Busting Common Drop Shipping Myths
Because the concept of drop shipping is relatively new
, most people know little about it, so they fill in the gaps with rumors and conjecture, resulting in misinformation of mythical proportions. In this article, I reveal the 4 most common myths, and then proceed to bust those myths.
Myth #1: Drop shipping means big money for little work
Sure it can save you from warehousing, inventorying, packaging, and shipping items, but those tasks play a relatively minor role in building a successful online retail business. You can now invest the time and resources you save on menial tasks in the retailer's labors of love:
- Market research
- Product research
- Advertising
- Customer service
- Developing more efficient ways of doing business
- Expansion
The truth is that even though drop shipping eases your workload in other areas, you still have to work hard to build, maintain, and grow your business.
Myth #2: All drop shippers will be happy and willing to work with me
Some wholesalers are happy to work with anybody, as long as that anybody can boost their bottom line by agreeing to one or more of the following conditions:
- Pay upfront fees
- Pay higher prices for wholesale items
- Order a pre-established minimum amount of product (typically per month)
- Pay a non-refundable application fee. (If they decide you're not big enough to work with them, you lose your application fee)
Myth #3: Making money with drop shippers is impossible
This method of buying wholesale thins your profit margins, but some of the internet's largest retailers use drop shippers exclusively as their product suppliers.
Pricing is only one small part of retail merchandising. I once sold a product in a very competitive market. The product had a mean price of $19.95 and an average return rate of 10-15%. I sold my product for $33 and had a return rate of 5%. My website also had a conversion rate about 2-3 times that of my competitors.
How can you sell a product for 65% more than your competitors, maintain a higher conversion rate, and yet still experience far fewer returns? Very simply--attend to all of the essential components for achieving retail success.
Myth #4: Drop shipping is the magic solution
It fills a specific need, but it's not a perfect solution for all retail merchants.
Think of it as only one powerful tool that can help your retail business succeed, and then note the following points to put drop shipping in perspective and maximize its potential.
You couldn't build a house with only a hammer, so don't rely on a single business tool to build your retail business. Research, marketing, advertising, your web storefront, and your creativity and drive are essential. Before jumping in, be relatively certain that your business will benefit from this type of supply chain management, and make it an integral part of your business plan.
by: Stu Wiseman
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