Drop Shipping
If you have decided to not stock anything, then you probably want to drop-ship products where you have an established warehouse/factory ship the products on your behalf. You would basically pick the products in their catalog(online/offline) you want to sell, and create those items in your site’s database. In a nutshell, when your customer makes the purchase on your site, you receive payment directly from them, and once you’ve verified payment, you then place an order with your drop-shipper (online or offline), and have them ship the order to your customer. You would basically pay the warehouse/factory your cost plus the shipping charges. The difference between your net sales amount minus what you have to pay them and what you charge your customer is your profit.
Now there are many drop-shippers you can work with. Just google “drop-shipper” and you’ll find plenty of websites and directories listing drop-shippers in all kinds of industries. Some sites will even charge you for their “secret list”. It’s up to you to decide if the information they provide is something you cannot find yourself. I would suggest to start contacting drop-shippers in your chosen industry you can find for free, get a price list, and see if you like the profit margin or not.
Stocking Your Own Products
Drop-shipping is convenient, but you’ll never have a really good margin doing so. Remember, the warehouse/wholesaler that drop-ships on your behalf has to take a cut too for stocking, packaging, and shipping the product for you.
To have a higher margin, it’s a good idea to but directly from the factory and stock products yourself. Now, before you think you get excited and think you can buy name brand items at the same price as big retailers and compete with them, think again. Basically, you would want to stay away from traditional products you can get anywhere. If you want to have a healthy margin, and still give good value to your customers, then your best bet is to import products from overseas, namely China.
Visit Alibaba.com and browse around. You’ll be amazed at the sheer number of factories that are ready to do business with you. Just make sure you research enough and work with the factories that have good ratings. You should even try to look for small items so you can even stock them in your garage to get things started.
Well, there you have it, some ideas to get you started in your product research. The bottom line is, there are more suppliers out there than you can even imagine…you just have to look. So start looking, and narrow down some ideas you’re comfortable with, so you can start building your website, and start selling!
