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"E-Commerce Drop Shipping Business": Profitability and How To Start

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With the internet being the main platform of how people do almost all of their activities, the e-commerce industry has grown to be one of the most promising business venture available.

The concept of e-commerce is not new and has been often discussed since the very start of the internet history itself back in the 1980s. However, the rise of social media and mobile networks has matured the industry. Now, e-commerce is no longer a niche, but rather one of the main ways of how people shop.

During the past few years, the drop shipping concept is on the rise. Basically, a drop shipping e-commerce business is where the seller only focuses on the marketing and selling process itself, where the stocking of the product, the delivery, and other intricacies are handled by the suppliers. Payments are also often done when the goods are already delivered to the customers. This phenomenon made e-commerce more available to sellers with a limited capital to stock or manufacture products.

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Drop shipping, when done correctly and with the right product, can be extremely profitable. Interested for a drop shipping business? Here are a few pointers to help you started:

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1. Startup Investment
With this business model, the monetary startup cost can be as little as $0 assuming you already got a computer and decent internet access. However, you should also consider that you will need to invest your time for market research, finding wholesalers and suppliers, marketing and selling, etc.

2. Finding Your Niche
The key to this business, with its very tight competition, is to find your niche which you can focus upon to build your drop shipping empire. To achieve this, you need to do enough research both for the available target market and the current competition. It might be confusing and frustrating at the start, but there's always that demand that hadn't been fulfilled out there.

3. Finding Wholesalers/Suppliers
Once you've decided on your product, you now need to find the suitable wholesalers. This can be a daunting process since most wholesalers are not tech and SEO savvy and won't show right away on your Google searches. You'll need to dig deep and be prepared for trials and errors before finally finding the right one. Your niche can also be reversed, and get dictated by what profitable wholesalers are available in the market, which can also be very profitable.

4. Market Yourself
Many e-commerce websites are available today. EBay remains the most established and powerful one. However, utilizing other e-commerce platforms may also gain you potential customers and are worth trying. You can support this by having a blog (with great contents related to your marketed product), Search Engine Optimization (SEO), social media marketing, native advertising, and other digital marketing strategies. With the tight competition, you need both diligence and creativity to stay ahead of the packs.

Earning Potential

A moderate drop shipping business can earn $50,000 annually on average, with some of the most successful ones even reaching millions in annual earning. However, the profit margin in this industry can be razor thin. Therefore, you'll need to seriously maintain the costs involved to generate a healthy profit of at least 5-10%.