Section II - Introduction to DropShipping

Section II

Welcome to the second part of this 5-part
course on dropshipping and how to use it
to your advantage. In Step 2, we discuss
how you need to analyse your market and
select products that you can successfully
sell.


If you are already in the retail business,
you may be thinking, "My product selection
is done. I can skip this section." Well,
you are right that you have already made
your decisions but, every business owner
should, on a regular basis, step back and
look at how well they are doing, how they
can improve or expand and how well their
overall business strategy is working.
This section is all about matching products
to market and pursuing a successful business
strategy.

Let's focus first on those who are just starting
out and trying to figure out how to get into
business or how to expand their Internet business.



Product Selection


The task of figuring out which products to sell, on a
drop ship basis is difficult to separate from the task
of selecting a drop ship supplier; the two tasks operate
together. For the moment, however, we'll focus on the
product side of the equation.


Narrow the choices

If you truly do not know what you want to sell, you
have a big universe of products to select from. It is,
of course, possible, to search for any available product
at the right price that you can resell. There are
certainly plenty of people on the
Internet using that strategy right now, but it's
not a very good strategy for success. Here's why.


Some wholesalers, distributors and scammers advise
you to select items from their enormous catalogues,
advertise the items at a marked up price on your
website, take orders and payment then transmit to
them for fulfilment. (You'll find some of these operators
lurking in the "Make $20,000 a month working from
home..." ads found throughout the internet.)


And ... there are many, many get-rich-quick wannabe
entrepreneurs doing just that. If you follow that strategy,
you will be competing with hundreds or thousands of
others being supplied with the same products at the
same wholesale price. That's an uphill battle. Plus, if
you are choosing products based only on the possible
mark-up available, you may not know enough about
your marketplace to sell that product effectively.


If you are just entering ecommerce, take the smarter
approach and narrow your choices a bit more. For example,
you may prefer to focus on medical products because you
have a medical background or you have an excellent
on-line market niche through your participation in
disease-specific chat rooms. Or you may want to sell
sporting equipment because you're a former athlete
and now a coach and you can write terrific articles on
sports that will draw people to your site to buy products.


Think about your market

Think about a market niche that you believe you can
sell to (because you understand the market, you have
access to the market, etc.), e.g., soccer moms, the elderly,
people who travel internationally, high income pet owners,
people with arthritis.
Then think about that market's needs and how you
might be able to meet those needs with a product or
products. For example, high income pet owners tend
to treat their pets like substitute children by purchasing
clothing, accessories, toys, gourmet foods, etc.
You understand what these consumers want to buy
because you used to work for an exclusive pet boutique.


Speaking of markets, it is usually wisest to begin your
business by appealing to a defined market niche.
It can be difficult to put up the resources to appeal
to the general public in the beginning.


Now you know something about the products you
want to sell. Next, you need to find those products,
available through drop shipping, at a wholesale
price that can be marked up and sold successfully
at a profit.



Determine wholesale price opportunities


Get a feel for how much you will pay for the product
you wish to sell. You will have to contact suppliers
and negotiate price. We'll talk more about developing
that relationship in Section II.


Do the competitive analysis!!!


This is where the rubber hits the road. In order to
perform a competitive analysis, you need to figure out:


How much it will cost you to sell the product


How you will need to price the product to cover costs
and enjoy a profit


How your price compares with others selling the
same or similar products


Who else is selling and how they are doing


How you are going to sell this product more effectively
than your competitors



If, at the end of your analysis, you believe you can sell
this product to your targeted market at the right price
and the right quantity to meet your business goals,
you're ready to establish a relationship with a supplier!



What have you learned?


By the end of this section, you should know:


How to decide which products to sell with the
recommendation that you select products for
a market you know how to access


How to analyze the business case, for your product.
In part 3 we will look at the supplier side of dropshipping.

To our success working together.