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Introduction to Drop Shipping

You’ve probably heard of Drop shipping, it’s buzzing right now, A LOT. Everybody is talking about Drop Shipping and how to make money through it. We did a search on Google and found over 126 Million results on drop shipping. So, what is drop shipping and how does it work?

What is Drop Shopping:  

According to our friends at Wikipedia (the custodians of global knowledge), Drop shipping is a supply chain management method in which the retailer does not keep goods in stock but instead transfers its customer’s orders and shipment details to either the manufacturer, another retailer, or a wholesaler, who then ships the goods directly to the customer. As in retail business, the majority of retailers make their profit on the difference between the wholesale and retail price.

Identify a great Product to sell:

Sell something that people want. There’s no use in investing your time and money trying to convince people to buy a sucky product. That doesn’t mean chop and change products everyday trying to keep up with the latest trends. Luckily  for us there are a number of applications (Apps) that us in finding products to sell, e.g. Oberlo, Zakeke, Dropified, Drop-Ship SA [shameful plug]. These Apps can assist you in finding products and the cool thing is that you don’t have to commit to buying these products until you receive orders (payments) from your clients.

And that brings us to our second point:

Know your product

Know your product, do the research, know what it does and know its limitations. Don’t get us wrong, there are products that are popular and generally speak for themselves, like the PlayStation, however, if you’re going to sell it its best you know something about it so that you’re able to engage customer questions.

Know your supplier

Know the terms of your supplier and how long it will take for your product to arrive. Dollar rated[PJTPJ1]  suppliers[PJTPJ2]  can be tricky because our currency fluctuates rapidly against the dollar. You could set your selling price at Rand/Dollar exchange rate of R16, only to find that by the time you place your order with the supplier the exchange rate has depreciated to R17, leaving you in a loss position. Foreign suppliers also present the risk of high delivery costs, and long turn around times. It is better to manage your risk by dealing with reliable local suppliers.

Sell your Product

Sell the hell out of your product, punt it whenever you can, the thing will not sell itself no matter how great it is. Advertise to your friends, tell your friends to tell their friends, sell it on all your social media platforms. South Africa has a huge mall culture, and online marketplaces like Bid or Buy (bidorbuy.co.za), Takealot (takealot.com) and Hyperli (hyperli.com) are the new malls, so its beneficial to sell through them, and their readily available markets. Beware of the cost of advertising though, it will increase your business costs and thus reduce your profits, therefore manage your advertising budget and apply a combination of marketing technics to get your message across.