Drop shipping

Tyler Batty, Ken Frei, David Andrus, Travis Collette, Miguel Garcia, Jordan Calder

What is Drop shipping?What it is

Choosingproducts

Partner criteria

Good sources

How to start

Risks and rewards

Questions

How do I choose the right product?Google search: Google Adwords Keywords Tool

What it is

Choosingproducts

Partner criteria

Good sources

How to start

Risks and rewards

Questions

How do I choose the right product?What it is

Choosingproducts

Partner criteria

Good sources

How to start

Risks and rewards

Questions

Google Search: Alexa Toolbar. Google Toolbar.

What makes a good drop shipper?

• Blind drop shipping

• Fast delivery

• Reliable

• Low, wholesale prices

– Can join groups to get better prices

• Drop shipper comparison site:

– http://www.dropship-review.com/criteria.php

What it is

Choosingproducts

Partner criteria

Good sources

How to start

Risks and rewards

Questions

What are good drop shipping sources?

Middlemen:

- Doba

- Worldwide Brands

Aggregators of drop shipping companies:

- Gogodropship

- Dropship direct

- True Dropshippers

- Salehoo

- Dropshipping Wholesalers

- Dropship Access

- Shopster

- Hienote

• Warning: Niche products, aggregators, competition

What it is

Choosingproducts

Partner criteria

Good sources

How to start

Risks and rewards

Questions

How do you start selling?

• Building a website:– Select a name for your

business

– Apply for a merchant account

– Develop a marketing plan

– Customers order products

– You order from your supplier (or tie directly into their system for automation)

Using eBay or Amazon:– Optimize the title for

eBay/Amazon search engine

– Update products frequently

– Customer order/supplier notified

– Supplier ships product`

What it is

Choosingproducts

Partner criteria

Good sources

How to start

Risks and rewards

Questions

Risks and rewards of drop shippingRisks• Difficult to drive demand for niche products• Your reputation is in the hands of your vendors

(you are ultimately reliable for lost, broken, and wrong product orders)

• Thinner profit margins (unit cost higher than if bought in bulk

Rewards• No inventory investment• No order minimums• Time shift from packing/shipping

to promoting and selling• Decreased risk

What it is

Choosingproducts

Partner criteria

Good sources

How to start

Risks and rewards

Questions

Questions?

Appendix• -- From personal interview with Jeremy Hanks, Founder and CEO of

Doba:•

- Finding quality drop shippers takes a tremendous amount of time. People can do it if they run it like a real business and invest the time to understand the landscape. However it takes weeks of digging and searching to find the right information. (“That’s why we make money…” ;-)

• - In order to be successful selling online, you have to find very niche products that offer higher margins. Don’t go online and just sell stuff because you can, you really have to find a small niche and own it.

- Running an e-commerce store is not just simply throwing up a website and hoping for traffic/success. It is truly an investment of time and resources and you will only succeed if you run it like a business. The more success you have, the more time you will have to spend running and growing and maintaining it.

Appendix

Building your own website:

1. Select a name for your business. Apply for a DBA (doing business as) name through your local county office or city hall. Use your fictitious business name as your DBA.

2. Create a website for your business for greater exposure. Apply for a merchant account through your bank so you can take credit card orders from customers.

3.Develop a marketing plan for your drop ship web store. This may include launching a promotional blog to connect with potential customers, setting up social networking accounts, placing ads on websites and blogs your target market frequents and listing your web store in online shopping directories.

4. Order products from your wholesaler or manufacturer supplier when customers order products through your website. Print a self-addressed shipping label that contains each customer's name and address. Mail the shipping labels and order forms to your wholesaler so it can drop-ship products to your customers. Pay your supplier the wholesale cost of the product plus any shipping expenses.

Appendix

Determine if the products offered by the drop shipper will sell on eBay or Amazon for a profit. Perform side-by-side research during this phase. Look through the supplier's catalog for product ideas, then check eBay or Amazon and determine if the same types of products are selling and at what price. This phase may take several weeks, so be patient and persistent with your research.

Optimize the title for the eBay/Amazon search engine, once you have identified a product that sells at a profit on eBay/Amazon. Drop shippers and wholesale suppliers give products a name that makes sense to them. The title is not meant for optimizing keyword searches on eBay/Amazon. For example, the product catalog may list an item as "Green Mountain coffee case pack." To optimize your placement in eBay/Amazon searches, you might use the title, "New Green Mountain Breakfast Blend coffee case 3 lb. bags." Take the extra step to rename the item with popular keywords.

Update products frequently. Do not assume that because a product sells well today that it will still be selling well in six months. Continue to research new products to add to your eBay/Amazon inventory. Brick and mortar stores change inventory frequently depending on the seasons, fads, or celebrity trends. Online sellers must also update products to continue to make sales

Appendix

Disadvantages of Dropshipping for eBay and Amazon

• Lack of control – When you dropship, you are at the mercy of the shipper. They control the packing and shipping experience. If they pack and item improperly or take too long to ship, the customer will blame you –not the dropshipper. Poor service from a dropshipper can negatively affect your customer satisfaction ratings on eBay and Amazon.

• No control over inventory – If a dropshipper fails to warn you about their low inventory level, you may sell an item that they cannot deliver. This puts you in a very bad position with eBay and Amazon. If it happens too often you could find your account suspended or closed.

Appendix

Advantages of Dropshipping for eBay and Amazon

• No up front investment in products - When you sell dropshippedproducts, you don’t pay for merchandise until it sells. This eliminates tying up money in inventory.

• Eliminates risk – If something doesn’t sell, your only risk is the listing fees

• Product depth and variety – When you buy products to resell, you are limited in the number and type of products you can sell by the amount of cash or credit you have to purchase. When you dropship, you can list many more products for sale

Appendix

How Drop Shipping Works:

http://www.doba.com/how-dropshipping-works

• The Google Keyword Tool: This tool allows you to search different keywords you’d use for a product and see how much that phrase is being searched locally, worldwide, or based on whatever parameters you set. In addition to this, it also lets you see what the competition is for a certain keyword. If you want to get real technical, you can check out the Google Keyword Trend tool which allows you to see what the demand for your product is across all the months of the year. this is good because you may not want to choose a product that only gets searched a few months out of the year.

Appendix

• Alexa Toolbar: Here you can look at your competitors Alexa Rating which basically ranks all the web pages in the world from most traffic/ visits to least traffic/ visits among a few other things. This is helpful in order to see if the product you have chosen has competitors that are highly ranked by Alexa in which case it will be more difficult to compete with them as far as search results go and often times price.

• Google Toolbar: This toolbar allows you to see what a websites page rank is. This scale is from 1-10. any page with page rank is good, but very good pages will have a 3-4. Same concept as above, this allows you to see what your competitors for a certain phrase that’s associated with your product are ranked and how difficult it will be to make the front page of google.

Drop shipping

Tyler Batty, Ken Frei, David Andrus, Travis Collette, Miguel Garcia, Jordan Calder