How to Sell Products Online…Without Buying Any Inventory
Dropshipping is a way for store owners to sell and send physical goods to customers without the need to warehouse inventory.
Here’s the dropshipping process simplified in five steps:
1. Your customer visits your online store and places an order.
2. Your store processes the order and sends it to your third-party supplier automatically.
3. Your supplier receives the order and ships the product directly to the customer.
4. Your customer receives the product thinking that it came directly from you.
5. You make money because you charge the customer a retail price while paying your supplier a wholesale price.
What Do You Need to Get Started?
First, you’ll need to research a dropshipping niche, meaning you need to decide what you’re going to sell. You can do this with some simple Google Trend searches to help you determine what’s popular in your desired niche. Next, you’ll need to find suppliers or manufacturers that stock the products you want to put on your online store. Again, this can be done with some Google searches using the product keyword along with “wholesaler” or “manufacturer.”
Of course, you’ll also need a website with e-commerce functionality. Don’t worry. You don’t need to learn programming. Platforms like Shopify can build a website for you with a few clicks of a button. You can even try Shopify right now with a free trial.
In order to sell products shipped from a supplier, you’ll need a relationship with them. You’ll need to get on the phone with the supplier to establish this relationship. Finally, you’ll need a customer service component to your dropshipping website to answer any questions from buyers and to facilitate returns to the supplier and refunds when necessary. This is a task that can be easily outsourced if you don’t want to handle it yourself.
The Supplier Relationship
To build a relationship with a supplier, here are some things your supplier will need:
• Your supplier will want to know that you’ll not undercut the minimum advertised pricing scheme, or MAP. The MAP is the lowest price at which you’re allowed to list a supplier’s product. Suppliers like to maintain brand integrity. By defining the lowest minimum price on their product, they can be assured that no e-commerce store will sell below this price online. Sellers that undercut the MAP tend to get banned by suppliers.
• Your supplier needs to know that you’ll deliver quality customer service regarding their products to preserve their brand integrity.
• You’ll need to set up a demo store and upload several products on Shopify to show your supplier your business savvy and intentions before they’ll approve you to sell their products.
As a seller, it’s your responsibility to find out the processing and shipping time for the products you sell. You need to know about your supplier’s tracking system, refund policy, and whether they offer warranties and guarantees on their products. These are all customer service issues you may encounter.
Why Choose a High-Ticket Niche Strategy for Dropshipping?
There are some good reasons why building a store with high-ticket items makes sense, but first let’s define a high-ticket dropshipping niche. These are generally products that are above $500 and ideally, $1,000 to $5,000.
Four reasons why selling high-ticket items is easier:
• It takes the same amount of time for you to research your niche and contact suppliers.
• It takes the same amount of time to upload your products onto your store.
• Higher prices mean higher margins per order. You have the ability to make more money while doing less work because you have fewer orders to process and fewer customers to service. This frees you up to do important marketing tasks in your business.
• Taking your store from a part-time source of income to a full-time source of income will require less effort.
Customers who buy high-ticket items online value a good customer service experience and they often have a lower return rate. So if your store has extra content like product guides or explainer videos, you can easily create that higher level of customer experience for them. You set it up once and you’re done.
Running a high-ticket dropshipping store allows you to have a higher profit margin than if you were just an affiliate of a product (getting paid a cut from the supplier), and most importantly, the customer is yours, not your supplier’s. You have control over how you run your business. Using a high-ticket strategy is a way to work smarter, not harder.
By Ian Bond