Drop Shipping 101

Drop Shipping 101

A few days ago I bought a product by Sajan Elanthoor and Justin Opay. I wanted to know about the subject – Drop Shipping 101 – a business model I came across before but not quite sure how I could make it work.

Drop shipping 101

I’m into affiliate marketing all this while and am opened to learn about other forms of online business to add to my stream of income.

Drop Shipping 101, presented as an ebook, covers various topics on drop shipping as a business model and includes what drop shipping is, how one can start and scale up this business.

 

What is Drop Shipping About?

Does It Work?

Generally, as a marketer or seller, you buy products and then sell them at a higher price than what you bought it for.

Doing business this way usually requires you to buy stock in advance, manage the storing as well as handle logistics and shipping.

However, in drop shipping, the orders from customers are passed to the wholesaler who would then send the product(s) directly to the customer without you (the promoter) having to manage anything else, except collecting your proceeds.

Drop Shipping vs Affiliate Marketing

A drop shipping process seems a lot like affiliate marketing. However, the creators of Drop shipping 101 emphasizes that drop shipping is different from affiliate marketing in that you will not be directing your audience to another website (an affiliate site).

Affiliate Marketing vs Drop ShippingThis is the reason why drop shipping could be better than affiliate marketing as not sending your audience away to another website makes it look like you are selling through your website and enables you to gradually build your own brand.

Another claim made by the product creators is that there’s little risk involved with drop shipping business as you don’t have to put up money upfront to secure your stock. This reduces, if not eliminates any financial risks and deliveries are made to customers based on orders from your site.

The Lure of Physical Products

Drop shipping 101 product creators also claim that this business model widens the variety of products sold by marketers as they are not limited to selling just digital products.

Justifying this, the creators also added that selling physical products expands the target audience that marketers can reach out to.

The product creators also suggested that digital products may only appeal to the younger generation or those already using digital devices, like smartphones, kindle.

 

My Take

 

Pros 

  • I agree that if you work with a reliable drop shipping company, you could probably earn more than affiliate marketing because of the ‘keystone pricing’ concept used in drop shipping business. This means that you could be selling products at twice the price than what you paid the manufacturer.
  • Not having to re-direct your customers to another site will lead customers to think they are buying directly from you. This is as opposed to buying from an affiliate site, where you direct the customer to the wholesalers’ sites and that customer eventually buying from their sites.
    This would likely lead the customer to remember the wholesalers than the one promoting the product (you).
  • Drop shipping 101 includes ways to find reliable drop shippers and how you can use some of the recommended websites to identify drop shippers you want to work with.

 

Cons

  • I can’t identify with the statement by the product creators that drop shipping business carries no risk. To me, any form of business, be it online or offline would have some form of risks. In drop shipping, it certainly matters who your wholesalers are and a wrong choice might also cost you your efforts and money.
  • Drop shipping enables you to sell physical products rather than just limiting yourself to digital products. This is not entirely true as people engaged in affiliate marketing are also able to do the same with affiliate networks like Amazon and Shareasale offering various physical products for marketers to market and profit from.
    Thus, affiliate marketers also need not limit themselves to selling niche digital products and can in fact, expand their reach to those looking for physical products to buy.

 

Overall, I see this product as a great introduction to the world of drop shipping business.

However, whatever business that you choose to do online, I believe there are some issues that form the fundamentals for success in your business :

  1. Your target audience
  2. The product you choose to promote (to fill their need)
  3. Where to find your audience and how to market/sell to them

Undoubtedly, Drop shipping 101 purports to be comprehensive in introducing marketers to this business model. Personally, though, it lacks coverage on the above issues I believe are the core of success online.

Nevertheless, the product is a great introduction for those wanting to understand the basics of a drop shipping business model.

 

 

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