There are thousands of ways to start a home-based business. If you decide to sell physical products, you'll need to overcome the challenge of not having enough space for your inventory. The drop shipping business model eliminates the need to store products. Instead of products being shipped to you, and then from you to the customer, they are shipped directly to the customer on your behalf.
Drop shipping is simply a method of retail merchandising which removes the need for merchants to buy and stock the products they sell. There is an arrangement between the supplier and the seller. The seller displays the product in a mail-order catalog or on a website without having the item in stock.
Quite simply, the seller advertises the product at a price which is higher than his cost. The difference between the seller's price and the supplier's price is the seller's profit.
When a customer purchases a product, the seller contacts the supplier and places an order. The product is then shipped directly to the customer's mailing address.
In other words, the seller promotes the products and the supplier fulfils the orders.
Many marketers make the mistake of promoting a product which they think will sell, only to lose money because they haven't researched the market thoroughly.
The wonderful thing about the Internet is that there are multi-million dollar corporations which make their market research easily available. All you need to know is where to look.
You can get plenty of niche ideas for products to sell, for free, from eBay.
It's easy to establish supply and demand for a product with an effective keyword tool. Go to http://tools.seobook.com/keyword-tools/seobook/ and type in a keyword. The tool will show you the demand, and give you a list of alternative keyword suggestions. There are also direct links to many other search tools, with your keyword already filled in. Scroll down to the bottom of the keyword listings to see links to blogs, directories, news services and many more.
One of the search tools you'll find (on the right hand side of the page) is Google's Traffic Estimator, which show you how much people are paying to advertise with your keyword. If there are no paid advertisements, there may not be enough of a market.
Under 'Classifieds, Products and Reviews' after the keyword listing you'll find a link to eBay Pulse which shows you what's selling on eBay at the moment. You can drill down into categories and subcategories to find what's selling in your niche.
Reliable drop shipping suppliers are, of course, essential to this business. Here are some things to look for:
1. What shipping methods do they use?
2. Do they charge a handling fee for each item?
3. How do they handle returns?
4. What is their track record?
Finding drop shippers is easy - just go to Google and type in "drop shipping" + the product name.
Drop shipping is a terrific business model if you don't want the hassle of storing inventory and dealing with fulfilment. You need to identify a hot market and decide on a reliable drop shipper before you start your drop shipping business.
Find out more about running a dropshipping business
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