For those who aren’t in the loop about the rather lucrative world of drop shipping, we don’t blame you. The term drop shipping, while gaining more traction, is still relatively unknown.
In essence, it is a method of supply chain management wherein a retailer does not keep the physical stock of goods or products. Instead, the retailer functions sort of like a middleman who transfers the customers’ orders directly to the manufacturer or wholesaler. The goods are then shipped from the factory to the customer directly.
But you might add, how might one gain profit from doing drop shipping?
Drop Shipping Success Stories
Much like other retail businesses, drop shipping aficionados make their money from the price differences between the wholesale and retail price. That being said, some retailers do earn an agreed-upon percentage of sales from the wholesalers in the form of commissions and fees. It will all depend on your personal circumstances and how you negotiate in the end.
Sounds like drop shipping is easy to rake in the money, right? Not entirely, as drop shipping isn’t as easy as it sounds. You’ll face a variety of problems like any other landbased retailers will face such as problems with suppliers, managing complex numbers, customer dissatisfaction, and more.
However, if you do manage to manoeuvre the rough waters of e-commerce, then a profitable drop shipping business awaits. Look no further than these individuals who have taken up drop shipping and succeeded.
Equipped with a passion for cycling, Icelacc Ho was just a university student when he started his drop shipping career. Ho started to drop ship bicycle parts and accessories from various local sellers after he realized that it was a great way to start a business. By drop shipping, he only needed to promote the products without spending a single cent and within four years (and nearly zero budget), Icelacc was already on his way to becoming a successful e-commerce entrepreneur. From then, Icebikeheaven.com was established and the rest is history.
This huge US-based online store is a well-known e-commerce site specializing in selling shoes, bags, and apparel. And its current success came about thanks to the drop shipping model. The company initially had nearly zero sales until Tony Hsieh, the CEO of the company, decided to transform Zappos.com into a drop shipping business way back in 1999 — getting rid of the risk of the manufacturing process and instead, focusing on collecting and transferring orders from customers to suppliers. This business model allowed the company to cut costs and to funnel the saved capital into client support which brings us to today.
This online store specialises in clothing and apparel and was founded by Justin Wong, who was only a university student when he started the business. Wong used several ready-to-use e-commerce platforms including Shopify to start the business. In addition, the young entrepreneur leveraged social media (especially Instagram) to market his products. But marketing through social media wasn’t particularly profitable, so another plan was set in motion — using Iconosquare to identify popular accounts and reaching out to influencers. The plan worked and he gained over 100 partnerships afterwards.
As one of the most successful drop shippers and e-commerce gurus out there, Irwin Dominguez’s crowning achievement in the industry was earning one million dollars worth of sales within eight months. His start in the industry was a simple one, as he was inspired by a friend’s online store to create his own. Armed with little to no experience in the field, Dominquez picked up a few tips and tricks along the way. Chief among them was to sign up for Shopify and Oberlo to help import products into his store. The latter also allowed him to ship products directly to customers. And using his prior knowledge in marketing, he set up a Facebook business account for his store — a move that he has attributed to his current-day success.