Top 10 Tips for Making Money With Drop Shipping

Top 10 Tips for Making Money With Drop Shipping

Occasionally, I like to present you with alternate methods of making money online. The following article is a guest post from fellow marketer, James Adams. James will present you with 10 excellent tips to make money as a drop shipper.

For those who are not familiar with drop shipping, Wikipedia defines drop shipping as a supply chain management technique in which the retailer does not keep goods in stock, but instead transfers customer orders and shipment details to either the manufacturer or a wholesaler, who then ships the goods directly to the customer.



If you’re interested in making money with drop shipping, you’re not alone. With the ability to reduce or eliminate on-hand inventory, drop shipping is an attractive option for many people who are searching for ways to make money on the internet. Here are a few tips that may help you reduce your expenses and increase your ability to make money with drop shipping.

1. Inventory Reduction – Inventory reduction is probably the number one moneymaking reason people get into drop shipping. With little or no supplies on hand, its less likely you’ll be left footing the bill if your products don’t sell or you decide to try your hand at something else.
2. Start-up Costs – Without the need to stock a large supply of inventory, not only can you save money, but you may also be able to operate your business from home, making your initial investment and start-up costs minimal. This could leave your investment risk relatively low and your money making potential high.
3. Loss Prevention – With inventory reduction, also comes another drop shipping moneymaking advantage – loss prevention. Chances of lost, broken/damaged, and stolen inventory may be reduced since you don’t have to keep inventory on hand.
4. Time = Money – There can be a large time commitment involved with inventory management in a typical business, but with drop shipping, you may be able to avoid the time it takes to stock, maintain and manage inventory, and time can equal money.
5. Reduced Overhead – Another moneymaking opportunity involved with drop shipping is reduced overhead. Without inventory to manage, you may not need employees to stock, price, order, etc. You may even find the need for an office or place of business is eliminated, which opens the opportunity for saving money on rent, utilities, property taxes, etc.
6. Up-front Payments – By being paid by the buyer first, you may find you have a gap between when you receive payment and when you must pay the supplier. By getting your money first, you can reduce the chances of being stiffed on a payment, and with your money in an interest bearing account, you might even make a little money in the process.
7. Advertising – Since a majority of your business will likely come from, and be conducted by way of the internet, the need for costly print marketing and advertising may be reduced, potentially adding coins to your coffers.
8. Avoid the Middleman – Seeing as how by using drop shipping, you may already be the middleman, being able to purchase directly from the manufacturer rather than a wholesaler or warehouse may get you a much better price, which could allow you to increase your profit margins.
9. Due Diligence – If you want to make money with drop shipping, you will likely have to conduct your due diligence, and at times be suspect of certain suppliers or transactions. You’ve probably heard the phrase, “If it seems too good to be true, it probably is.” This could be a good rule to live by when trying to make money in drop shipping.
10. Relationship Building – By finding trustworthy suppliers and building a strong relationship with them, you may be able to set better, more reliable prices, and ensure supplies are available and in stock when you need them, thereby increasing your money making abilities as well as customer satisfaction.