Hey Everyone!
Just a newbie here excited to be a part of the community and start adding some value. I thought I’d share a pretty simplistic way that I made my first $$'s online. Since then I’ve taught this method to a bunch of people. Some succeed, and some fail. Before I even begin, I just want to start by saying this method involves excellent customer service. The way you will be providing value essentially is by making sure every sale you make on Amazon goes smoothly.
What is dropshipping?
Before I get into anything, dropshipping is the act of selling a physical product without ever holding inventory. Many times you are also able to not spend a single dollar until you have already made a sale. This is done by making deals with suppliers that allow you to purchase products from them with the agreement that they will then ship it out to your customer, instead of shipping the product to you.
What will you need to get started?
-An Amazon Seller Account (takes about 15 min to set up)
-An eBay Account
-A credit/debit card to make purchases on eBay
Amazon as the sales front and eBay as the supplier
With this specific method it allows you to not have to make deals with suppliers, but rather just search eBay for products that are selling cheaper than what they are selling for on Amazon. Why, you ask, do products sell for cheaper on Amazon then they do on eBay? Well, it all comes down to customer service (and historically people had problems with eBay or think that it is all second hand products so never gave them a chance after Amazon go as big as it did).
So what will you be doing? You will be scraping through eBay and cross referencing products on eBay, with their current selling price on Amazon. This is the most time consumer part. I spent upwards of 20 hours the first time I searched, listed 100+ products, and I think on 5 of them ended up ever selling. However, the 5 products that did sell were a gold mine.
What makes a good product?
A good product will be something that is selling for cheaper on eBay than it is on Amazon (including the Amazon sales fees which range from $2-$8+ depending on the product price and niche). The product that you are purchasing from eBay will also have inventory. What this means is you wont be selling a product being sold by an individual, but you will be selling a product that has 20+ items in stock and usually being sold by a distributor. Average profit margins will end up being anywhere from $1-$20 per sale. This may not sound like much, but when you’re making 20 sales a day on a product with $7 profit margins this will add up quickly. Not to mention if you are using a credit card that offers rewards you will be racking up rewards quicker than ever, as well as earning eBay bucks to buy more products! Talk about TRIPLE (sometimes even quadruple) dipping! If you ever receive a return, rest assured that you will be able to then turn around and return this product back to eBay, or sell it to another customer. This ensures that it is VERY hard to every lose money with this method of dropshipping.
A good product will be ranking on Amazon under 100,000 in a single niche (sales rankings are inverted, so a LOW sales ranking is better, a sales rank of 1 being the best, ex. of sales rank provided in image below). This will help ensure that the product sells, it won’t hurt to list items above this sales rank, it just probably won’t sell. A good product will also, as mentioned before, have inventory available on eBay so you’ll be able to purchase it when your customer does. A good product will also preferably be a non electronic problem, just to avoid problems down the road, however electronic products can be sold if you are careful about it.
This seems too easy…
Well the reality of it is that this is a very easy way to make money online…when you do it right. Finding products is time consuming. You can spend up to 40+ hours searching for products and not find a single one that seems to be selling. This can become a headache.
When you actually do begin selling products YOUR PRODUCTS ARE ONLY AS GOOD AS YOUR SUPPLIER. If you remember what I opened this post with is that this requires EXCELLENT customer service skills. You will run into problems with suppliers and customers due to not having quality control of the product you’re selling, and it will be up to you to fix those problems within 24 hours. If you do not, you risk being suspended by Amazon, and never able to sell on their marketplace again. This will require you to repurchase items for customers, pay for return shipping, and sometimes provide a refund without even getting the product back. This is not the dropshipping method to pursue if you are going to get greedy or want a 100% passive income stream (Fulfillment by Amazon or FBA is a more passive route and you will maintain quality control over your products).
Feel free to ask questions below and I’d be more than happy to help! This is not free money, like nothing ever is. However, it is a fairly good way to bring in money ESPECIALLY if you have minimal/no start-up capital. You’ll be hard pressed to find a better way to make money online for a cheaper cost of entry.
Due to school I have not pursued this method for a while. However I started up for around 45 days or so just to make some extra money a few months back. I’ve included a snapshot of the type of profits that are not super uncommon to make once you have done your product research and know what niche you are able to sell in.
Cheers!
Chopblock
(hard to get in high school for sure though haha). Its funny when the problem of making too many sales comes into play in any entrepreneurial venture. Always a great problem to have, but not always the easiest one to correct while maintaining full equity.
