Matthew Watts

Looking to sell products online but don’t like to keep inventory, invest a lot of money to test out the viability of a new niche, or have to deal with the hassle of shipping products yourself? Dropshipping is for you.

Dropshipping is nothing new in the business world, or online. However, over the last couple of years it’s really taken off since Internet Marketers have been diversifying their income with all the crazy regulations that they’ve started getting hit with that killed off the revenue streams they were using to make money.

Why is Dropshipping the future?

• Zero Inventory
• Complete Customization
• Scalability

Zero Inventory

With traditional eCommerce models, there’s a large amount of overhead. You have to set up a store, physical or online, and maintain a warehouse for the products in that store. That’s fine for physical retailers that also have an online presence. It’s bad for everyone else that are just starting their online ventures to diversify their income.

Sure, you could come close with using a fulfillment center to manage your warehouse and ship out your orders, Amazon offers this service. You still have the problem with having to order a set quantity in order to purchase at wholesale prices. This is where using a dropshipper allows you to gain an advantage.

By using a dropshipper to dropship your products to customers, you have nearly $0 overhead in trying a new market out with a few items before investing more resources into it. You only pay when someone buys a product.

Complete Customization

This is what appeals to me with dropshipping. You have complete control over the order process. That’s something you don’t have with other online endeavours, such as affiliate marketing where you don’t get to see how the visitor progressed through the site before converting. For all you know, the advertiser you were promoting could have shaved a fair amount of your earnings and get away with it by saying they didn’t convert.

So, once you find a supplier you want to use for a certain product line, you pull their product feed with picture, description, pricing, etc. and can use it in a shopping cart like Magento, a WordPress blog, or your own custom installation; tweak all the on-site optimization, and know exactly how the user’s experience is going.

It’s not all having your cake and eating it too. There are some drawbacks – such as having to manually source and define terms before using the dropshipper. Fortunately, there are many online directories that keep a list of them. Two major ones are Worldwide Brands and GoGo Dropship.

Each of those directories comes with a fee to view the contact information. Worldwide Brands costs a lifetime membership fee of about $300, and GoGo Dropship’s is over $800 for a lifetime fee, but you can pay monthly or yearly depending on how often you’re wanting to source suppliers. One distinguishing feature I like about GoGo Dropship is that you can have them source suppliers for you if you can’t find any in their directory for the particular niche you want.

Scalability

This is another selling point that I think a lot of Internet Marketers are loving once they realize the full potential of using a Dropshipper to run an eCommerce site: it scales far more in many different verticals and horizontals.

Once you have the site up and running, your main maintenance is contacting the dropshipper each morning, paying them, and having them send out the products. Depending on how involved you want to get with your customers, you could add phone support and accept returns. Still, you could be running a few different eCommerce sites yourself before having to hire someone.

Once your site gets big enough, hire some people to manage the sites, build more, and keep growing. Unlike affiliate marketing, you don’t have to rely on others to pay you. You’ve already got the money. If your supplier bails on you, there are usually several others in your niche. Your entire revenue stream isn’t dependent on a few potential offers to place on your website.

In addition to that, you can bring in affiliates to promote your store and get extra traffic. Sign up with Commission Junction or some other major CPA network and they can handle the distribution of fees for you and help you integrate it with your store if you don’t want to mess with managing affiliates yourself.

If it all gets too much for you, you can easily sell the site off on Flippa. More people are willing to take over an eCommerce site than other revenue models because they are easier to understand and maintain.

Final Thoughts

There’s a lot that goes into setting up a site to dropship with and Eli over at BlueHatSEO covers it really well in his The Real Secrets to E-Commerce post. The main thing is, get organized and get off your butt and make it happen.

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