Starting your own online business is a worthy investment with potentially lucrative results. Online commerce has long been an avenue that draws the most successful of entrepreneurs, and new methods involving drop shipping are expediting business owners toward accomplished profits. However, in order to achieve your goals, a substantial amount of work is necessary. This guide on how to start an eCommerce shop with drop shipping will hopefully get you started on that path.
Understanding Drop Shipping
Drop shipping is a method of doing business online that relieves business owners of many responsibilities without sacrificing a quality buying experience for customers. When you work with a drop-shipping company, your customers place orders through your website, then receive their purchases directly from the manufacturer. This eliminates the shipping and inventory hassles of more traditional business models.
The Basic Steps
Consult with a lawyer. Deciding on the proper structure for your business is the first step before opening shop. A lawyer will go over the pros and cons of LLCs, C Corporations, and Sole Proprietorship, and will help you to incorporate your business.
Apply for an EIN number. An Employment Identification Number is legally required to start a business, even online. It is also necessary for registering with drop-shipping companies.
Request a state sales tax ID. This is another legal requirement, so just assume once you’ve received your EIN from the IRS you’re good to go.
Establish your business’ finances. Set up your bank accounts before you open your store. Use separate bank accounts for your business to keep them separated from your personal finances.
Create your online store. Whether you choose to hire a Web designer or use a simple DIY interface, you will need basic things like web hosting, make sure your website’s character reflects the content of your store. If you don’t mind getting your hands “dirty” with a bit of technical work, then you may decide to design your eCommerce site yourself. WordPress a free open source content management system, is a platform of choice. The WordPress platform has lots of powerful plugins that can extend it and produce powerful eCommerce sites, one of which is the woocommerce plugin. Do read this guide on how to set up a WordPress eCommerce Website, WordPress + Woocommerce make for one of the best eCommerce platform for drop shipping . Now it’s time to find your supplier!
Finding a Supplier
Once your business has all of its fundamentals in place, it’s time to establish a relationship with a drop-shipping supplier. When reaching out to new suppliers, effective communication is imperative. Double-check their shipping methods and turnaround times. Although many suppliers ship orders out the same day, some do not. Consider the supplier’s location and time difference, if any. It is also best to do some online research about its reputation with other eCommerce sites. When it comes to choosing a reliable drop-shipper for your business, skepticism is healthy. You don’t want a drop-shipper who claims to have thousands of inventory, only to find out they don’t have the item i stock after you have made the sale. So do your due diligence and find out how long they have been in business and how reliable they are before you do business with them.
Tracking information will not be sent to your customers directly from suppliers. Your supplier should send you tracking numbers for each order no later than by the end of the day that the order was placed. This is usually done by email. From there, you should send your customers their tracking numbers.
Customer Service
One of the most important things to remember when establishing drop shipping in your eCommerce store is that suppliers offer no customer service. It is your responsibility as the business owner to enhance your customers’ shopping experience. If your business is on the smaller side initially, you may want to provide a personal touch by helping customers yourself. Later on, with your saved expenditures from drop shipping, you may be able to hire technical support technicians, sales representatives or customer service representatives if you choose.
The good news is, without worrying about the hassle of shipping, you will be able to spend more time attending to your customer’s needs and concerns. Focusing on direct communication will turn potential customers into repeat customers.
image Credit: Maria Elena (Creative Commons)
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