Product Sourcing Ideas – Dropshipping

When you are beginning your ecommerce business, one of the first hurdles is deciding on what you will sell.

There are a variety of places and means to source product – you need to decide which one will work best for you and your business. Today’s blog post will address a low cost way to enter the market: dropshipping

Sometimes this is the easiest and lowest risk way of getting into an ecommerce business. Simply put, drop shipping is the process of listing merchandise for sale that is owned and warehoused by a third party. Once you sell the merchandise, you notify the drop-shipper who will ship out the product to your customer for you. Sounds easy, right? The secret here is finding a RELIABLE and TRUSTWORTHY source with a product line that is IN DEMAND.

Most legitimate drop shippers will not require a minimum purchase or charge a monthly fee, but there are exceptions to even that rule. Do your homework – research potential drop shippers by entering the dropshipper’s name into a search engine and add the words “complaints” “sucks” “reviews”. Also research what the fees are and figure out if there is a market for their products and what the going rate is. Take a look at private web sites, ebay and Amazon to start. Figure out if it is worth it to sell their products after you factor in the fees that each marketplace charges, the fees from the dropshipper and the cost of the merchandise.

Next up: distributors

Top 6 Reasons for E-Commerce Merchandise Returns

Written by Pat

It’s a cost of doing business and a headache for a lot of online sellers: accepting merchandise returns.

There are valid reasons that we get returned merchandise from our online customers, but there are some times that costly returns can be avoided or prevented.

According to a recent Distribution Center Operations Report from The Supply Chain Consortium and Reverse Logistics: Returns, Refunds and Recalls Hot Topic Report, the top six reasons for customer returns were:

1. The customer ordered incorrect product or size
2. The customer decided the product was not needed or wanted
3. No reason for return given
4. The product did not match the description on the Website or in the catalog
5. The product did not fit the customer’s expectations
6. The company shipped the incorrect product or size

e-commerce shoppers

So, as an e-commerce company, how can you stem the tide of product returns?

At first glance, it would seem that the merchant might be responsible for only #6:

The company shipped the incorrect product or size

This, of course, is generally a clerical error that might be avoided with improved systems and procedures and employee training.

However, there are quite a few steps an e-commerce seller can take to prevent returns based on some of the other reasons that were cited.

How about these reasons?

1. The customer ordered incorrect product or size

4. The product did not match the description on the Website or in the catalog

The number one reason is incorrect product or size and the fourth most popular reason is that the description was not accurate. How can you as an online seller prevent this?

Ask yourself:
How clear and accurate is my description?
How many pictures do I have for each product?
Do the pictures show the product from various angles?
Do the pictures show relative size with a ruler or other measurement of scale?
For clothing items, are there sizing charts available?
Do I link to the sizing charts from the respective product page?
Do I provide measurements?

Another way to avoid having customer returns is to allow customers to leave product reviews.

Besides providing descriptive language that will help the search engines better index your products, reviews left by past customers can help shoppers make the best decision based on their experience. Who better to know that a pair of shoes runs small and to order a half-size up? Or that the orange shown in the picture is just a little bit brighter than the actual color of the purse?

As an e-commerce website, we will always be susceptible to returns, but it is possible to greatly improve your company’s return rate by improvements to your site and product descriptions. These changes will not only lower your merchandise return rate, but provide a boost to your customer satisfaction rate as well.

IMA Member Spotlight: The Gentle Bath & Company

Brenda Collins owns The Gentle Bath & Company, and is a textbook case study in branding and marketing an e-commerce business. We sat down and talked with her.

How and why did you start selling online?

Before launching my business, I was an RN. I suffered an injury which forced me to “retire” from nursing, so to amuse myself, I sold items from around my house on eBay. That, coupled with the computer and marketing skills I’d learned in Hospital Education, and the design skills I developed through scrap booking when my son was born, set the stage for my launching an e-business.

