you can immediately implement in your own shop.
DropShipping alone is not a business idea
If you are just about to start your own business as a DropShipper, there is one thing you should keep in mind: DropShipping alone is not a business idea. By opting for this trading model, you merely define the external framework of your future activities. Two things are hereby defined: First, you intend to earn your money by selling products on the Internet and second, you choose the concept of DropShipping. However, a few things are still missing to turn these two pillars of your independence into a real business idea.
A business idea describes concretely how you want to earn your money with an independent concept. Imagine a friend or acquaintance who, with regard to his or her own plans, would only entrust you with the task of working independently as a craftsman in the future. On your side there would be still many questions open: In which trade should the activity take place? Is there a specialization? Where will the company be opened and where will employees be employed?
These and similar questions are now going through your mind. With regard to your own business, you must also be able to answer such questions. The description of a business idea must show an outsider within a few sentences how you imagine your independence concretely.
These 5 factors define your concept as DropShipper
Let’s summarize what’s already established: You want to trade products on the Internet and you want to do this as a DropShipper. What you must at least define now is the concrete design of your assortment. Which articles do you want to offer to your customers? In addition, you should also describe who you actually imagine to be your customer. Work with categories and define for example age, gender, income and interests. Once you’ve come this far, all you need to do is define the reasons why the target group you’re targeting should shop in your shop in the future. This is called strategic positioning.
;”>You then described the industry in which you would like to set up your own business (e-commerce), which processing model you have in mind (DropShipping), which products you would like to offer (assortment), which customers are to buy from you (target audience) and for which reasons you should decide on your offers (strategic positioning). These five factors together form your business idea.
The focus for the DropShipper must be on the suppliers.
There are excellent reasons for choosing the DropShipping retail concept. As a DropShipper you benefit from a variety of advantages and discounts. Some of them may have been the reason why you chose a career as a DropShipper.
You probably liked the fact that DropShipper almost doesn’t need any seed capital to build your business. Even the low running costs have certainly met with your approval. And the fact that as a DropShipper you have considerably more time at your disposal than is the case with a classic dealer certainly didn’t bother you very much.
Now it is the case that every advantage in the business area has its own individual price. As a DropShipper this price consists mainly of the fact that you need really good suppliers. Now one could say that good suppliers are also an important prerequisite for success for the classic online retailer. This is correct in any case. However, you assign significantly more tasks to the supplier. Everything that relieves you so much as a DropShipper, you burden the manufacturers and wholesalers with whom you will work. In principle, this is not a problem. After all, your suppliers voluntarily choose to work with you as a DropShipper.
Errors of your DropShipping suppliers fall back on you
However, the situation is that your suppliers need to be particularly reliable and professional. It is important that you can always rely on the performance of the selected manufacturers and wholesalers. After all, any misconduct or omission always falls back on you and harms your business model in the medium term.
As a consequence, you as a DropShipper will have to make a special effort to select the best suppliers for your business model. If you fail to do so, you will quickly face negative consequences. Carefully select suitable candidates and thoroughly review the companies before deciding to work with them.
Among other things, you should also carry out one or two test orders in order to experience first-hand how the potential business partners really work. Even during the cooperation, you should not refrain from checking the manufacturers and wholesalers again and again and bringing up errors immediately. And last but not least, it is worthwhile to negotiate the conditions with the suppliers constantly and regularly.
DropShippers can significantly increase the potential of the trading model
We have already examined some areas in which your planning and work as a DropShipper is important. The development of a viable business idea and the selection and management of the suppliers involved have been particularly important so far. If you take these two points into account, then you are clearly on the right track. However, there are a few more things you can do to help your success as a DropShipper on its feet.
On the one hand, we would like to clearly recommend at this point that you draw up a business plan. This is a classic planning instrument with which almost every responsible founder and entrepreneur works. The business plan simulates your business development over a certain period of time. In most cases, a term of three years is assumed. In the business plan, you first enter all the revenues that you can expect to generate.
In a second step, you compile the costs that these revenues will have to bear. You have to work very hard so that you don’t forget any important expenses. Here, for example, there are the costs for the purchase of your merchandise, space and personnel costs, charges, fees and contributions, costs from contracts and agreements or even taxes.
Online marketing is the adjusting screw for DropShippers
If you now compare the income with the expenses, then you can see at a glance whether your company would make profits or generate losses according to the current state of knowledge. If you don’t like the results yet, you can simulate what needs to change to make the bottom line better. You see: The business plan gives you a glimpse into the future and gives you a lot of security.
In addition, you should also deal with the topic of online marketing at an early stage. With your activities in this area, you determine how advantageously your business will develop. There are many things you can do to attract more potential customers to your site, or to really get visitors to your site to make a purchase. Further instruments help you to increase the shopping basket value significantly or to generate one-time buyers in a clever way to regular customers. Online marketing is like an adjusting screw or a regulator that you use to adjust how your sales develop. Those who do without this give away considerable potential.
