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How to Start A Successful Drop-Ship Business

By Edited Jun 11, 2016 1 2

Drop ship(94936)

Picking The Drop-Ship Product You're Going To Sell

Not only is this the first step, it is also the most important. You are in need of a product that has a high monthly search volume in Google (you can do keyword research using this free tool) but a small amount of competition. 

You do not want to be selling $10 or $20 items in large quantities, as then your phones will be ringing off the hook and customer service will be a mess. You want to sell $50 - $200 items in smaller quantities. Try to find products with a profit margin of at least 50%.  

Keep away from flooded niches with huge amounts of competition. It's a waste of time to be competing with Amazon and other big box stores online. Products to be avoided would include electronics, health supplies, clothing and appliances. 

  

Finding The Right Drop-Ship Supplier

Once you decide on the product you want to sell, then you have to find a good drop-ship supplier to fit your needs. The best way is to simply Google drop search for the product suppliers. For example, if I want to sell Baseball Bats then I would search for «baseball bat suppliers», «wholesale baseball bats», «baseball bat drop shippers», etc. 

Not all wholesalers offer drop-shipping, so you'll need to make a list of 8 to 10 suppliers and then call them all to ask what they offer. Ask about pricing, billing terms, shipping procedures, returns/exchanges, etc. Do not get discouraged if a supplier won't work with you immediately. Some larger companies have strict rules about who they work with, so you may have to start with a smaller supplier while you get your site rolling and gain credibility. 

Stay away from China drop-shippers! Also, steer clear of «all-in-one» solution like Doba, they are terrible. Use only suppliers who are warehoused in the same country as your customers. Trust me. 

  

Developing Your Website

This step can be tackled many different ways depending on your knowledge level. I'm just going to assume for this part that you have zero experience in web development. My recommendation is using any commerce software that has a shopping cart, admin, email tools, analytics, and credit card processing all in one. These sites also make it easy to design with pre-made templates to go off of. I personally use Volusion software. It's a very nice solution, however it can be expensive with high traffic because they overcharge for bandwidth.

Once your website is designed and your database is live, then you need to optimize it for search engines. You need to make sure that every product page, category page and your homepage have a decent amount of content that relates to the terms you're trying to rank. You also need to make sure your title tags, header tags and description meta tags all have matching keywords to go along with your content. 

I know that I am being very brief here when it comes to SEO, but it's just too much to dive into without confusing 99% of readers. It's best to have someone recommend a consultant with years of experience and proven results. Hire them to help get things off the ground the right way.  

Here is an example though, assuming I am trying to sell baseball bats on my homepage:

title tag: «Baseball Bats - Wood Bats and Metal Bats»

h1 tag: «Baseball Bats»

Description Meta: «Buy wood baseball bats and metal baseball bats online at BaseballBats.com and get free shipping on all orders. Our baseball bats are 100% guaranteed to hit home runs!»

Then you need to write content paragraphs (200 - 400 words) that use the terms that you are targeting. This is a great place to throw in «long tail» keywords that will help you rank for other combinations of searches that include variables like sizes, colors, brands etc. 

 

Marketing and Advertising

I have tried just about every form of advertising that you could think of, and most have failed me. So I am just going to focus on the 2 things besides SEO that have actually consistently worked for my sites. 

PPC (pay-per-click) advertising is great for products. You can buy the exact phrases that convert sales well for your business from Google and Bing among others. You can display your ad every time someone types «metal baseball bats» into Google, and then only pay when someone clicks it. Since I choose niches that are not super competitive, I can get most clicks for around 0.75 cents each on average.

Twitter is an amazing resource the many businesses just don't understand how to use properly. I get massive amounts of traffic and sales from my Twitter marketing campaigns. Unlike PPC, getting Twitter traffic will most likely take help from someone who really knows what they're doing. You have to attract thousand of followers who are in the demographic you want as potential customers and then reach out to them on a daily basis without appearing spammy.

A good combination of SEO, PPC and Twitter is all you really need. Don't fall for sales pitches from companies offering banner ads, email lists, contextual ads or pop-ups.

 

Handling Customer Service

In my experience, people don't call you nearly as often as you would think. I only get one phone call for every 15 orders that get placed on average. Most customers order online, get confirmation email automatically, then you send tracking numbers if the supplier doesn't. Nothing too difficult honestly. 

It's nice to offer live chat during the day when you're online, some people like using that more than calling. Volusion has it built in to the shopping cart software. Offer a customer service email that is clearly posted on every page. Even if customers don't use the contact info, just seeing a phone number and email on each page makes you appear credible and puts their minds at ease. 

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Comments

Apr 29, 2012 4:48am
castaway747
Hi Jonathan,
I've been toying with the idea of dropshipping. Thanks for the info.
Oct 9, 2012 1:22pm
Marlando
Very good article and written well--you should be writing more! Anywy, greatinformation and 2 big thumbs up
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