Small Business Q & A: Cut Start-Up Costs By Using a DropshipperWritten by Tim Knox
Q: I'm starting an online specialty shop that sells gifts and home accessories. I want to be able to have items dropshipped to customers through my site. I already have a Web site and a domain reserved, but I don't have a lot of money to get this going. Can you offer any insight?A: Setting up relationships with companies who will ship merchandise directly to your customers for you-- dropshippers, as they're called --is an excellent way to start your e-business and, if done properly, doesn't have to be a costly endeavor. There are literally hundreds of companies out there that will dropship products for you, everything from gifts and housewares to power tools and furniture. In a nutshell, here's how dropshipping works. You set up an account with a dropshipper (or multiple dropshippers who offer different kinds of products) who provides merchandise that you can sell on your Web site. The dropshipper typically supplies you with images and product descriptions that you can use to build your online store or feature on static HTML Web pages. You can locate dropshippers with new e-book The 2003 Guide to Top 400 Dropship & Wholesale Companies. YOu will find it at: http://www.dropshipwholesale.net op400.asp. When a customer places an order for product on your site, he or she pays you for product. You, in turn, place order with dropshipper and pay them for product. The dropshipper then ships item directly to your customer under your company name. To your customer's knowledge, product was shipped by you. Dropshipping offers many advantages to shoestring online start-up. You don't have to pay for an item until it sells, and your customer pays you, so your personal cash outlay for product is zero. You never have to handle or warehouse merchandise, as order fulfillment is handled by dropshipper. You can also offer a wide variety of items from multiple dropshippers, and your end customer is none wiser. Dropshipping does have its downsides. Since you do not actually stock products featured on your site, you have no control over inventory management, product availability, order fulfillment, shipping processes and so on. Still, if you do your homework and establish a good relationship with a reputable dropshipper, problems you experience should be few.
| | Small Business Q & A: Business Lessons Learned At The MallWritten by Tim Knox
Normally in this column I dispense highly-intelligent small business advice in response to thought-provoking questions submitted by future and fellow entrepreneurs. This week, however, I have a couple of questions for myself, one of which makes me wonder how truly intelligent I really am.Q: Dear Me, I recently took my teenage daughter shopping at mall. The experience raised two questions. (1) What business lessons might be learned from such a foray into teen commerce; and (2) What heck was I thinking? -- Sincerely, Me A: Dear Me, great questions! Let me answer them in reverse order since second question is probably one causing you most concern. What was I thinking? Only good Lord knows. I vaguely recall complaining that my fifteen-year-old daughter, who we'll call "Chelsea" (because that's her name), didn't spend enough time with her dear old dad anymore. It's a complaint that every dad of a teenage girl formerly known as "my baby" has made at one time or another. I also recall my insightful wife telling me that if I wanted to spend time with Chelsea now that she was a teenager I would have to do it in her element, which happens to be any large structure with word "Mall" on side. A fitting analogy would be that if you want to spend time with a moody tiger you have to go into jungle to do it. No offense to my mall merchant brothers and sisters, but a trip into deepest jungle is more appealing to me than a trip to mall. I get no joy out of trudging from store to store, attempting to communicate with salespeople from other planets, browsing discount racks of last season's dollar merchandise and peering into windows at mannequins that seem to be in some sort of inanimate pain (why can't they make a happy mannequin?). Bottom line: I'm a guy. It is programmed deep within my genetic code to hold such things in high disregard. But so strong is my love for my daughter that I pushed my true feelings aside and off we went to mall last Saturday morning. I called it, "Driving green mile…" I was perfectly fine walking through Sears (a real man's store). I held my own when we cruised through Spencer's Gifts (I found Ozzy Osborne bobble-head doll to be quite life-like). But when we walked into one of those stores that specialize in clothing and accessories for younger generation my psyche all but shutdown. Within minutes I found myself standing at back of store holding my daughter's purse while she tried on small swatches of material that store was trying to pass off as clothing. It was there, standing among mopey mannequins and teeny-tiny underwear and designer nose rings, that I realized I was witnessing good old American commerce at work. This leads us back to first question: are there business lessons to be learned from a trip to mall? As young folks would say, "Dude, definitely!" The following observations can be applied to most businesses, not just to retailers that cater to Generation Why. Know Thy Customer Well Not just from a demographic standpoint, but up close and personal. Even from my limited vantage point behind rack of neon tube tops it was easy to identify store's typical customer: young, hip females; ages mid-teens to mid-twenties. They wandered through in groups of twos and threes. I suppose that going to restroom in public and shopping are two things females must do in groups. It makes perfect sense when you realize that for teenage girls (and many grown women, I'm told) shopping is a social activity, an excursion to be taken with friends. The smart retailers know this and design their stores to be as much a social hot spot as a retail establishment. From hip/cool music blaring from overhead speakers to hip/cool young sales dudes to hip/cool posters on walls to hip/cool selection of merchandise, this store was a teenage girl's retail heaven on earth.
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