Total novice needs help with dropshipping advice!!

[Julee]

Morning all

As u may have guessed from the title ive been looking into trying to start a dropshipping business online!!

I've looked at alot of courses relating to this subject but they want alot of money to attend and im not sure if its just a scam!! Ive checked out youtube videos but im just not that tech advanced to do anything they advise!! I could buy a store from aliexpress but im not sure if their reviews r real??

Quite frankly im feeling abif over whelmed by all the different information I dont know where to turn!! Came across this website after looking around various others forever and getting no where!!

I need help advice with literally everything!! From how to start a site to where to source products from to is it even worth it??

So help me out guys please!! Im not looking for a get rich quick scheme!! Even if I only make a tiny profit thats gud enough me
........just to day I did it!!!

Any mentors out there?? Wanna help me would appreciate it!!

Thanks alot in advance guys

 

[wayzgoose]

You're going to need a website obviously but first I would decide what you're going to sell. Get Googling, not just for dropship suppliers but also wholesalers that may work with you.
Until I decided on the line I would go with, I had all sorts of sites. One selling pet tags was particularly successful and even though there were many others doing the same we just did it better!
I wouldn't bother with Shopify or the like but that may be ok for you. With the right hosting you can learn to install something like Opencart and be up and running in a couple of hours.
Basically it's just research at the moment - not for courses, just do it, it's the best way to learn.

 

[Mr D]

Pick something with enough profit.

You will have customers claiming item arrived damaged. You will have customers claiming not to have received their item.
In each case you refund them in full - which leaves you out of pocket by the postage.

Dropshipping tends to be higher price than other retail. You will buy at a higher price than a retailer and will pay higher postage. So either accept low profit or price to cover a decent profit.

Be a good idea to use a site where you can access real time or daily update of stock levels. And take stuff with low stock off your site.
Annoying to get a sale and find you cannot get the item.

Some people make money at dropshipping. It is however the easiest retail to get into so a lot of competitors.

Oh and if / when we have another large scale lockdown of businesses check whether your supplier is still operating. Back in March a bunch of businesses immediately shut shop for some weeks. That weren't required to close.

 

[wayzgoose]

and will pay higher postage.

Not always. Our biggest supplier charges £2.20 2nd class and £2.90 1st class for standard parcels.

 

[Mr D]

Not always. Our biggest supplier charges £2.20 2nd class and £2.90 1st class for standard parcels.

I sit corrected.

 

[Julee]

Thanks for all the replys guys

 

[Lucky8]

Basic question here - has dropshipping become an alternative way that mainstream manufacturers distribute, or is there only a category of "drop shippers" out there, and you only have their products to choose from?

 

[Mr D]

Basic question here - has dropshipping become an alternative way that mainstream manufacturers distribute, or is there only a category of "drop shippers" out there, and you only have their products to choose from?

There are some wholesalers who dropship too, there are some companies set up simply to dropship.


Tends to be quite an effort for a wholesale supplier to add dropshipping. Its a different way of selling, its a different amount of selling.
Do you set things up to sell orders by the pallet with minimum order £900 or do you set up to do lots of individually packed orders at £10 each?
To get the same level of sales may require 3 or 4 additional staff members and more hassle with postal sacks and collections.

In my experience you find far more suppliers that retail for themselves than those who add dropship to their selling methods.

 

[Lucky8]

Hmm, thanks. So let me ask this another way. Let's say I want to set up an online shop with, let's say 100 products from 30 different manufacturers. Let's say the average item value is around £30. I don't have the budget to buy all the stock and store it. If drop shipping isn't the answer, what could be?

 

[Mr D]

Hmm, thanks. So let me ask this another way. Let's say I want to set up an online shop with, let's say 100 products from 30 different manufacturers. Let's say the average item value is around £30. I don't have the budget to buy all the stock and store it. If drop shipping isn't the answer, what could be?

Buy stock you do have the budget for, sell that, reinvest the profits into buying more stock and wider range and so on.

Your choices are basically own the stock and sell it or sell the stock and dropship it.
2 different business models with different risks, different profit margins, often different suppliers.

 

[iDigLocal]

Ignoring the website side of things (which is obviously very important) the best place to start, once you have decided on a product category is to approach the manufacturers that sell those products.

Ask them about prices and MOQs. and start building a relationship with these as in the future you may will want to go directly through the manufacturer. If the product value and associated MOQs are too high ask them about UK distributors and get a contact from the manufacturer. Then approach the distributors.

Some of these will do dropshipping, ones set up for that a lot of them will have daily stock feeds.

As pointed out it can be problematic if they no longer have the product in stock. If they don't this is difficult as you will have no control over when they restock. If the item is common then generally they will always have stock, if not then you can have issues and you have no control over the supply.

You can reduce the risk of this by having several accounts with different distributors, i.e. one doesn't have stock but the other does.

Postage/shipping costs is always the killer really. With dropshipping though these costs can be quite low as the distributor will have enough weight to negotiate good terms with their shipper. But if you have an order spread across several dropshippers then you will have to pay multiple shipping costs.

You can also usually ask them to include your packing slip in the shipment and leave out their details. You want them to send it out as white label as possible and work on brand indicators with the shipment.

when it works dropshipping can work really well but the lack of control and reduced margins is what makes it always less than ideal.

 

[Lucky8]

That's very useful information, thanks iDigLocal. It sounds like you have done this?

 

[iDigLocal]

That's very useful information, thanks iDigLocal. It sounds like you have done this?

We deal a lot with e-commerce and over the years we have built up quite a lot of knowledge about it. Being able to help clients with their websites is one thing but without understanding the ins and outs of e-commerce it is not very helpful.

We like to understand what our clients business model is, so we try and ask a lot of questions. This in turn allows us to pose questions to new clients as we don't like taking money from people if we think they haven't thought about what they are doing.

A lot of people come into the notion of having a website as if "it is there people will come" and spend money and they will make lots of money. Unfortunately this is not the case, its just the tip of the iceberg.

 

[Lucky8]

I see, you're the web designers. Good to see you have digested the business your clients are in. Anecdotally, have any of your clients started from absolute scratch on this then? Because of budget, begin with drop shipping across a range of good quality items in the way I described?

I have to admit, when I have taken a look at dropshipping distributors, the products have tended to look very cheap. That might be the distributors I have come across. I am looking at established manufacturers, some household names, good quality (not luxury, it's not that kind of product set) products.

 

[iDigLocal]

Well yes it is possible to start from scratch. The issue is that there is a great deal of variation in how long it takes to actually start making money. I would not suggest you quit your day job until you have things in place and you are collecting orders for a sufficient amount of profit. But with little money, patience and a lot of attention it is possible. You should probably head into it with the idea of 1yr+ to start making a profit.

How long it takes depends on your products and also your competitors (ignoring margins). If you are selling something quite common then you are likely to have a lot of competition to get your page up there in the rankings. New/niche is a better starting point, if you are catching it on the upwards curve. If your selling TV's, for example, well the question is where would you start if you are just online. You would have to throw so much money at that to get a foot hold.

There is an advantage for going for quality, less returns, less support issues all of which will effect your profits. But this does somewhat depend on what you are selling. Its more important for high value items.

Have a look around at who your competitors are and see if there is an opening. Decide on how you are going to differentiate your brand.