The Entrepreneur Forum | Startups | Entrepreneurship | Starting a Business | Motivation | Success

How does drop-shipping work ? Tips?

Ksalazar

Contributor
Sep 16, 2018
54
50
117
Rhode Island
Hello Everyone

I came across a Udemy course on drop-shipping with Shopify. I have not started the course but am just curious to see if anyone knows how this works. Also how it is used for business. Any help would be highly appreciated, as soon as I finish the course Ill create a new thread and put some information to help anyone that is curious to learn more.
 

Don't like ads? Remove them while supporting the forum. Subscribe.

Last edited:

DVU

In Progress
Read Millionaire Fastlane
Speedway Pass
Sep 24, 2016
256
580
253
21
Croatia
STANDARD MODEL:
MANUF->COMPANY->CUSTOMER

DROPSHIPPING
MANUF->CUSTOMER

You are just the middleman.

If you never ran a business I don't recommend dropshipping.
 

jpn

Bronze Contributor
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Speedway Pass
May 6, 2017
117
358
188
Netherlands
If you copy paste the thread title into Google you’ll get answers. Here’s an instruction in case you’ve never used Google: link

Asking people for answers without doing the minimum of research yourself is disrespectful.
 
OP
OP
Ksalazar

Ksalazar

Contributor
Sep 16, 2018
54
50
117
Rhode Island
If you copy paste the thread title into Google you’ll get answers. Here’s an instruction in case you’ve never used Google: link

Asking people for answers without doing the minimum of research yourself is disrespectful.

I did google the information however wanted more in depth insight from people that actually have used it to get a better understanding getting information from other experienced people isnt disrespectful its smart
 
OP
OP
Ksalazar

Ksalazar

Contributor
Sep 16, 2018
54
50
117
Rhode Island
STANDARD MODEL:
MANUF->COMPANY->CUSTOMER

DROPSHIPPING
MANUF->CUSTOMER

You are just the middleman.

If you never ran a business I don't recommend dropshipping.
I see definently isnt a fastlane business and is highly dependent on other factors that limit your control. I appreciate the help DVU.
 

Tanu1234

Contributor
Aug 4, 2018
70
59
56
Hello Everyone

I came across a Udemy course on drop-shipping with Shopify. I have not started the course but am just curious to see if anyone knows how this works. Also how it is used for business. Any help would be highly appreciated, as soon as I finish the course Ill create a new thread and put some information to help anyone that is curious to learn more.
I suggest go with good and reliable product to dropship.

Selling any product can kill your reputation.
 

jpanarra

Platinum Contributor
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Speedway Pass
Jan 9, 2014
873
2,530
671
30
Indianapolis, Indiana
It works,

Margins suck, and you need to drop top dollar on ads at the beginning, I'm talking about 600-1000 per month to really make it feasible, but it works.

However, at that price point, you'll be better off importing something from china and reselling it on amazon/ebay. The margins are just better, if you want to go ecom dont start with dropship. Start with import/export.

There are tons of threads on here by biophasel, ecomman, and walterhay. look em up in the notables/gold threads.
 

Neng Her

Bronze Contributor
Read Millionaire Fastlane
I've Read UNSCRIPTED
Speedway Pass
Aug 30, 2018
208
212
155
Sacramento, ca
Hello Everyone

I came across a Udemy course on drop-shipping with Shopify. I have not started the course but am just curious to see if anyone knows how this works. Also how it is used for business. Any help would be highly appreciated, as soon as I finish the course Ill create a new thread and put some information to help anyone that is curious to learn more.


Dropshipping is a retail fulfillment method where a store doesn't keep the products it sells in stock. Instead, when a store sells a product, it purchases the item from a third party and has it shipped directly to the customer. As a result, the merchant never sees or handles the product.
The biggest difference between dropshipping and the standard retail model is that the selling merchant doesn't stock or own inventory. Instead, the merchant purchases inventory as needed from a third party – usually a wholesaler or manufacturer – to fulfill orders.

Benefits
Less Capital Is Required – Probably the biggest advantage to dropshipping is that it's possible to launch an ecommerce store without having to invest thousands of dollars in inventory up front. Traditionally, retailers have had to tie up huge amounts of capital purchasing inventory.

With the dropshipping model, you don't have to purchase a product unless you already made the sale and have been paid by the customer. Without major up-front inventory investments, it's possible to start a successful dropshipping business with very little money.