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With these 6 tips you will become a successful DropShipper
In order to make online trading a complete success as a DropShipper, you should strictly follow a few recommendations. While the benefits for DropShipper and their DropShipping companies are clear with low entry barriers, virtually no capital requirements and little knowledge of online trading, there are also challenges for DropShipper, especially in selecting and negotiating with appropriate DropShipping suppliers. In the following six practical tips we have summarized the most important information for you.
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First analyze, then implement
As a DropShipper you have countless products from numerous suppliers at your disposal, which you can include in your assortment. Even if there is a great temptation to expand your product range to thousands of items, you should still carefully design and plan your sales area in advance. This is not possible without a thorough analysis of markets, consumer preferences, demand and supply. Use the Internet for research around your preferred product area and limit your selection of articles to those which you consider to have good sales opportunities and a high attractiveness for the visitors of your shop.
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Supplier selection is the be-all and end-all
The perception of your efficiency by the customers of your online shop depends essentially on the reliability and seriousness of your suppliers. If goods arrive too late or in a bad condition at your customers, then this does not fall back on the supplier but on you as DropShipper. So take plenty of time to select your future partners. Convince yourself in a personal conversation of the competence and professionalism of your suppliers and test their performance with several test orders before you include their products in your own range.
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Trust is good, control is better
Once you have gained a positive impression of a supplier, you should not blindly rely on it to stay that way. Remember, new brooms sweep well. Perhaps at the beginning of the cooperation the company took special care with your orders and the reliability decreases with time without you noticing it immediately. Take criticism and complaints from your customers seriously and always get to the bottom of the causes.
Check your suppliers regularly with test orders also during the cooperation and do not miss to have a personal conversation with your partners from time to time. This not only strengthens your willingness to cooperate, but also gives you as a DropShipper the opportunity to regularly renegotiate your purchase prices.
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Regular renegotiations for maximum profits
In addition to a careful selection of suppliers and their regular monitoring with regard to delivery reliability and product quality, as a DropShipping dealer you should also regularly renegotiate the conditions with the affiliated partners. Keep in mind that any additional percentage discount granted to you by your supplier will immediately end up in your own pocket and increase your profits. There are plenty of occasions for subsequent negotiations.
If, for example, your turnover with a manufacturer, wholesaler or importer develops better than expected, then this offers an ideal opportunity to actively approach the partner for a higher discount on purchase prices. The same applies if the situation on the market changes or if potential competitors of your supplier appear. Re-negotiations do not necessarily have to relate to the pure purchase price. As a DropShipper you can also negotiate shipping and handling charges or other fees. The existing conditions for returns, complaints or warranty cases also form a useful field for negotiations and should not remain unused.
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Consistent use of marketing opportunities
Trading via DropShipping allows you as an online retailer to concentrate fully on selling your products and promoting your shop. While conventionally acting companies have to deal with topics such as warehouse management and shipping logistics, as a DropShipper you have the time and opportunity to deal comprehensively with the optimal marketing for your company. Take advantage of this potential and make use of the modern possibilities of online marketing. This starts with the optimization of your pages and offers for the search engines. Even if it is practical to take product descriptions directly from your suppliers, you should consider that you can only achieve an excellent position in the search engines if you are represented with your own texts and descriptions, which must be matched to your preferred search terms.
Social marketing should not be neglected either. Facebook, Twitter and other social networks offer online merchants excellent opportunities to present their shop and products to a wide audience. Take advantage of this potential and ensure sustainable, stable and high sales with a strategically planned advertising and marketing concept.
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Self-confidently occupy market niches
As a DropShipping dealer, you can offer products with comparatively little effort from which conventionally working salespeople prefer to stay away. This applies in particular to goods which, due to their bulkiness, size or weight, require a great deal of logistical effort. Due to the problematic handling of such products, there are often lucrative market niches that you can optimally occupy. Examples of such products are carports, household appliances, whirlpools, bathtubs, garden sheds, furniture, kitchen equipment or bulky products for the garden and outdoors.
Manufacturers, wholesalers or importers who deal with such products are usually used to delivering their goods directly to the end consumer anyway. Against this background, it is comparatively easy to convince providers of a drop shipping model. Use your preferred position as DropShipper to deal with the sale of products that are uninteresting for your competitors due to the difficult handling and confidently occupy attractive market niches.
Did you like our six carefully selected practical tips for a more successful DropShipping? Then you will be interested to know that we have another guidebook ready for you, in which we will provide you with a total of 8 Rules for selection and evaluation from suitable DropShipping suppliers.
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The post DropShipper – Practical Tips for Success with DropShipping appeared first on Drop It! Studio.
Via https://dropit.studio/business/dropshipper-practical-tips-for-success-with-dropshipping/
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