Introduction to Dropshipping
By Chris on Jun 20, 2006 in Earning Money, Entrepreneurship, Hints & Tips, Online
The foundations of my latest, somewhat charitible, business venture lie in a business model used by a number of entrepreneurs on auction sites like eBay. Dropshipping is basically where you sell stock for a wholesaler; taking advantage of their infrastructure to sell goods. The Dropship supplier provides the product, the postage packaging (usually unbranded), the warehouse storage and the couriers. You provide the customers and, to a degree, set the prices.
When you signup with a Dropship supplier, you get to buy items from them at a discount. Different suppliers give different discounts, but it can be as much as 60-70% in some cases. The benefit of the Dropship model is you get to sell the item first. How great is that? The traditional retail method would be to buy some stock, store it, then try and sell it. With Dropshipping, you can sell first and have the supplier deliver directly to your customer(s).
The Dropship operation I work with are TheSelect.co.uk - these are who I am using for England’s World Cup Glory, and who I used for my short-lived eBay business. They are primarily UK-focused, though they do ship internationally (at somewhat high rates).
The way it works is like this:
- Sign up as an “Agent”
- Pick some products to sell
- Advertise them/list them on eBay
- Get the money for the items you do sell
- Order the items from TheSelect.co.uk, putting in your customer’s address in the shipping details.
- Repeat.
The trick is, of course, anticipating what people will want and getting the word out. Most dropshippers use eBay auctions. This is an OK way to go, but you can get stung by fees and are always running the risk of selling below the price you buy the stock at (unless you specify a reserve, which I don’t recommend). I’ve had more luck with direct selling - a targeted website or even a classified ad in a newsletter or newspaper. I’m sure selling to an existing customer email list would work equally as well.
The reason I chose TheSelect.co.uk was becasue they offered a number of different “Agent Packages” to suit. The basic “Bronze” package has a one-time joining fee, after which you are free to sell their products as you want. “Silver” status lets you refer people to their website using a system not a million miles away from affiliate links; this offloads the payment handling to TheSelect, but means you can’t set your own prices. “Gold” level offers the same functionality as silver, but also allows you to choose one product from a special range to exclusively sell - no other Agents can sell that product. Both Gold and Silver packages have low monthly subscription fees in addition to the joining fee. I currently use the Bronze package, and you can upgrade at discounted rates at any time.
So there you have a quick introduction to Dropshipping. If anyone is interested in getting started with TheSelect, leave a comment and I’ll get in touch - as an existing agent I can sell you an Agent package at a discount.
.
Dave G | Jun 28, 2006 | Reply
Nice that you have discovered drop shipping! I looked at theselect a while ago but in the end opted for ATS Distribution. Many more products, including LOADS of world cup stuff.
I don’t sell all their stuff though, just the water items that I list on waterutopia.com.
The best advice which is worth having is DO NOT buy drop shipping company lists. They are a waste of time. Instead, hunt your own down like you have, or do what I am currently doing and talk to local suppliers. I have almost struck a deal that means I will be the largest online retailer of fishtank and pet products in the UK :) Which is nice :)
Keep up the great work!
Dave
http://blog.brightonvibes.com
Justin | Jun 28, 2006 | Reply
I agree with not buying lists, but have found sourcing to be a daunting and difficult task. Does anyone have suggestions on how to locate drop shippers? Or sourcing products at all?
Chinese products are great, but you have to warehouse them. Dropshippers come in all types, with all sorts of fee structures, and ususally the most prominent on the web are the types with low margins and high fees.
I would like to know how to find the better dropshippers, the ones who are farthest away from the “affiliate” types.
Also, I am in the USA, so UK are not good for me unless they have an American warehouse. (But post anyway for other readers!)
Rachel | Sep 16, 2007 | Reply
Hi
I’ve been looking at The Select myself to sell through eBay. I’ve bought watches etc and tried selling them but with absolutely no luck. I’m really just trying to make my bank balance a little healthier looking rather then being in the red every month like a lot of people I suppose. I work full time and don’t have time to get a second job but could do with a few extra pounds for Christmas, plus I’m getting married next year so could also do with making some cash to put towards that. Would you recommend The Select and aslong as your picking the right product to sell…can you make money?? Sounds like a daft question but I’ve tried so many things where I have to pay out first and always ended up beind disappointed.
Please let me know if it’s really worth it…hope to hear from you soon.
Rach :o)
Manny | Sep 27, 2007 | Reply
Hi, I’d like to use dropshipping to start and came across the select. Is it any good I would be interested in joining and I would be greatful if you could get back to me as the discount would come in handy as money is short. Thanks kind regards,Manny
alex | Nov 20, 2007 | Reply
hi chris, could you please get in contact regarding Theselect.co.uk agent packages, thanks
alex
John | Jun 11, 2008 | Reply
You are right to suggest that dropshipping lists are a waste of money. Instead I found a site that provides a free list including user reviews at dropshippingforum.co.uk. I just signed up to two dropshippers from the list!
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