Dropshipping basically means you can sell products through your own ecommerce site without ever having to touch any of the items. All the hassle normally involved in the back end infrastructure of an ecommerce site has been taken off your hands. Like most things in life there is a compromise that has to be made and with dropshipping it’s your bottom line.
Whether you can afford to make that compromise will depend on the industry you are operating in, if the margins are there and price is not necessarily the most important factor on the customers mind then I would say take the option to dropship every time. In the future once you have a better idea of what product lines sell best you can then look at bringing some of the operations in house.
Source – ostrosky
Dropshipping and affiliate marketing are pretty much one in the same beast, as we all know both have their own pros and cons, with dropshipping you can expect to make a higher margin, you keep the traffic on your site, but you need to look after the whole payment process, deal with inquiries, complaints and customers in general. With affiliate marketing all you have to worry about is pushing the traffic to the merchant, they will handle the res, the tradeoff here is the margin. So it’s effort versus reward do you want to make more and deal with more problems, or do you want the easier life and make less?.
If you still feel that dropshipping will prove the best fit for your business model, then you need to first identify possible suppliers. Many big companies specialize in offering this service, but in many cases the product range is to main stream and every route to market has already been saturated. I tend to avoid these suppliers where possible as you are one customer out of hundreds; if they mess up an order they are usually unwilling to be overly helpful.
The other option is to look for new companies that are fresh on the market and are hungry for new business. Not all the companies I deal with had any history of dropshipping in these cases you need a big juicy carrot to put in front of them. If you can clearly show that you can act as a new route to market for them this will usually get their interest. You can play the PPC card but this is nothing new and something everyone can do. If you really want to turn heads show them your rankings in the SERPS, if you can prove to them that you can help them sell more this will greatly increase your chances of building an ongoing relationship with this company.
You will still find many circumstances where companies just won’t play ball. But there are still options and like most things money will pay an important factor in your decision. If the potential margins are just too good to walk away from, then it may be worth researching fulfillment companies. The premise here is that you bulk ship your goods to them, they warehouse and dispatch the items when the orders come in. These companies again help to take a lot of the back end issues away from you, but they also have their downsides. Your money will be tied up in stock, there are additional charges and if there are more links in the chain there is more that can go wrong. If you are shipping from your suppliers to a fulfillment company who are then shipping to your customers, there are potentially a lot of place where you will find issues. But if there is enough of margin to make it worthwhile then this could be a very profitable option.
Many people think that affiliate marketing is a great way to start a home business, but I think if you look deeper into it you may just find that the idea of running an ecommerce site and using dropshippers can become very appealing.