So you want to make money retailing products online at a great profit from suppliers who drop ship for you but you’re not exactly how to get started. Is that you? If so you should be aware of the two approaches most people take when launching their dropship business. One approach leads to success, and the other usually does not.
Going It Blind
This approach robs you of the knowledge you need to know to really be successful. Unfortunately, it is the approach that most people take when they first get started and then they wonder why they aren’t making money down the road. Sometimes they do make money, but it’s usually by accident. You get flash in the pan type of profits.
Very little, if any, research is done upfront to know what profitable demand exists to tap into. Going it blind is just a horrible way to start anything. This is what it looks like going it blind… You wake up one day and decide, “hey, I heard my friend is making a killing selling hot products on Amazon”, so you go to Google, find a supplier for the products, get approved and then start selling products on Amazon. A month passes by. You hear crickets. Nothing. No sales. You repeat the process thinking, I must sell more products! You find more suppliers. Another 2 months go by and a couple products sold by accident for $65 making you $15 in profit. It’s a far cry to where you want to be at financially. You start to believe dropshipping sucks and doesn’t work and give up. If you are going this route I suggest to stop immediately. There’s a much better and more effective approach.
Modeling After Success
This is the best approach to take. You save an immense amount of time, money and frustration. Modeling after success means you are leveraging the experience and wisdom your competitors have already figured out long before you came into the picture. Modeling after someone else’s success will catapult you forward to their level much faster compared to launching your ecommerce dropship business the blind approach.
This is where you research to find someone else online doing what you want to do and then duplicate the success they are having. This is called “modeling after success”. It takes some time upfront to research this out, but it’s worth it. One of the top 3 reasons why most people fail when launching their dropship ecommerce business is because they did not take the time to research the 5 fundamentals of modeling after success.
The 5 fundamentals of modeling after success:
1- Online Demand
2- Profitability
3- Competition
4- Consistency of Sales
5- Work with M.A.P. Suppliers
1- Online Demand
To be profitable it’s critical you sell products that people are actually looking for and actively buying every day on the internet. Not off-line at brick and mortar stores like Wal-mart, Best Buy, Sears, etc.. but online. How do you find this out. Thankfully there’s a free tool you can use to do this research which is called the “Google Keyword Planner” tool. You can access it inside of your Google Adwords account.
2- Profitability
When you choose a niche it’s very important of course to know that the products you are considering selling online can make you a health profit. I am to achieve a profit of at least $100 net profit at minimum each sale I make. A profit is different than online demand though. To discover your profit you will need to research out online the average retail price of the product. From there you can contact your supplier who will tell you your special wholesale price. Do the math, make sure to account for shipping and taxes where necessary along with any marketing costs and that’s your profit! For example: $600 retail – $400 wholesale – $40 shipping/taxes – $50 in marketing costs = $110 in net profit
3- Competition
If you want to win at any game in life you know how important it is to study your opponent. It’s no different with online marketing with your dropship business. Do you know who your competitors are? Do you know what products they sell the most of? The bottom line here is to learn as much as you can from your competitors. From there do what they do and innovate from there. Just be dumb enough to follow them to their level of success and then innovate from there. It’s amazing the answers you can find out simply by calling your competitors and asking them about what products sell best. Many times they’ll even advertise the best selling products on their website.
4- Consistency of Sales
If your goal is to make money every day all year long it would be wise to of course sell products that people buy year long depending on where and to whom you are marketing. If your products are seasonal, meaning people only buy them during summer or winter, etc.. then you can reasonably expect your profits will be lower during the off-season times of the year.
Choose a product that people are buying every day and you’ll be on the right track of producing a consistent income for yourself!
5- Work with M.A.P. Suppliers
A (M.A.P.) supplier is someone who has a contract in place for all retailers to agree to that required them not to advertise the product below a certain price. This protects your brand along with the supplier’s brand and helps avoid pricing competition battles. You can verify if a supplier has a M.A.P. policy by looking at the consistent low advertised price on any product you look up on Google Shopping. If you search for a product idea on Google shopping and you see that there are more than 5 sellers of that product advertising a Minimum price that is consistent, than you can usually assume that the Supplier has a MAP policy in place. Those are the suppliers to get approved with.
Summary
Take the time now to make sure you research out the information you need in the 5 top fundamental areas of choosing a niche. You’ll be glad you did.
Click here to book a Free 30 minute 1on1 coaching call with one of our certified dropship coaches. We can teach you exactly how to do your research properly and show you how to do things right.
I am looking to expand my Ebay business which I have had for a couple of years. Now I want to make it a profitable business with drop shipping but would like to learn how to find some niche products with a good profit.
Great goal Christine!
I would recommend setting up a call with me here:
https://dropshipxl.com/coaching-application/
Let’s talk
Thanks
Trent
I have just started dropshipping in Feb 2018.
1st was a fashion store which didn’t manage to get any sales in 2.5 months. Estimated spend $500. so i shut it down.
started a general store 2 weeks ago. sold 2 products. but cant seem to get moving any longer.
seem to be facing issue with:
1. product research
2. pricing
Considering if High Ticket Item will work better? since the majority of consumers nowadays knows products are from Aliexpress especially the cheaper ones and they can get them directly?
You’re right Davin. Customers can buy directly from Aliexpress. It’s more difficult to get repeat buyers but not impossible if you have the right sales systems in the place. It is far better though and more sustainable to create a high ticket dropship business.