The Definition of Drop Shipping
The number of aspiring entrepreneurs is getting bigger and bigger each day primarily because of the opportunities when it comes to business and entrepreneurship. Nowadays, one of the most popular retail business is the Drop Shipping because it allows the business owner to avoid owning or storing of inventory. In addition to that, through drop shopping, owner can just simply look for a legit of supplier of a certain product and just ship directly to their customers. Thus, this avoids the hassle of too many transaction and channels before the customer receives his/her parcel.
This is how the business works: a customer visits your online store and decided to buy something from your products, he/she then make a purchase. You receive the order and immediately forward it to the drop shipping partner. Read Hustle Life’s guide for a more detailed process for starters. Once the supplier receives the order, the order will be packaged and will ship directly to the customer on your behalf.
The main reason why many entrepreneurs shift to this business structure is because of the low capital requirement. Investment in inventory is no longer needed because you will only need to purchase a certain product if a customer orders it. If you are planning to start a drop shipping business, below are some steps to consider:
Starting a Drop Shipping Business
- Developing a Business Structure- The most popular type of business structure would be the sole proprietorship because it is the most straightforward yet do not provide any personal liability protection
- Finding the Right Supplier- Once you determine your product, you need to look for a drop shipper partner. It is important to look for suppliers that have enough experience.
- Choosing the Appropriate Selling Platform- You have a lot of options for this one. There is Amazon and eBay. However, each has its drawbacks. For example, Amazon provides built-in access to wide audience but the seller’s privacy is at risk because Amazon has full access to seller’s details.
- Brand Awareness/Promotion– of course, every business needs promotion. It is the key for a successful business ventures. SEO is known to be the most effective way to promote your drop shipping business.