Set Up a Drop Shipping Business to Make Money Online

I have been writing about drop shipping several time in this blog but all the previous drop shipping articles haven't really cover the topic about how to start a online business using drop ship wholesale companies. So I write this article today to talk about this topic.

This article will not cover the basic info of drop shipping and how it works. If you are not familiar with drop shipping and want to get an understanding of drop shipping, here are several articles that can help you:

Make Money on eBay - Guide to Finding a Drop Shipper
The Advantages and Disadvantages of Using Drop Ship Wholesalers for Your Online Business

Now, let’s go straight to the meat.

To start a drop shipping business, you'll need to have a few pieces of basic equipment which include a computer, a printer, a telephone and a quality internet access.

Setting up a drop shipping business is different from other businesses start-up. You don't need to spend a big amount of money to get your drop shipping started since you are not required to invest money to purchase stock of your products.

There will be several steps you need to take to get your drop shipping business up and running. Here's How:

1) Create an online store or shop. There are many online shop builder programs available on the Internet; Yahoo! Site Builder is one of the programs you can use to build your online shopping mall or e-commerce site for selling your products.

Alternatively, you may choose to sell your products using eBay auction site instead of building an online shopping store. This is a simpler way of starting your business and you'll save web building and hosting cost.

2) Find a drop ship wholesale company that can supply the products you have decided to sell. You may check out the list of drop ship wholesale companies I created in my previous post to find one that match your business need. Or you may pay a fee to Worldwidebrands.com to get access to its huge drop ship directory that contains hundred of drop ship wholesale companies details.

When you find a drop ship supplier that fits your business, make sure you do research and investigation to see whether it is a reliable supplier before signing up to deal with them.

3) Once you have decided the drop ship company that you want to deal with, you may proceed to open an account with them.

4) Now, it is time to build up your online store or e-commerce site. You will be adding products images and descriptions provided by your drop ship company into your store. Alternatively, You may choose to create the products images and descriptions yourself, this will consume some of your time but it is worth it because it will distinguish you from other sellers who use the same drop shipper.

5) Set up a system on your site so that you know when an order has been placed for a particular product, and so payment can be taken.

6) Send the details of the customer order directly to your drop ship wholesaler. Once they saw the order, they will then bill you at the wholesale price that you both have agreed earlier. You pay the drop ship supplier bill and they will package the product and arrange to ship it to the customer on your name. In most cases, the drop ship supplier will provide labels which refer to the business or website where the order has come from.

As you can see above, setting up a drop ship business is not difficult, and if you done everything correctly, it should not be an expensive project.

However drop shipping does have a few of downsides you have to deal with. The main one is that you have no control over the inventory management so there is no guarantee that the products that send to your customers are always in perfect condition.

You have no idea of your stock availability. Problems will come when an order has placed by your customer but you later find that it is out of stock in your drop ship supplier's warehouse. Also you have no control over product shipping as it is completely handled by your supplier. So you won’t be able to offer fast delivery service.

However, if you are really interested to making money online with a drop shipping business, you should not let these barriers stopping you from venturing into drop shipping. With proper planning and good communication between you and your drop ship supplier, you can keep these potential problems down to minimum.