The regular retail market has seen a huge slump over the past few years due largely to the popularity of online shopping. The bigger brand retail players have adapted quickly to include eCommerce platforms to their existing store fronts worldwide to capture the online shoppers market.
However, the price competitiveness between popular brands (with store fronts) and regular wholesalers is still pushing consumers towards the latter since they offer a wider range of merchandise with competitive pricing and convenience (free shipping, quick delivery, etc).
This has spurred enterprising home online business entrepreneurs to start their own eCommerce stores retailing clothing, electronics, household items, and many more.
Many people are jumping onto the bandwagon, but are not exactly sure how to get started. Most wonder where to source for products, which wholesaler to connect with, how much stock to keep, pricing their products to sell and the most critical of all; finding a product that sells.
There is inherent risk of losing money if you get one or all of the other components wrong. You risk stocking items that don’t sell, getting involved with wholesalers that are unreliable (fail to ship on time, delay or don’t deliver to customers) and end up with a poor customer experience which will affect your long term online reputation.
An alternative that can be equally if not more lucrative to consider is to start a drop shipping eCommerce business instead. This is basically an arbitrage business model, where you list products that you buy from a supplier (or wholesaler) and resell it at a higher price (after an order is paid for by your customer).
This way, you do not hold any inventory and run no risk at all if the product doesn’t sell. You can virtually list any product you like as long as you have a source (supplier with stock), and its resale price is competitive according to market supply & demand.
When you get a paid sale, you simply order the product from the wholesaler or supplier, make payment, provide your customer’s shipping address to them and the fulfillment is done on your behalf.
One of the most popular drop shipping platforms drop shippers used on the market is eBay. I tried it out myself and within a couple of days, I got a sale which made me a nice little $100 profit after fees and commissions (charged by eBay).
I showed my VA how to do it and she’s been scaling it up for me since.
Here’s a rundown of how you can easily get start a drop ship online eCommerce store and make some extra income on the side.
1. Sign up for an eBay account (US domain) –
Regardless of location, your objective shall be to sell global instead of restricting your online business locally and the only way to do that is to do it on the US platform (ebay.com). You also improve your product outreach globally instead of local.
Certain products may not be available in one country (latest launches or release), e.g. iPhone, tablets, android smart phones, so it makes sense to list these products to sell to customers in those countries (global listing). You could potentially make a “killing” since customers who can’t wait for the product to be available in their country, and as such are willing to pay a premium over the recommended retail price.
2. Using eBay’s online presence –
One of the main advantages of using eBay as your online store front is that you shorten all the effort to promote your own online store. With eBay, as soon as an account is created, you already have some level of credibility thanks to its strict listing and customer protection policies.
With your own online store as a new seller online, no one knows about you. You’ll need to put in work and time to design your store front, promote your store to your target market, send traffic, create payment gateways, manage inventory, work with fulfillment companies and many things you might not be aware of in running your business.
With eBay, you have thousands of eyeballs right away (if you list your products correctly) with a really good chance to make a sale within a reasonably short time.
3. Find a supplier for products –
Some of the most popular products and suppliers can be found on Amazon, Home Depot, Target and even some established (reputable) wholesalers from China that has warehouses based in Europe and the US. Most of these wholesalers’ offer free shipping and orders are processed within the same day (sometimes a day or so longer).
Some of the most popular items to sell are household items, DIY kits, electronics, computers & accessories, baby products, etc. If you have no clue or whatsoever, you can use SaleHoo to find popular products (with low competition) to sell, determine trends, connect with wholesalers or suppliers, and get free tips & tricks to scale your business for more money.
There is a $67 annual fee to access their market analysis tools but well worth the investment. There is a 60 day money guarantee if you are not happy with the service.
4. List your products –
A new seller on eBay usually doesn’t have as much credibility or a track record with eBay or with customers; as such their listing may not be ranked when searched. eBay’s search result algorithm is like Google’s but with more emphasis placed on the seller’s track record, and customer review scores (high positive feedback).
You would probably ask how do I overcome that and get my listing searched more easily when I just started. As a start for a new seller, there are a few things you can do.
One of which is optimizing your product listing headline. Similar to search engines, your product listing titles must be keyword optimized.
Let’s use the following example for an iPad Mini as our example.
A generic search for iPad Mini had 272,883 searches which is extremely competitive to rank. Depending on your item specifications, how eBay listing works is you might want to include as many keywords that people are using to search for the particular version of your iPad mini listing.
There is a very useful, free online tool call title builder which helps you generate a list of the most popular keywords customers used to find products on eBay.
Enter a 3-4 word keyword of your item; let’s say “iPad Mini 16GB” into the search bar. This will generate a list of the most popular keywords that are frequently used.
It will also generate a sample listing title to the right.
If you’d like to use the suggested title, simply copy & paste into your eBay listing title box but make sure to adjust the keywords a little by reviewing the results and pick the most popular words to use because there is an 80 character limit.
Once you have optimized and published the listing title, your listing will now show up ahead and of other listings that are not optimized. It will now show up higher during searches that contains the popularly used keywords and help buyers find your listing which otherwise might be buried among thousands of other listings of the same product.
5. Submit the URL of your listing to Google –
Once you have published your product listing, copy the URL and submit it to Google for indexing immediately. This will help make sure your listing to start ranking when a search is made.
This is in addition to the spillover effect of eBay’s already highly ranked eCommerce platform and of course your optimized title of your listing.
6. Be selective of what you sell –
As a new eBay seller, you have a 10 item listing limit. This is to help eBay assess your credibility, customer service, and capabilities to fulfill all orders to your customers.
This includes communicating with your customers on questions of your products, timely product handling (process for shipping), updating tracking information, product quality and replying to any emails in a timely manner.
With this in mind, you will need to selective of what you list to sell. Listing popular products that are $50 or less with competitive pricing (compared to other same product listing) to make your first sale will help you can go through the entire fulfillment process.
Once you have completed your first sale, processed shipping and the order is delivered to a satisfied customer; make a call to eBay and they will gladly consider increasing your listing limit after asking you a few questions so you can list more even products to sell.
The more you are able to list, the higher chances of getting sales, and eventually increase your revenue month to month, year to year.
There are many other ways to start an eCommerce business or an online store but an eBay drop-shipping business eliminates all the risk that is involved with one that requires stocking inventory. You only need to monitor communication with your customer (which is the most important), ensure your listing is “stocked” and be constantly on top of things of your eBay online store.