Dropshipping is eCommerce for entrepreneurs who don’t have their own inventory. In dropshipping, you work with suppliers who have and will ship the products to your customer once you’ve made a sale. They take the financial burden and risk, so you don’t have to.You set up a platform that you sell your products on.
People buy the items, and the supplier ships those products directly to your customer, which means you don’t have to touch that product. That can sound too good to be true, but here’s what you should know: dropshipping is not a get-rich-quick scheme. It is indeed a low barrier to entry business, but you have to put in the work to make it happen just like any other business.
You’re not going to be making $5,000 a week in week two! That’s not realistic. One thing to consider here when you start your venture with Shop1 is to keep in mind that building a successful company takes time. There will be failures, but there is no success without having some failures to learn from first.
The goal is to make the starting process smooth and taking advantage of others’ experiences as much as possible. That’s how you learn and get better.
There are many benefits to dropshipping as opposed to traditional online and offline retail methods. You don’t have to pay for a warehouse or take an extra bedroom of yours and stack it full of products. No inventory management is needed; hence there are no costs or time required to hire employees or manage the back office complications.
Drop shipping lets you be your own boss. You get to set your hours and decide when and where you work; that’s huge right now. I could go across the country and still work wherever I’m at as long as I have an internet connection, and that makes it a very nimble business model. That means that you don’t have money invested in property or items that you cannot offload, so you’ll have a lot more liquid assets like cash to help you when you need to make a change. So, the long-term investment requirements are not nearly as high as if you were to have your warehouse and employees.
However, there are challenges, just like anything worthwhile doing. The first and most significant challenge for most people is time management. As mentioned earlier, you are your boss; you set your hours, and you set the times that you want to work, and you can set how you work. You know that it’s all about how you want to do it and be successful when you’re your boss, you have to put much time into something. Of course, there’s work/life balance that you’d need to observe, and it’s imperative so you don’t burn out.
People have to know about your website, and the only way that happens is by advertising and marketing. We’re not going to go in-depth into this subject as it requires it’s own chapter later on.
Supplier management is a significant part of dropshipping. With Shop1, our team handles all this for you. However, it’s a good idea for you to know how it all works behind the scene as an entrepreneur. Supplier management is much more than just going out there and finding a few suppliers and being done with it.
You have to make sure you have quality suppliers who offer quality products. The order processing and shipping is a significant factor too. Whether or not they’re responsive to support requests, and even making sure their whole business is not a fraud.
Payment processing is another one to think about. It costs money every time a payment is processed electronically. There is a fee that your business would have to pay your gateway and merchant company.
Speaking of payments, many times, the suppliers will charge you for the drop shipping service they provide. If you’re not using Shop1, You will end up paying for that from your profits.
Of course, if you’re using Shop1, you’ll have transparent pricing and costs. Our suppliers often waive their fees or offer lower prices to dropshippers that use Shop1. These advantages are because we can negotiate better pricing due to the higher volume of sales we process through them.
Have we gained your curiosity? Get started by creating a free account here.
In this video, we’re going to show you how to create your very own Shop1 store. Navigate to shop 1.com from your desktop or mobile device. Press Get Started and Pick a Niche. When picking a niche, consider what you’re passionate about and will have fun advertising and selling. In this video, we’ll choose fashion and clothing as our niche.
The next step is to select the design of your site. Depending on when you create your account, you will have different design options. Press preview above each theme to see it in-action.
Once you’ve selected the design you like, you can create your store by giving it a name. Don’t worry; you can change this later. You can register with Facebook, Google, or an email address.
If you select the Register with an Email option, you will receive an activation email. Click the link in that email to fully activate your trial account.
Let’s review some of the main parts of the dashboard. When you first log in, you will see the main dashboard that gives you a quick overview of your store and how it’s doing. It can quickly give you some ideas about your business and sales through an analytics graph.
Let’s review some of the main parts of the dashboard. When you first log in, you will see the main dashboard that gives you a quick overview of your store and how it’s doing. It can quickly give you some ideas about your business and sales through an analytics graph. The latest search terms widget is a great tool to understand what your website visitors have looked up and are interested in.
The latest search terms widget is a great tool to understand what your website visitors have looked up and are interested in. The newest search widget also shows you the number of results returned against the search query. Looking at this data helps you understand your target audience and their interests and lingo better and even make better product selection decisions.
The Latest Orders widget links to the sales order screen. The order screen is where you can see all your customers’ order statuses. The status of orders updates by the system as they go through the fulfillment stages. Use the order details section to see what products were purchased and at what price.
Of course, you can also see if your customer has used a coupon and what your profit margin has ended up being. The order page is a transparent one that gives you a clear view of each order and your profit.
Let us quickly cover the Payment Reimbursement sections. Shop1 reimburses your profits into your bank or PayPal account of your choice as you generate profits and request a deposit. You can enter your receiving method on this page.
The Supplier Catalog screen is where you will be spending most of your time. This is the page where you can discover existing and new products to add to your store. You can also modify the products, adjust your profit margin and pricing, and customize them for your store. In the next video, we will review the product section in more depth.
Suppliers are the backbone of your business because, without them, you have no products. With no products, you have nothing to dropship. If you don’t have anything to dropship, you have no business. Finding suitable suppliers in the United States can be difficult.There is a lot that goes into the process.
You have to be very careful of scams and unreliable vendors. A drop shipper who is not utilizing a dropshipping platform like Shop1 must carefully vet and actively check in with their supplier. We recommend doing a test order with any new supplier and watching the order processing time and the tracking number. Check their invoice to see whom you’re paying. If the vendor offers checkout through a payment platform like PayPal, check the payment confirmation receipt, which should tell you whom you paid.
Once you find a supplier, you have to take into consideration their fees and requirements. Most American-based supplier strictly sells from business to business and don’t have any customer-facing storefronts. For legal and sales tax exemption criteria, all legitimate suppliers will require business documents. Suppliers need your company to be licensed in their state and have a resellers license tax ID.
If your business is not registered, you will not be able to move forward unless you’re using Shop1, of course. With all of the licenses necessary, you’re going to miss out on some of the suppliers. And getting all of that licensing is expensive and time-consuming.
Additionally, some suppliers require a minimum sales amount. We have suppliers that expect a minimum of $50,000 per year in sales to continue working with us. Such high requirements make it impossible for a new drop shipper to proceed with them.
The monthly and annual fees these suppliers charge can add up pretty quickly. On average, each supplier charges between $50-$100 per month to give you access to their catalog. Add the cost to import and re-import the products to your store, and you can expect each supplier to cost you around $500 a month. Inventory maintenance is very time-consuming and a must.
Communication with your vendor requires time and energy as well. Sometimes, you might be on hold for several minutes, or maybe you have to wait for email correspondence. That all can be somewhat stressful, and it’s again time-consuming. The communications can be about an order issue or changes in their program, or a mistake on their data feed.
Let’s talk about order processing. Orders should be filled correctly by your supplier and do so promptly. Delivery delays are no longer acceptable by buyers. People have grown more impatient and have higher expectations since Amazon revolutionized the delivery times.
So, if you have a supplier that’s taking ten to fifteen days to get a product to your customers, they’re jeopardizing your business. Such behavior risks your customers’ loyalty and lifetime value. In plain words, the customer will stop buying from you because they don’t want to wait that long again.
Shop1 strictly works with suppliers in the United States to ensure your customers’ quality and fast delivery experience. Better delivery experience maximizes your chances of success with your business, and by extension, it expands ours too.
This is where Shop1 comes in. Watch this video and see what Shop1 to make having your very own dropshipping store easy!
This video will show you how to do this.
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