How to Make Money Online With eCommerce Drop Shipping

This post was written by admin on January 15, 2012
Posted Under: eCommerce Drop Shipping
eCommerce Drop Shipping

eCommerce Drop Shipping Worldwide

Many entrepreneurs and small businesses make money online with eCommerce drop shipping without a storefront business to branch off of.

E commerce is extremely competitive on the Internet but when correctly implemented, eCommerce drop shipping in particular can quickly grow into a good sized business with a very little capital expenditure.

The first thing you need is a website to sell from.

The second and most important thing you need if you plan on making a decent living from e Commerce, is a lot of visitors looking at your site to buy what you have to sell.

For this reason you should be able to execute a well prepared business plan before you even think about setting up your website for drop shipping.

Most e-commerce websites have a conversion rate of 1 or 2%. That means that only one or two people out of 100 visitors will purchase from your eCommerce site.

It also means that to make any real money with eCommerce drop shipping, a mandatory 30% gross profit is necessary.

The line between making money and losing your shirt in eCommerce drop shipping is quite fine and the small details that are inherent to drop shipping can really make or break your business profits if they are not correctly addressed.

If you plan to be successful in eCommerce drop shipping, these four factors need to be considered.

  • Your Website
  • Your Supplier
  • Your Product Line
  • Profit Margin

Your Website and eCommerce cart is probably the most important factor in eCommerce drop shipping.

In order to satisfy your customer’s orders, your website and eCommerce script must seamlessly integrate with your supplier’s products, inventories and shipping options.

Because you will probably be using more than one drop shipping supplier, your eCommerce cart script must be able to support multiple shipping options from several warehouses.

One of the biggest challenges in online drop shipping is the matching of inventories.  Without accurate product stock information, the potential of losing money by selling out of stock products increases.

For this reason and others, it’s important that you choose a good supplier.

When possible, your eCommerce system should support live integration with your suppliers.

In the event your supplier does not have this capability, you will need to reconcile your inventory on at least a daily basis with each supplier.

Most of the problems that occur with eCommerce drop shipping can be traced to inventory issues.  The more accurate your stock information is, the more money you will make.

Your Supplier is a vital link to your customer and should be chosen carefully.

Although many suppliers claim to be able to provide a good selection of products at discount prices, it’s up to you to research their performance. Stay away from drop ship suppliers who charge a monthly fee.

A Google search in your market niche for a drop ship supplier will provide you with plenty of company names who drop ship.

When you finally decide on your suppliers, it is very important that you build credibility with them that will eventually morph into a long term relationship.

Your Product Line and price structure is important to the success of your eCommerce drop shipping business.

Your niche products should have already been researched to be priced competitively.

The price you place on your products should be “middle of the road”.  Price them too high and you will lose sales; price them too low and you won’t make any money.  Aim for a “middle of the road” price structure unless you know you have an exclusive product line.

Stay away from highly competitive products such as computers, electronics, jewelry, etc.  The profit margins on these products are too low to make any serious money, unless you are already getting a huge volume of visitor traffic to your site.

It’s much better to spend some additional time researching potential product lines finding more targeted products that convert higher, than to jump in and select a low converting product that you will lose money with.

Your Profit Margin is the final factor which determines if you will be successful in eCommerce drop shipping.

As stated earlier, if your profit margin isn’t at least 30% you will not be making any serious money with eCommerce drop shipping.  And if your suppliers can’t guarantee you that margin; look for other suppliers who can.

Finally, learn as much as you can about SEO and SEM.

You can always hire programmers to build an eCommerce store for you and install what is necessary to make your site friendly to the search engines.

Remember that your primary goal is to make money online with eCommerce drop shipping by selling something that people are actually looking for, so do your homework.

Reader Comments

Good article but I have some few questions. What if your supplier gives you a good amount of discount and a good quality item but charges you monthly? And, in the product line, what if you research on other sites about the same item and sell it for cheaper? Is that okay to do?

Written By ecommerce script on March 21st, 2012 @ 6:55 am


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