When operating an online retail business, whether through your own website, or an auction site like Ebay, you can either buy products up front to sell, or use dropshipping services instead. Choosing the best products to dropship is important if you decide to dropship and your online retail business is going to be successful.
First of all, there are several advantages to using using dropship suppliers rather than other wholesale retailers:
Buying your own products to sell means that you need space to store them until they sell, as well as putting your own money into products that you don't yet know whether you will be able to shift. However, if you use a wholesale supplier who offers a dropshipping service, you only need to order the goods once you have received payment from the customer yourself.
Dropship suppliers ship products directly to the customer with your business details attached. Any returns get sent back to the original supplier, so you need never actually come into contact with the goods you are selling.
Dropship companies don't usually have a minimum order, so you only need to pay for goods you already have orders for. This can be important if you don't have a lot of start up capital. It saves you spending money on goods you can't sell too.
These factors all make dropshipping a great way to begin an online retailing business. There is generally no minimum order with dropship suppliers, although the profit margin is generally smaller than with wholesalers who take upfront payment.
Choosing the Best Products to Dropship:
Finding a niche product to sell through your online dropship retailing business is a good idea. Many customers buy ordinary goods from traditional stores and will not necessarily be looking for them online. Large items, too, are not often a good idea for dropshipping enterprises due to the shipping costs involved.
Brainstorm with friends to think of niche products that you might be able to sell successfully online. Ask them what things they buy over the internet. If you'd rather sell more popular items and try to undercut competitors, you can do research online. Look on Ebay at customer's wish lists, for instance. This will help give you ideas for what products to dropship.
Once you have selected some possible products, research which dropshippers supply them and what profit margin you will make on each sale. Work out the shipping charges you will need to add to the price for each item, and consider any tax you will have to pay on profits. This will help you decide whether it is worthwhile selling a particular type of product from any individual dropship company. Availability and potential mark-up on the products are the most important factors in helping you choose which of the selected items to market.
Until you establish a good reputation as an online retailer, it is best not to sell products that cost too much. Most people prefer to buy expensive items in person and are unlikely to trust an unknown online seller with large amounts of money. Start by dropshipping smaller priced products that cost from a few dollars to perhaps just over one hundred.
Once you have established a faithful customer base, you can offer more expensive products. You could, however, try offering one or two more highly priced items early on. One great advantage of dropshipping is that, if you don't sell anything, you haven't lost anything except any advertising costs involved.
Research dropship suppliers that you are thinking of using through online discussion forums. Many supposed dropship companies are not legitimate and you can easily be scammed. A website may offer dropshipping products with prices that seem too good to be true. If this is the case, then they are probably scamming you. You may find they charge a large joining fee, instance. Real dropshipping suppliers shouldn't charge you anything before you start selling their products.
Dropshipping is a good way to start retailing online due to the low start-up costs and the ability to test out how popular products will be before actually paying for them. If you spend some time choosing the best products to dropship, you improve your chances of success immensely. Once you have established a solid customer base and made some profit, it will probably be cheaper to use a wholesaler who takes upfront payments and buy your goods in bulk. If you have enough space to store your products, this is a good way of increasing your profit on each sale.