How to Cash in on Drop Shipping

Drop shipping is the process of ordering goods at wholesale prices and having them delivered to customers after making a sale. This is different from the process of wholesale retailing, which involves ordering large quantities of goods, storing them in an inventory, and hoping that you make a profit by reselling them. Making money drop shipping can be quite easy, since you won't run the risk of purchasing a given product until you actually sell it. However, there are certain necessary considerations for those looking to maximize their profits while drop shipping.

Finding the Best Drop Shipping Supplier

When you start a drop shipping business, a large portion of your initial investment money will be spent on acquiring a membership with a drop shipping supplier. These are companies that provide lists of wholesale products, as well as their prices, in exchange for a membership fee. Generally, it is preferable to find a drop shipping supplier that charges a one-time fee for permanent access to their database of products. A drop shipping supplier that requires a monthly membership fee can prove more costly in the long run, diminishing your ongoing profits.

Some drop shipping companies offer additional services, such as a personalized Internet store with your own domain name, for an additional cost. These offers can be worthwhile, so long as fees are low enough to justify such services over selling your goods through a generic eBay store or Amazon store.

Choosing Products That Will Sell

In order to make money drop shipping, you'll need to choose products that will easily sell to customers. Many drop shipping suppliers provide lists of their best-selling products, and these can be invaluable resources for determining the types of goods that online shoppers are most likely to buy.

Here are some qualities to look for when choosing products that will be most profitable to sell through drop shipping:

  • Impulse Buy Value - Consider the likelihood that an average consumer will purchase your product quickly. Attractive items such as inexpensive jewelry, small consumer electronics (including MP3 players and phone accessories), and trendy clothing have been proven to make for quick sales. Consumers will be more likely to quickly purchase inexpensive items that don't warrant extensive comparison shopping.
  • Low Shipping Costs - Along with drop shipping supplier fees, shipping costs will represent one of your biggest expenses as a drop shipper. Look for items that are inexpensive to ship over long distances. Shipping carriers generally base their prices on a combination of size and weight, so larger, heavier items will cost more to ship than small, lightweight ones. It's easy to see why selling items from the latter category, such as watches and small electronics, can be more profitable than selling items such as heavy home appliances.