Drop shipping is a way of selling goods where most of the logistical elements are done by a third party. Sellers also don’t have their own inventory, but instead rely on a wholesale partner that ships their sales directly to customers. This can be a great way of starting a profitable business with very little overhead. Choosing the right drop ship provider is a major element to overall success. These are some tips for evaluating a drop ship provider.
How Fast Can You Start Making Money?
When it comes to drop shipping, most people want to start generating an income as soon as possible. You’re going to be able to accomplish this by finding the drop ship provider with the most streamlined signup process. Some services are free to start, and might not even require a credit card. At the same time, you don’t want to sacrifice long-term functionality for a bit of ease at the beginning.
How Large Is Their Wholesale Inventory?
One of the main tenets of drop shipping is that you’re usually just rebranding a wholesale product and selling it as your own. In order to do this effectively, you’ll need to work through a drop ship provider that has a wide variety of wholesale partners. When you have more options, you’re going to be able to build a more unique niche, and also have the flexibility to move between products as needed. You’ll also want to have the option to source from smaller vendors, as this will increase the uniqueness of your site’s offerings.
What Margins Can You Make on Items?
Since you’re basically taking a wholesale item and selling it as your own, you need to pay attention to profit margins on each unique product in your store. You’ll only want to partner with a drop ship provider that makes it possible for you to make a decent return on your sold goods. Otherwise, you’re going to end up losing money on something that should be generating semi-passive income.
How Well Can They Accommodate Your Branding?
The whole point of starting a drop ship business is to build a distinct brand that features curated rebranded items. While you can also include some of your own products in your online store as well, drop shipping is all about selling a third-party product as your own. To make the most of this, you ideally want to find a wholesale provider that can match your personalized branding needs.
Do They Update Your Inventory?
When you’re running a drop ship business, you can control what’s in your store, but you don’t necessarily have control over the inventory itself. Some people will simply buy items in bulk and ship them out themselves to work around this issue. However, a true drop shipping setup will hold little to no inventory, and rely on an outside source to fulfill the item. In this case, it’s essential you have complete and constant communication about whether items are currently available. Otherwise, you can end up selling items to customers and not being able to complete the order due to a shortage on the supplier’s end.
Are Orders Automatically Fulfilled?
In terms of generating a passive income, nothing says it more than automatic order fulfillment. This is exactly the kind of setup you’ll want if you hope to do serious volume with your drop shipping business. Having to do too many manual tasks for an order can lead to you getting backlogged. When most of the process can be completed without any effort on your part, you’re well on your way to building a successful drop shipping site.
How Comprehensive Is Their Customer Support?
As with most forms of online business platforms, you want to have comprehensive customer support when seeking out the right drop shipping provider. You never know when something might go wrong. With so many variables that are out of your control when drop shipping, you need to work with a partner service that has your back and can get you back on track.
There’s a lot to consider when evaluating drop shipping providers. But taking your time to get the right one can make a huge difference in the ultimate success of your business.