I will discuss below the Drop shipping business model and how it works. If you start from scratch, quickly results can already become visible. After half a year you can see significant results!
Firstly, before I go into details How to do it, let’s bring forward the definition of Drop Shipping:
“Drop shipping is a retail fulfillment method in which the retailer does not keep goods in stock but instead directly transfers customer orders and shipment details to either the manufacturer, another retailer or a wholesaler who then ships the goods directly to the customer ”
What is the advantage of Drop shipping in comparison to the “standard way of eCommerce”:
The biggest advantage pro drop shipping, is that the drop shipper does not (own) any stock. Instead, the merchant purchases inventory as needed from a third party, this can be a wholesaler or manufacturer, to fulfill orders. So:
- Drop shippers often don’t own the warehouse, but the inventory is at the supplier.
- Drop shippers don’t owning a logistic process, but the supplier takes care of the logistics.
- A broad product offering: instantly able to offer a wide variety of products on your web shop.
- Quick time to market: be able to instantly start selling drop shipping products.
Why start with dropshipping?
This is exactly as your questions is… ‘with only your laptop…’. It has Low start up costs and can easily scaled up! Since you don't have to hold inventory, the start up investment is low.
Of course, as in any other business, it’s not super easy and there is a lot of work to be done including the necessary headaches… This is step by step procedure to take in order to start drop shipping:
1. Choose a product to sell
Firstly, decide what products to sell. There are many variables that should be considered before deciding on a product to sell. To get inspiration, you can just go to a standard shopping mall or building materials market, visit an industry park and see what kind of factories there are..
2. Locate a supplier who will drop ship for you
Find a supplier through your network, and preferably in your neighborhood. Or just visit the local trade fairs and go hunting for the perferct products!
3. Set up a webshop, drop shipping account and organize with the Supplier
You can set up drop ship accounts on several providers (Shopify, etc). Also you can promote your own webshop (if you can arrange low cost webdesign, this however is not the priority). Then contact the company that can supply the products and set up a reseller account and sign an agreement with them. I always used this professional Drop Shipping Agreement.
4. Sell and advertise on online markets such as eBay webshop, etc
If you do all this correct with the correct calculated margin, then the more leads you generate, the higher your chances are that you find buyers and get commissions.
5. The Product Sells
Great news: your first products are sold and your customer pays you with a paypal instant payment. We highly recommend to use instant payment methods, such as Paypal or Alipay. This allows the customer to pay you faster, which lets you place the order with the dropshipper faster, which gets the product to your customer faster.
6. The Order With The Dropshipper
After your customer has paid you, you should contact the dropshipper immediately to order the product on your customer’s behalf. The dropshipper then ships the order to your customer under your name.
7. Follow up after the sale
This is where many new e-business people drop the ball. Just because your customer has paid you and you’ve placed the order with the dropshipper does not mean that you are out of the loop. Quite the contrary, if there are problems with the order you are the one that will be held responsible in the eyes of your customer be proactive in your customer relations. Follow up with your customer to let them know that the item has been shipped. And offer them personal contactt in case of problems, it’s good to let the manufacturer handle it, and forward a personal contact information to the client, or let the manufacturer contact the client directly.
How to set up a drop shipping strategy!
Follow the Drop Shipping Strategy Model
The ideal supplier to cooperate with?
The ideal supplier to partner with:
- Needs to be reliable and needs to produce quality products;
- That don’t have a lot of business online yet;
- They have to be open for innovative ways to do his business, and wants to outsource this online marketing tasks to you, and who will not try too;
- When your supplier has your products on stock;
- Then need be ready for growth for his company;
- They are able to ship goods worldwide (much bigger market);
- Needs to ship your product frequently, and max. once a week. This is important, because your customers wants to receive the products as soon as possible;
- Has a showroom to show its products;
- Can provide customer support for you, when you receive questions from customers;
- Can pay your commission on a frequent basis.
Hope this information finds you well!
Want to learn more you can check out this blog: The Drop Shipping Expert guide – Business templates blog