PMI Home Business

Drop shipping is a business model that allows you to sell physical products to end customers without shipping the products yourself. Drop shipping is great but not easy. There is a light but existing entry barrier that keeps most “get rich quick” folks out of it.

The drop ship business requires more work and dedication than throwing a blog or affiliate store. Its advantages are:

• Lower competition.
• You set your own profit margins.
• Buyers don’t get redirected to some other site. They buy from you and remain your customers.
• It’s a long-term business model.

Here is what it takes to start drop ship business from home:

1. Discover a niche You need your small and focused place in the market to succeed. There are hundreds of books and blog posts about discovering niche for your new website. The process for drop shipping is the same. You only need to focus on product niches. You are not interested in people who want to know how to take photos of butterflies – unless you have special butterfly camera to sell them.
2. Find suppliers Finding just any supplier is easy. The challenge is to find suppliers who will want to work with a small one-person business and at the same time have good prices and reliable delivery. There are several reliable (paid) directories online which list checked and proven drop ship suppliers. There are thousands of free or paid directories offering outdated or simply fake lists. You can also try to do the hard work and search yourself, contact suppliers, one by one, ask for quotes and whether they will work with you. Whatever you choose, don’t neglect this process. The reliability of your suppliers will make or break your business.
3. Build a store Many drop-shippers sell on eBay. It’s a great platform and certainly cheap way to reach buyers. It’s also a cut-throat place where buyers look for lowest prices and there are always sellers to offer them. It’s fine to sell on eBay, just don’t consider it the only place to run your business. You need to build your own web store. If your budget is low, start with WordPress and e-commerce plugin or open source shopping cart software. If you can afford custom development and design, definitely go with it. Your store will convert better if it doesn’t look like some quickly set up site with a free e-commerce script. At the very minimum you do need a domain name, your own custom logo and premium theme for your store.
4. Promote your store You need to build traffic to your web store. You can work hard on SEO and link building or you can pay for visitors and hope to convert them. The first method is long and slow, the second is quick and expensive. Usually you’ll have to mix both to succeed. Don’t forget also the new channels – Facebook and Twitter can turn into great sources for targeted traffic and great platforms to socially interact with your customers.
5. Follow up with your customers It’s several times easier to sell to someone who have already bought from you once than to a stranger. So make sure your customers are happy with their purchases. Follow up and ask them. Insert their emails in a newsletter and send them useful information and hot deals once in a while. Give them reasons to come back and buy again. If you care for your existing customers you may soon reach the point where you don’t need more traffic to your store. Old customers will buy again and again and new clients will come through the word of mouth. Think long-term.

Author byline: If you want to start with drop-shipping, make sure you can find good suppliers. And if you have money on hand maybe you’d prefer to buy an established drop ship store rather than building one from scratch.

Filed under: PMI by Guest Post on Wednesday, June 15, 2011