Easy to Get Started – Running an ecommerce business is much easier when you don't have to deal with physical products. With dropshipping, you don't have to worry about:

  • Managing or paying for a warehouse
  • Packing and shipping your orders
  • Tracking inventory for accounting reasons
  • Handling returns and inbound shipments
  • Continually ordering products and managing stock level
Low Overhead – Because you don't have to deal with purchasing inventory or managing a warehouse, your overhead expenses are quite low. In fact, many successful dropshipping businesses are run from a home office with a laptop for less than $100 per month. As you grow, these expenses will likely increase but will still be low compared to those of traditional brick-and-mortar businesses.

Flexible Location – A dropshipping business can be run from just about anywhere with an internet connection. As long as you can communicate with suppliers and customers easily, you can run and manage your business.

Wide Selection of Products – Because you don't have to pre-purchase the items you sell, you can offer an array of products to your potential customers. If suppliers stock an item, you can list if for sale on your website at no additional cost.

Easy to Scale – With a traditional business, if you receive three times as much business you'll usually need to do three times as much work. By leveraging dropshipping suppliers, most of the work to process additional orders will be borne by the suppliers, allowing you to expand with fewer growing pains and less incremental work. Sales growth will always bring additional work – especially related to customer service – but business that utilize dropshipping scale particularly well relative to traditional ecommerce businesses.

All these benefits make dropshipping a very attractive model to both beginning and established merchants. Unfortunately, dropshipping isn't all roses and rainbows. All this convenience and flexibility comes at a price.

Disadvantages
Low Margins – Low margins are the biggest disadvantage to operating in a highly competitive dropshipping niche. Because it's so easy to get started – and the overhead costs are so minimal – many merchants will set up shop and sell items at rock-bottom prices in an attempt to grow revenue. They've invested so little in getting the business started so they can afford to operate on minuscule margins.

True, these merchants often have low-quality websites and poor (if any) customer service. But that won't stop customers from comparing their prices to yours. This increase in cutthroat competition will quickly destroy the profit margin in a niche. Fortunately, you can do a lot to mitigate this problem by selecting a niche that's well suited for dropshipping. We'll discuss this more in Chapter 4.

Inventory Issues – If you stock all your own items, it's relatively simple to keep track of which items are in and out of stock. But when you're sourcing from multiple warehouses, which are also fulfilling orders for other merchants, inventory changes on a daily basis. While there are ways you can better sync your store's inventory with your suppliers', these solutions don't always work seamlessly, and suppliers don't always support the technology required.

Shipping Complexities – If you work with multiple suppliers – as most drop shippers do – the products on your website will be sourced through a number of different drop shippers. This complicates your shipping costs.

Let's say a customer places an order for three items, all of which are available only from separate suppliers. You'll incur three separate shipping charges for sending each item to the customer, but it's probably not wise to pass this charge along to the customer, as they'll think you're grossly overcharging for shipping! And even if you did want to pass these charges along, automating these calculations can be difficult.

Supplier Errors – Have you ever been blamed for something that wasn't your fault, but you had to accept responsibility for the mistake anyway?

Even the best dropshipping suppliers make mistakes fulfilling orders – mistakes for which you have to take responsibility and apologize. And mediocre and low-quality suppliers will cause endless frustration with missing items, botched shipments and low-quality packing, which can damage your business's reputation.

Is It Worth It?
As we initially warned, dropshipping isn't a perfect, stress-free way to build a successful business. The model has some definite advantages but comes with a number of built-in complexities and problems you'll need to be able to address.

We'll be examining these problems – and how to best address them – in future chapters. The good news is that with some careful planning and consideration, most of these problems can be resolved and need not prevent you from building a thriving, profitable dropshipping business.

Hope this Helps you. Credits to Google. I suggest find someone who wants to do drop shipping as well and split the cost of whatever program you are purchasing.
 

Create an account or login to comment

You must be a member in order to leave a comment

Create account

Create an account on our community. It's easy!

Log in

Already have an account? Log in here.



Don't like ads? Remove them while supporting the forum. Subscribe to become an INSIDER.

Post New Topic

Please SEARCH before posting.
Please select the BEST category.

Post new topic

Fastlane Insiders

View the forum AD FREE.
Private, unindexed content
Detailed process/execution threads
Monthly conference calls with doers
Ideas needing execution, more!

Join Fastlane Insiders.

Top Bottom