Initially I opened an eBay store in the Bath/Spa category in March 2007 – and began to sell items within an hour! I chose that segment because I had a very hard time finding quality items when redecorating my own master bath. I ordered a set of Bamboo Blend bath towels on a whim; I ended up loving them so much they became the foundation of my store. I started out with less than 20 items, gradually adding to them (now I carry around 250 items). After the first year, which was full of growing pains, I launched my own website, and sales soon surpassed those of my eBay store. I closed the eBay store in 2009 at the end of last year and am concentrating on my own website now.

Tell us about your company.

The Gentle Bath & Company offers luxury bath items at affordable prices. Our tagline, “Transform your bath into an oasis”,  says it all. We carry a variety of bath-related items from luxury towels to bath caddies to Lady Primrose Bath and Body. We aim to provide our customer with an exceptional internet buying experience.

What were some of your biggest mistakes? How did you overcome them?

I’ve had some white elephant products in my inventory; it’s been hard to pinpoint exactly why they don’t sell. I’ve found that sticking with more “known” brands helps with search and sales. I have a clearance category and put some of the items in that, which I’ve been able to return other items to the manufacturere even though I had to pay a restocking fee.

What do you know now that you wish you’d known when first starting your business?

Where do I begin?! Probably the biggest thing would be building a website sooner than I did. Starting a store on eBay is a great way to begin with a limited investment, but now there are so many quick and easy website options that I think I could have opened a website sooner than I did.

Another would be how much time a good shipping program can save you. When I implemented my shipping system (Shipworks) with a dedicated thermal label printer, I cut my package processing time by 200% or MORE!

“It is vital when choosing your shopping cart that you investigate the shipping processes available for the cart.”

What three things would you tell aspiring entrepreneurs?

a. Research research research – your products, your choice of carts and your choice of payments, everything about your business should be researched and then chosen based on what is the best fit.

b. Always try to exceed your customers’ expectations; they will remember you for it and refer their friends and family to you if they trust you will treat them right.

c. Join groups such as IMA and the Internet Retailer Association. You can learn so much from others who’ve been there longer than you, and get feedback and information about many cutting-edge practices in the field of Internet sales.

What has been your greatest business success?

I think the “branding” and “packaging” that I’ve built is what I am known for.  In addition to my products it is my packaging that stands out from many other Internet companies.  I have often talked to customers about their orders, and apart from my products it’s the packaging that they remember and is what stands out when they think about their order.  It is this attention to detail that often leads a customer to refer their friends and family to my store.

What are your goals for your company?

My goals are always changing as my business evolves.  My long-term goal for my company is to maintain profitability as I focus on my website for my sole source of income.  My short-term goals for 2010 are to:

  • change my merchant account from PayPal to one that is more economical,
  • choose and implement an email marketing  program, and
  • take advantage of my new WordPress blog theme and implement all the Google advertising opportunities that are built into the themes framework.

What are some of your favorite business resources?

1. IMA – they have so much to offer on their website in addition to one of the most helpful member forums available for the Internet retailer.

2. Facebook Fan Pages – one of the best free advertising you can get for your business.  I also think their paid ads have some of the best returns for the money.  You can build your fan base and then have a captive audience to communicate with directly regarding all facets of your business. In fact, I find the Facebook interface to be one of the most powerful and easiest to use of all the social networks out there.

3. SCORE – Service Corps of Retired Executives will provide a small business counselor free of charge.  I have met with mine a few times and that’s been very helpful for me.  Their website is also loaded with resources for the small business owner.

Finally: why did you join IMA and has it been worth it?

YES YES YES!!  I was looking for a group that both understood eBay but also focused on business outside of eBay. I found all of that and more in the IMA.  In fact, the member forum is the most helpful forum that I  belong to.  They’ve also started offering more education and that has been very helpful as well.  For the small internet business owner there is no better group to belong to than the IMA!

Brenda, thanks so much for taking the time to chat with us. Best wishes in 2010 and beyond for The Gentle Bath & Company!

Edited by Shonali