So you want to open a business from home but you don’t know where to start. You might want to consider dropshipping. What is dropshipping? Simply put, it’s a business arrangement where you sell other people’s wares without worries over shipping or packaging issues. Your only duty is to market the product. And, once you generate sales, the dropshipping company you’re working with takes care of mailing the package out.
Of course, there is a downside to dropshipping companies. In order to take advantage of them you’re going to have to pay more for your products in general. This could translate into a lower profit margin depending on how you market your wares.
This is why you want to make sure you’re using the best dropshipping companies to begin with. And you can do this by researching existing dropshipping listings whether it’s in the phone book or through dropshipping directories. Or, you can go with companies like Doba which is considered a ‘middleman’ dropshipping company.
How does Doba work? Basically, you pay $49.00 a month to have access to their database of products. There are hundreds of different products available ranging from food to video games. And, like any other decent dropshipping enterprise, you have regular stock reports as you sell off their inventory. You can also call or write them as they have listed all of their contact information right on their website.
Yet, what if a person decided to go in the other direction… which would involve working with ‘traditional’ dropshipping companies that are not in the middleman category? Basically, they would need a business license because traditional dropshipping companies don’t like working with enterprises that haven’t developed a name for themselves or their company. But other than that, everything else would be the same only better. There would be no monthly fees and they could mail off items without worrying about the shipping expenses.
Speaking of shipping expenses, you might be wondering which tactics you could use to offset your profit margin, (at least in a positive way). The first could involve charging more for your items.
For example, say a dropshipping company charged $10 for a gold chain. This price includes the shipping expenses. Try to offset your profit margin by charging $20. If you do so, you will get a $10 profit despite having to contribute maybe $3.00 or so to shipping.
Another option could involve a psychological trick. Up the price just a little bit and tell your consumer that shipping will be included with the item. They will think they are getting an excellent bargain, especially if it’s a product that they really wanted.
Lastly, you could use a different psychological tactic… one that is more common. This involves showing the shipping as a separate price and including it towards the end of their shopping experience. If your shipping is less expensive, (which it may be even if your competitor is Amazon), they won’t be so intimidated. If it’s something they desire, it won’t hurt to pay $5 extra for shipping.
In conclusion, finding good dropshipping companies is not an easy battle but it’s not impossible either. If you have no business license, you might want to go with a middleman dropshipping company. But if you do have one you might want to go with traditional dropshipping companies since they don’t charge you any monthly fees. Either way, take note that once you have signed up with someone you’re going to need to be somewhat creative in how you market the company’s wares. Do it right and you’ll get rewarded tenfold. Do it wrong and you’ll lose out on your dreams.
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