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Charles

Dropshipping: Guide To Successful eCommerce Business Part 2

Going beyond basic

Ways to use Google to find to find wholesalers
1. Search extensively: Wholesalers and drop shippers are notoriously bad at SEO and marketing, and usually aren't going to pop up on the first page of Google for a term like “handbag wholesaler.” Instead, you'll need to dig deep into the search results, often going through 10 or 20 pages of listings.
2. Don't judge by the cover: Suppliers also tend to have outdated, late ‘90s-era websites. So don't be scared away by abysmal design and layout. While a sleek, modern site could signal a great supplier, a low-quality one doesn't necessarily indicate a bad one.
3. Use lots of modifiers: As you hunt for suppliers, don’t stop with a search for “wholesale.” Make sure to use other modifier terms, including “distributor”, “reseller”, “bulk”, “warehouse” and “supplier.”

What are the problems with drop shipping?
Despite my glowing recommendation, drop shipping isn't eCommerce nirvana. Like all models, it has its weaknesses and downsides. With some planning and awareness, these issues can be managed and need not prevent you from running a successful drop shipping business.

1. There will be loads of competition and bad margins
Solution: It's true. Products that can be drop shipped will spawn a lot of competition. Usually this will lead to cutthroat pricing and diminishing profit margins, making it hard to build a viable business.
To be successful, you typically can't compete on price. Instead, you'll need to offer value in a different way, usually through top-notch product education, service or selection. For more information on how to pick a profitable niche and add value, see this post on finding a product to sell.

2. Syncing inventory is difficult and leads to out-of-stock items
Solution: The best way to mitigate this problem is to work with multiple suppliers with overlapping product lines. It's inherently dangerous to rely on a single supplier. Having two suppliers doubles the likelihood that an item will be in stock and available for shipment.
Eventually, you’ll sell a customer an out-of-stock item. Instead of canceling the order, give the customer an upgraded product for free! You might not make much—if any—money on the order, but you'll likely build a loyal brand advocate.

3. It's hard to sell products that you never see
Solution: In today's world, it's possible to become an expert in just about everything through information online. Selling products from manufacturers with detailed websites will allow you to become intimately familiar with a product line without ever having touched a physical item. And when you do need to answer specific question about a product, a quick call to your supplier or manufacturer will give you the answer you need.
You can also buy your most popular items to get acquainted with them, and then resell them as “used” or “refurbished,” often recouping most of your investment.

4. Involving a third party will result in more fulfilment errors
Solution: Even the best drop shippers make occasional mistakes, and mediocre ones make a lot of them. Suppliers are fairly good about paying to remedy problems, but when they're not, you need to be willing to spend what's necessary to resolve the issue for your customer.
If you try to blame your supplier for a fulfillment problem, you're going to come off as amateurish and unprofessional. Similarly, if you're unwilling to ship out a cheap replacement part to a customer because your supplier won't cover the cost, your reputation is going to suffer.
One of the costs of drop shipping convenience is the expense of remedying logistical problems. If you accept it as cost of doing business—and always make sure to put your customer first—it shouldn't be a long-term issue. Continue Reading