E-commerce business models allow entrepreneurs to successfully start their own business from the comfort of their homes. Entrepreneurs can earn money by selling products online. However, they need to spend money to have a warehouse to store their products and make arrangements to ship products to customers on time. All of this requires that you investing money and effort. Those entrepreneurs who do not want to invest in storage and shipping have a great e-commerce business model that solves their problem – dropshipping.
What Is Dropshipping?
Dropshipping is a convenient business model that allows entrepreneurs to offer products to customers without having to maintain an inventory. If you want to benefit from dropshipping, all you need to do is decide the products you want to sell and find a partner who can supply these products to your customers.
The process is simple. The customer visits your e-commerce store and places an order at the retail price. You take the order and pass it on to your supplier at the wholesale price, making a profit in the process. The supplier would then directly ship the product to the customer. It is an easy way to start a business as it requires a minimum investment and yet makes a profit. You only need to find the right products to sell and a trustworthy supplier to back you up.
Dropshipping Can Work For You
Dropshipping is the right business model, whether you are a novice or a seasoned businessperson. While all entrepreneurs worry about maintaining the right inventory, with dropshipping you can focus more on marketing and getting orders.
Dropshipping allows you to run an e-commerce business on a part-time basis. You can work in a day job and still run a successful e-commerce store. However, you need to spend time on marketing and follow-up with suppliers.
What To Sell Online?
It is important to select products that customers are interested in, are willing to spend money on, and that can fetch you a good profit.
Here are some guidelines that can help you decide what products to sell.
Look at niche solutions for your customers: There is no shortage of competition in the e-commerce business. It would be a bad idea to compete with them. Instead, look for niche products to offer your customers. These products should be those not easily available online. For example, if you plan to offer cosmetics you can consider selling vegan cosmetic products that are not easily available on all websites.
Decide on the pricing levels you want to offer: When you sell low priced products, you can expect higher volumes of sales. But, this doesn’t mean higher-priced products won’t sell. There would still be a demand for such products if you can enhance their value by offering extra benefits like support and other features.
Depending on the target market you want to service, you can decide the price levels. If you don’t intend to offer support, you can offer lower-priced products. You can also consider psychological pricing to attract customers, for example, pricing at $49.90 instead of $50.
Look for products with repeat purchase value: The best e-commerce business model is one that gets you revenue not from new sales but from repeat sales. Once a customer buys products from your website and likes it, you can then look forward to the customer making repeat purchases.
Remember that you need not spend much money on marketing to get existing customers to buy products again. So, select products that customers would buy repeatedly.
Choose robust products: Select products that are robust and will not break or spoil during the process of shipping. Products may be damaged during transit, and this creates a lot of problems. Not only do you need to replace the products, but you will also end up with an unhappy customer. It is, therefore, best to avoid such items.
Avoid these products: Common products like books, jewelry, electronics, and clothing are available on all the top websites. Almost every online retailer offers these products. Selling these products would be very difficult unless they have a unique characteristic that sets them apart from the rest.
Consider ePacket: An ePacket is one of the fastest methods of shipping products. This service makes shipping products from China or Hong Kong easy and fast. It makes sense to work with Chinese suppliers as their products are priced lower.