What commercial margins can be obtained with Drop Shipping

What commercial margins can be obtained with Drop Shipping

Profiting with dropshipping can certainly be a good economic opportunity if you are looking for a particular online business model that lets you sell products without owning them directly..

Is it so easy to sell in DropShipping and collect good money?

Surely not easy and immediate, but if you have good ideas and a lot of effort you could achieve excellent results.

First of all it is good to do some simply reflections.

Dropshipping is open to everyone!

Everyone, without particular requirements, can wake up one morning and with a few euros set up an activity from nothing. And it is precisely for this multitude of "competition" that the risk is around the corner.

The main dropshipping suppliers know each other! Just ask Google and the results are obvious;

but if we sell the same products in a hundred, which of us will win?Ognuno inizierà ad abbassare il prezzo di vendita per avvantaggiarsi sugli altri ed il risultato quale sarà?

Lots of sales but minimum margins, close to zero, or a lot of work for nothing!

Of course! As I told you before, selling in dropshipping is still a business, a real business.

If you sell a smartphone of € 600.00 and you have earned just € 1.00 from your sale, do not think it's over there! Your customer will contact you one or more times before the purchase even after the purchase to the slightest problem, or maybe for advice on how to configure it. He has spent a good amount and in spite of your earnings he will claim to be served and revered. Can you blame him?

So what to do? Do you want to spend whole days working on the PC to earn a few euros !?

This is not business!
What did I tell you before? you need good ideas and a lot of effort and above all you need to make the most of your time. It makes no sense to minimize your profit, your time is of great value and if you are using it, it is right for you to profit from it.

First of all, you begin to understand how you can differentiate yourself significantly from others, and here you can facilitate the task by showing you two diametrically opposed schools of thought.

DropShipping: make profits with the "Ndo cojo cojo!"

You think I'm joking, are not you? Yet thanks to the "law of large numbers" there is someone who thinks that "as the number of tests done increases, the value of the frequency tends to the theoretical value of the probability".

Ok, I try to explain myself better with a practical and more understandable example.

Before I told you how difficult or better, impossible it would be, to sell if your products sold them at the same time a hundred other sellers like you and especially if you wisely, had decided not to minimize your profit by significantly lowering the sale price.

You'd be one of many, maybe the one with the highest price and you would never sell!

It is now known that people online only look for one thing: the best price, so how can the "ndo cojo cojo" method help us?

Start looking at your competitors better and find weaknesses. Certainly many of them, if not all, sell in some European countries and only on some marketplaces.
Many sellers are lazy, they do not engineer and therefore will be short-lived.

You, on the other hand, will do much more: you will sell everywhere! You will make sure to arrange sales in as many countries as possible and try to plumb all possible marketplaces to "place" your products everywhere.

By significantly increasing the "reach" of your visitors, you will inevitably have to sell more and above all you will not have to sacrifice your profit by making compromises absurd.

And if you add other products to your usual product catalog, all those that you could get, finding suppliers everywhere?

And if thanks to private agreements with other carriers, could you ship to countries not covered by your suppliers?

You would take off the competition!

So the potential of the method begins to take on real value, the planning effort would certainly be more important than the classic dropshipping shop, but a real business activity always requires a great deal of effort!

However to the method described above, another sales method is predominantly opposed.

DropShipping: making profits using the "exclusive contracts" method

If the first method described is aimed at a quantity policy, the following method aims at a purely quality sales policy.

Even here the road will not be free at all.

You will have to find all those small suppliers hidden in the network, that maybe sell only in their own reference countries, that have a nice product catalog and that grant an exclusive on some categories of products (so you can do cross-selling that others could not do ).

In this way by agreeing in a preventive way, you will have the security of not having a massive competition and you can dedicate yourself exclusively to the lead generation, or the generation of new customers.

As you may have noticed the finding is that dropshipping has many advantages, but also many disadvantages.

If on the one hand the idea of investing minimum capital, of managing the business wherever you are, of not having stock and having so many sales opportunities may seem incredible advantages, almost futuristic, there is to oppose the basic principle of business, or profit margins.

In dropshipping, these margins are tangible only if there is really a winning idea and a business model suited to your way of being.

In any case, before starting ask yourself:

  • What do I offer more than my competitors?
  • The margin that I earn will be enough to cover the costs (even if they are minimal)?
  • How do I lead generation? Many paid systems may not be convenient if you do dropshipping because you would risk eliminating your profits.
  • Am I able to start an appropriate social activity to support my business?

If you have decided to start then know what awaits you:

  • Realization of the website (e-commerce) and / or Ebay Store / Amazon / other marketplace.
  • Catalog management: Publication, Product update, inventory alignment.
  • Sale: Respond to customer questions, phone calls, mail, live chat.
  • Orders: Send orders to the supplier.
  • Administration: Invoicing, Collection management, supplier invoices payments.
  • Customer Care: Problem management, Returns, Courier stocks, lost goods.
  • Management: You have a VAT number, you have costs and requirements to manage (Accountant etc)

My advice is to make two calculations before starting.
Assume an estimate of sales / turnover, costs, time spent and then evaluate if it suits you.

Consider that the more sales you make and the more customers / issues you will need to manage.

Many dropshipper sell with margins of less than 10% (which on the marketplace removed the commissions means to remain without margin), I will never tire of repeating it: this is madness!

In conclusion we can say that there are many ways to create profitable businesses with dropshipping, just do not follow the masses and look for more agreements between the parties involved.

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