How to Start a Drop Shipping Business

And make money online.
There are so many ways to start a home business online. One of
the challenges most people who want to start a business from home
face, is the lack of space to carry inventory. Fortunately,
there are businesses that do not require sellers to store
products. This is a "drop ship" type of business.

What is drop shipping?

Drop shipping is the method of retail merchandising which allows
business owners to sell products without first purchasing and
stocking the items they sell. This arrangement is made between
the seller and the supplier. In other words, a seller would
display a product, either on a website or on a mail-order
catalog, without having it in their inventory.

How does it work?

The seller charges a certain price, which is over what the
supplier is selling. The difference between those two prices is
the seller's profit.

When a buyer purchases that product, the seller can go to his/her
supplier's website or call the supplier and place the order which
will be delivered directly to the customer's mailing address.

In this way, the seller is responsible for the promotion of the
products and the supplier takes care of fulfillment.

As with any other business, one should do thorough research
before starting. Probably the most important thing to consider
is whether there is a market for the product. A mistake that many
marketers make is to start with a product they think will sell,
only to be disappointed down the road when they lose money.

How do you find a hot market?

The beautiful thing about the Internet is that all the research
being done by multi-million dollar corporations is readily
available. You just need to know where to look to simply take
advantage of the online giants' technology.

Two great, free examples that can give one tons of niche ideas
for products to sell are eBay and Overture.

eBay trends about what is selling can be observed by visiting
eBay pulse at http://pulse.ebay.com. One can then drill down by
categories and sub-categories and find niches of interest.

With Overture's tools you can establish demand and supply in an
instant. Simply type in a phrase in their keyword suggestion
tool: http://inventory.overture.com/d/searchinventory/suggestion/
to see the demand.

If there are advertisers spending good money for products, then
it's a good sign that the people in that market are spending
money on the items. Overture's bid price tool shows this
information:
http://uv.bidtool.overture.com/d/USm/search/tools/bidtool/

Another important aspect of the drop shipping business, is to
find reliable suppliers. Some things to look for are:

1. Are they charging a handling fee per item?
2. Are they using reliable shipping methods?
3. How are they handling returns?
4. How long have they been around for?

By using "drop shipping" + product of interest, in Google's
search, one can locate many drop shippers.

In conclusion, drop shipping is a great business model for anyone
who does not want to deal with carrying inventory and
fulfillment. However, it is very important to identify a hot
market where customers are already buying and to locate a
reliable drop shipper before starting a drop shipping business.

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