How To Start a Drop Shipping Business

By Matthew French

What is Drop Shipping?
Drop shipping is where you sell products to a customer that you don’t physically have in your inventory. The customer pays you and then you turn around and purchase the product from a wholesaler at a reduced profit. The wholesaler then ships the item to your customer, usually using your return address. You make a profit on the difference between what the customer pays you and what you pay the wholesaler. This can be a very profitable and lucrative business, if you know what to do.

Step 1: Before You Do Anything Else
The first step in starting any new business is to sit down and write out a business plan. It doesn’t have to be some long drawn out analysis of every aspect of your new business, but it needs to be at least a list of bullet points to give an idea of what it is and where it’s going. You need to include what products or services you are going to provide to your customers. You also need to talk about who your potential customers are and why they would want to purchase from you. You also might want to think about how you are going to market to your potential customers to draw them to your website. Most important of all you need to figure out where you are getting the financial resources for the start-up of your business. This is not as big a deal in a drop shipping business as it would be in a business that holds inventory and ships out its own merchandise. If you take the time to write out a solid business plan than you will have a better chance of success with your new business than someone who is going into this blind.

Step 2: Where Are You Selling?
The next step in starting a drop shipping business is deciding where you are going to sell your products. The two main options is by forming your own website or by selling them on an auction site such as Ebay. Either option is a great way to make money. If you are better at writing great product descriptions that get buyers excited about the product and don’t want to spend money on a webpage than Ebay might be the best thing for you. After you have gained a little income you might want to go ahead and start your own website. However, just by having a website does not mean you will get customers. You will have to look into marketing your site through search engines to really get that traffic flowing to your store. Both of these options are great, it just depends on what you think is best for you.

Step 3: Choosing a Drop Shipper
One of the hardest things about starting a drop shipping business is finding a reputable drop shipper. The internet is filled with scam artists who are pretending to be drop shippers when they really aren’t. Places like Doba and Mega Goods say they are drop shippers but in reality they are middle men who have a list of actual drop shippers that they use. They charge you more than what the actual distributors charge them to drop ship. In order for you to get the lowest price on merchandise, you need to bypass the middle men and go straight to the distributors. You can do this by going to websites that provide lists of reputable distributors that you can use in your business. This way you can guarantee you are getting the absolute lowest prices. The best way to do this is to join a site that gives you access to a directory of reputable drop shippers. These drop shippers can sell you merchandise at half-off or more.

Step 4: Making the Money
The final step in setting up a drop shipping business is making money. If you do what I have told you already and you put some work into your business, you will make money. There’s no way you can’t, unless you don’t try. The most important thing that you can learn when making money is to remember to pay your taxes. This isn’t free money and the government has to have their cut, just like in a regular job. So make sure you consult an accountant and have all your ducks in a row before rush off and start making those millions.

I wish you the best of luck in your new business.

P.S. - For the Drop Ship Directory I use follow the following link: http://www.usfreeads.com/439511-cls.html

Matthew is a student at the University of Central Arkansas and has had success making money online.

http://www.usfreeads.com/439511-cls.html

Article Source: http://EzineArticles.com/?expert=Matthew_French

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