There are few lucrative business ideas that you can start with little to no start-up capital. But this business venture is very easy to get started and your investment could range from little to none. The business idea we are talking about – Drop-shipping.
Let’s look at how to start drop-shipping with little to no start-up capital.
How drop shipping works in three simple steps
Drop-shipping in simple terms is finding low-cost items and selling them at a higher price. With online retailers such as Amazon and eBay, and online storefronts such as Shopify, you can easily start an online shop with limited investment.
Step one – Identify a niche and products with low wholesale prices or that you can get cheaper elsewhere
Not all niches will be profitable. But, with a little research, you can identify top product niches on major retail brands that you are passionate about and can solve issues faced by your target market. Then identify products you can get lower than they are being sold elsewhere. This may be from wholesale suppliers, or simply buying from Walmart.
Step two – Choose your online selling platform
The popular ones are Amazon, eBay, and Shopify. They are already well-known and trusted across the world and they already have systems in place that make online retail processes easier.
Make sure you check the fees on your chosen sale platform to ensure that your margins are good. You need to factor in the platform fees, the cost of the items at wholesale value, and the price you intend to sell at.
If you have a little money to invest, then you can consider setting up your own online ecommerce store where you will have full control over your activities. And then you can use Amazon or eBay as one of your sales channels.
Step three – Start working at building and promoting your ‘store’s’ visibility
At the start, you will need to work extra hard at building your store visibility. Social media (and paid ads if you have the investment) are a great way to get this going. Once you get traction, then you can consider scaling your business to increase profits.
The process is simple – find a product, add it to your seller platform, and when your customer places an order, you then order it from the supplier and ship it to your customer’s shipping address.
Benefits of dropshipping
· Little to no investment to start
We know this sounds a little too good to be true, but that is one of the major benefits of the dropshipping business model.
Some selling platforms like Amazon have a flat fee for listing items for sale. Others such as eBay allow you to list a certain number of items before you need to pay any fees.
· No warehouse space requirements
One of the main issues with starting a retail business is lack of storage space and a lot of cash to stock inventory. Drop-shipping eliminates these challenges of warehouse space for inventory because you only buy products when a customer places an order.
Some issues to consider before getting started
Because you will be buying items in smaller quantities, you may not be able to get the best prices possible if you were a true wholesale buyer. Therefore, your margins will be lower because you can only offer these products at a price point before it is no longer feasible for buyers to choose your products.
Shipping costs may be higher to offset some of your costs using an intermediary company. If you use multiple dropship distributors, you can have a logistical nightmare if your customer’s order requires multiple dropshippers.
But, none of these costs are coming directly out of your pocket. And you can factor them into your sale price.
Ready to start a drop shipping business from home?
The power of the internet has made it easier than ever for anyone to start an online business. And many Jamaicans have already started taking advantage of dropshipping.
Once you get started you can scale as much as you want. This is easily achieved by building your own website to market your store and growing your email list. And when you’re ready to start making money, let’s talk about how to get paid in Jamaica easily.