Advantages Of Drop Shipping

Drop shipping is 'a type of retailing where the retailer does not keep goods in stock, but instead passes the customer's order and shipment details to the wholesaler, who then dispatches the goods to the customer directly.' [Source: Wikipedia] The retailer then keeps the difference between the wholesale price and the retail price. If you're planning to start an online retail business, drop shipping may be just the option for you.

Let's review the process of drop shipping, and analyze the advantages that the drop shipping business model has over the others.

No Upfront Payment

First of all, you do not need to pay upfront for a stock of products before you can start selling. With drop shipping, you can simply get into business by displaying the products you want to sell on your website, before you've actually purchased any of the goods. After you've received your order via the internet, you can then forward the order to the drop shipper, usually through email, who will then deliver the products to your customer (s).

In essence, this is the reverse process of normal retailers. You actually 'sell high' first before 'buying low'. Since you're not making a huge upfront down-payment for your products, you're not bearing any risk at all. There is not a risk of purchasing thousands of units of a product, and realizing that you're not able to sell them because the consumer demand is insufficient.

So, by not needing to make an upfront payment to stock products, you're benefiting in two ways. One, the drop shipper bears all the risk for you. If the products are not in-demand, it's the drop shipper who is potentially making a loss, not you. Second, your startup costs are extremely low. All you need to invest in your drop shipping business is an initial deposit or down-payment, to demonstrate your commitment to the drop shipper, and also ongoing web hosting fees and advertising fees. This is a huge difference from retailers who have to invest on a fortune to purchase huge stocks of goods to get into business.

Product Delivery Taken Care Of

The second feature of drop shippers is that they take care of the products delivery and shipment for you. This is highly advantageous if you're just starting out in business because you can focus all your time and efforts on marketing your business, instead of worrying about order fulfillment or delivery.

Order fulfillment can be a very tedious and time-consuming process if your monthly orders number in the hundreds or thousands. You need to spend generous amounts of time keeping track of your inventory, packaging the products and shipping them to your customers individually. On the other hand, if a drop shipper takes care of product fulfillment for you, you're automating the process of shipping the products, and you can focus on your core competency – marketing your business to bring in more customers. This is another great advantage of using drop shipping as your business model.

No Need For Warehousing

Since you do not need to purchase a huge inventory of stocks from the drop shipper, there's no need for warehousing costs as well.

This is highly advantageous if you consider this opposite scenario: If you rely on the usual wholesaling business model instead of drop shipping, you need a location to store your products after purchasing your initial stock. Depending on the space you need, your monthly warehouse rental costs can cut into your profit margin significantly. You may even be operating your business at a loss. Why not let the drop shipper stock the products at their warehouse until your customer makes a purchase instead?

Flexibility Of Product Catalog

With drop shipping, you have the choice of promoting any number of products you want on your website catalog. Since you do not need to make upfront capital investments, you have the flexibility of promoting as many products as you want, as long as the products are all related to the category of products you sell.

However, it's essential to strike a balance between the range of products you have, and the 'product focus' of your business. Your business should focus on a single category of products – you can not be a supplier of everything to everyone, like Wal-Mart. Be sure to include only the products you think are related to your core 'product focus', and avoid promoting too many unrelated products on your web catalog.

No Minimum Quantity Restriction

The last advantage of drop shipping is that most drop shippers do not make a minimum quantity order. When your customers place orders at your website, you can forward your orders to your drop shipper one-by-one. Most drop shippers do not have a problem with that. So, drop shipping is very beneficial for your business because it offers the greatest flexibility.

In conclusion, drop shipping is definitely an option you want to consider if you're planning to start an online retail business without all the hassles of inventory and product delivery. If you evaluate the above advantages carefully, you'll realize that drop shipping is unduly a viable option for the small-business retailer. Large retailers, on the other hand, will have sufficient resources like capital to use the wholesaling model for their business.



Source by Ray Yee

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The Secret Design Keys to Increasing Your Website Conversions

We all know that the overwhelming majority of all ads and websites on the internet go unnoticed and unclicked. ComScore tells us that only 16% of display ads ever get clicked! Why?

Bad design.

What does this mean for you, the business owner and online advertiser? It means that it is almost certain that your advertising money is being wasted, and your business is missing out on the most lucrative market in the world. There was a time when you could put a simple sales page up on the internet and expect it to convert well. That time is gone. With the internet being flooded by everything from Elephant Back Scratchers to Cactus Pants, your product is lost in the noise.

With people becoming more educated and more wary, good design has become your most important tool in selling your products and achieving your goals.

Any time we critique a website or consult with a business on their websites performance, we have a list of over 40 keys that transform a poor performing website into one that converts. Here, we are giving you 5 of those keys to start getting your online business into shape.

Key # 1 – The Connection & The Story

People are tired of being sold. They want a connection. They want to form a relationship with you. Nobody wants to land on a website and be told that they should buy something, without even really knowing that much about it, or about you. Tell them a story. Never view every visitor as a potential sale, view them as a potential relationship with some kind of opportunity that may arise from it.

Key # 2 – The Next Step

You have someone on your website, fantastic! They have a quick look, then disappear back into the virtual world. You need to give someone a clear path to what you want them to do next. Not just a "Recent News" list, get them going where you want them to go. Every step you take someone into your step is another step to developing a great relationship with them. Do not expect people to land on your site and then explore everything.

Key # 3 – Further Contact

One great thing about a website is the ability to collect a list / database that you can then use to distribute information and get potential sales and customers. That's right, the subscription form. They key with this is to not hide it down in the footer. You want people to connect with you! If you know you need it to make a list, actually make a feature out of it! We have found, on average, that if you place a subscription form "above the fold" (visible without having to scroll down) the opt-in rate increases 10% without a single other change.

Key # 4 – The Visual Experience

Here it is. Design. The largest key to making a website a success. Content is not enough anymore – the design of it is integral. You can double your sales overnight by simply changing the look of the website. So many of our clients have come to us with a website they have made themselves, or gotten made for as little as possible, asking why it is they are not working. Then with a redesign they start to experience online success, without changing any content. You want to be professional? Look the part.

Key # 5 – Credibility

People want to trust you and trust your products. One of the best way to do that is show them testimonials, logos, partners, etc who have experienced your work in the past. Testimonials are huge! Reviews on Amazon can make or break a product. The same goes for you! Get good reviews and testimonials and publish them on your site. Even better: have them as videos.

Remember that your first impression with a website visitor is the most important. Having a bad experience may mean they never come back. Give them a great experience.

Good luck and I hope you experience the success you deserve!



Source by Scott A Stuart

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