Do you know that with the birth of computers and internet, you are actually able to make money online without really investing thousands of dollars in capital? Make money online through the Drop shipping Arbitrage System.
What is Drop Shipping Arbitrage?
The drop shipping arbitrage system works just like a reseller program and the traditional drop shipping system but there’s a little difference. With reseller and traditional dropshipping system, products are sourced directly from the manufacturer. But with drop shipping arbitrage, products are sourced from other sales platforms like Amazon, Walmart, KMart, Aliexpress, and etc. You choose products that are offered at the lowest possible price and relist the product to another sales platform. In this case, you want to list it in eBay or you may also list it in your own website.
The diagram below, courtesy of DSM tool, shows a common drop shipping arbitrage operation, from sales to shipping. From the customer placing the order in your store (eBay, Shopify, Etsy, or your Website), to you as the merchant placing the order from the product source (Amazon, Walmart, AliExpress), and finally the product being shipped to the customer. The sales and order process happens without you handling the actual item because the goods were shipped directly from the source.
Advantages of Starting a drop shipping arbitrage business
No big start up capital required
Anyone who wants to go into the drop shipping business does not really need to break the bank in order to get started. Note that in drop shipping, you only make a purchase when your store closes a sale. Therefore, you don’t need to purchase the products in bulk, or run a physical inventory to start selling. So no large initial investment is required.
Make money online less all the laborious work
With drop shipping arbitrage, you don’t really have to get hold of the item directly so it doesn’t require much physical work. All that is needed from you as the seller is to market the items, monitor your listings, and fulfil the orders from another sales channel to the customer for a small return.
How To Start Your Own Drop shipping Arbitrage Business
The drop shipping module is pretty straightforward. However, it is the hands on application of what you’ve learned that makes it challenging. For beginners without experience in e-commerce, this is a challenge. Thankfully, there are many resources that can help you get started.
- Research and learn. Research is the most reliable source. Take courses being offered from reliable sites like Udemy.com or consult YouTube. There are step by step instructions that you can easily follow.
- Ask questions. Consult the experts. There are various groups in Facebook this one who can actually show you the step by step process. Post a question and the skilled and knowledgeable are willing to answer.
- Get a tutor on the field of drop shipping. You can always opt to get an expert to teach you the business. Note though that some experts in the industry may charge you with a small fee in exchange of their knowledge
Four Essential Steps To Finally Get Started with Drop Shipping Arbitrage
1. Choose the best sales platform.
The most common platform that many aspiring dropshippers use is eBay. With eBay, you will never go wrong because they have an established reputation in the e-commerce business. They have established trust and confidence among their buyers which is perhaps among the reasons that they continue to attract a number of buyers.
Note that eBay recognizes the drop shipping module and allows drop shippers to use their platform. Check out eBay help center about product sourcing.
2. Choose a good niche.
There are some points to consider when looking for the best niche. Choose a niche that is sale-able in the market. Do your research and brainstorm ideas with someone who is already in the industry. Google Keyword planner is an effective tool to help you determine what keywords are trending in search engines. Finally, choose a niche that you are passionate about. For instance, if you are into tennis as your favourite sports, it’s a good idea to sell items related to tennis.
3. Choose a reliable supplier.
Build and maintain a record of good suppliers and your list of products. The suppliers you would like to keep in record are those who demonstrate three things: Trusted and reliable, fast or free shipping services, and finally quality and superior products. Good sales record of at least five star reviews are the suppliers you can trust.
4. Manage and monitor your listings
When you have everything in place, you will need to monitor your listings. This is essential in your business. When you source products from other sales platform, tendency is that prices go up and down, go out of stock, or not available. You want to make sure that you are at par with your resource in order to deliver the product on time once you made a sale. With few product listings, you can fairly manage it manually. But with a growing listing in your store, you will surely need help. Use a well trusted drop shipping arbitrage platform. Read on reviews of how it works and see how your store can benefit from it.
How Do You Make Money From Dropshipping?
When you make a sale in your eBay store, the buyer must send you the money via PayPal before the order is fulfilled. With the drop shipping model, you receive the payment and order the item from the supplier at a reduced rate, and keep the profits. You can sell a $300-item or a $30-item with equal effort. However, there are considerations to make before repricing an item. These considerations include shipping fees, eBay fees, and Paypal fees. Nonetheless, if your product source offers free shipping, then your consideration boils down to eBay and Paypal fees.
As an example, if you are sourcing the product for $10 and selling the product at $20 in eBay, you will have to consider eBay and Paypal fees of about 14% in total. Therefore, $20 (your selling price) less 14% fees, you get $17.20 from the buyer’s payment. $17.20 less $10 (item source cost), you will have $7.20 in profit.
Making money online without the huge start up capital is possible with drop shipping. All it takes is to follow a thorough step by step formula that will take you to your goal one step at a time.