![]() As a result, merchants who drop ship are in a unique position to offer all sorts of products that the big-box retailers aren’t trying to sell because they’re deemed too risky. You can list an automatic shrimp-peeling machine on your website and if it doesn’t sell, the only thing you’ve lost was the time spent listing it. Walmart doesn’t know how well that product is going to sell so they’re not about to risk their money to stock it.īut what about online retailers who drop ship? Because online retailers who work with drop-ship suppliers aren’t buying any inventory up front and only pay for the product after it sells, they don’t have to worry about that same risk. That’s why you’ll often have a hard time finding really specialized merchandise like - let’s say an automatic shrimp-peeling machine- on the shelves of your local Walmart. In a traditional retail operation where products are purchased up front and in bulk quantities and then inventoried in-house, retailers aren’t going to risk purchasing inventory unless they are reasonably certain they’ll be able to sell at a profit within a short period of time. One of the greatest advantages of working with a drop-ship supplier is the freedom it gives you to experiment with selling all sorts of merchandise. ![]() And even then, the profit margins are incredibly slim.Īs you’ll discover in the next section, picking a niche to sell in is a much more sustainable strategy, as is developing product knowledge and expertise in your niche. When a large number of businesses and sellers try to sell the same product, competition drives prices down - often to the point where the only businesses making a profit are those who receive steep discounts for buying in enormous quantities, like big box retailers ( the aforementioned 800-pound gorillas of retail). The fastest way to fail in online retailing is to try and sell the same “hot products” as everyone else - like consumer electronics or name-brand clothing. Don’t Sell the Same Thing as Everyone Else Whether it’s product knowledge and expertise, service, packaged deals, free shipping, or something else, there are plenty of ways to command a higher price while still getting the sale.Ģ. ![]() So instead of trying to offer something for a lower price, look for ways to offer more and justify a higher price. If it were, Walmart would have a monopoly over the entire retail sector. ![]() ![]() The only businesses that can truly afford to sustain a “lowest-price” strategy are the 800-pound retail gorillas with the buying power of Walmart who can get the absolute best wholesale pricing on any given product by simply purchasing enormous quantities up front. If the only thing that differentiates you from the competition is price, you’re going to lose all your business and all your profits the moment someone else undercuts you and you find yourself on the losing end of a price war. The most common beginner’s mistake in drop shipping (and perhaps retailing in general), is competing based solely on price. In golf, it’s “Keep your head down.” In fishing, it’s “Keep your rod tip up.” In online retailing that uses drop shipping, well, let’s explore some of the techniques that work best with our top 10 tips for drop shipping success list: In just about any endeavor - whether you’re coaching someone in the intricacies of golf, fishing or, in this case, online retailing that employs drop shipping for fulfillment - there are time-tested tips that always work if the student is willing. This article was originally published and is republished here with permission from 10 Drop Shipping Tips that Lead to Success ![]()
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