The bow of your ship rises and falls with each wave of the sea. You are quickly closing in on the enemy’s ship. You prepare a grappling hook and take your position. It won’t be long now. A greasy brethren stands next to you with a pistol in one hand, and a saber in the other. A crazed scream comes from him as he works himself into frenzy. You look ahead and see the enemy’s ship is now in full view.
But much to your surprise, the crew of the other ship is not preparing for battle. Instead they are piling treasure and booty onto the deck of their ship. You issue a stand down order to your men, and you peacefully dock side up side with the enemy ship. You meet with the enemy captain, and begin to strike a deal.
The enemy captain informs you they have a huge selection of inventory. But it is too cumbersome for them to constantly chase down customers. They would much rather have a 3rd party can advertise their products for them, make sales, and help ship those orders to customers. In exchange, the pirates can mark up the price of the products as much as they want.
The Enemy captain then explains that his trading company will be responsible for finding and sources for inventory, shipping inventory from overseas inventory to the country you are selling to, checking for quality standards, and
This means that you, as a pirate captain, only thing you have to do is travel from port to port, advertising this enemy’s products. This can be an extremely profitable venture for you because you will have no overhead costs. You’ll simply need to maintain your pirate ship viola! You’ll be an international pirate trader while spending the smallest amount to money possible.
Welcome to the world of Dropshipping
What is Dropshipping?
According to Wikipedia
Drop shipping is a supply chain management method in which the retailer does not keep goods in stock but instead transfers the customer orders and shipment details to either the manufacturer, another retailer, or a wholesaler, who then ships the goods directly to the customer.
In this process, a small website owner can make huge profit margins because they have virtually no overhead costs. All you have to do is open a droppshipping site simply have to start run either a website, Facebook or Instagram Page. Please see the following example below.
Dropshipping in Action
I was surfing Instagram and saw this awesome motorcycle helmet. This is the Bell Moto 3 Retro Motorcycle helmet. This amazing piece of ECE rated protection costs a whopping $289 directly from the manufacturer. A retail store will also charge this much for a helmet.
So let’s take a quick google search, so see if we can find a deal.
JP Cycles has this helmet on sale for $129! That’s a hell of a deal!
So now all I have to do is set up an account with a dropship company. I Personally recommend using Shopify. They are the industry standard when it comes to Dropshipping. You simply pay a monthly fee based on your type of store and they take care of the rest. Once your store is set up, then all I have to do it create a website for the store.
And lastly, I just need to start sharing my ad their either a website or a social media platform. I’d recommend running either a Facebook or Instagram Ad. With over 500 million people active on Instagram every day, chances are you’ll win enough sales to cover your advertising budget.
As you can see, drop shipping is basically the modern day equivalent to larceny on the high seas. As a pirate with little to no overhead, you can quickly outmaneuver much larger players. Now one question you may have is why would other retailers allow this. Why don’t they just simply put more money into advertising and get those sales rather than surrender them to you?
Is it Legal? Why do companies allow this to happen?
This can be for one of several reasons.
No Time: Large online stores don’t have the time to police their inventory. They can’t dedicate time they don’t have to push every product out the door. Dropshipping actually helps these retailers sell items faster because you are essentially using your time to advertise their products. And they still get paid for each sale, so it’s a win win for them.
Profit Margins: Small large scale retailers can such achieve insane profit margins some products, that they don’t care about further increasing the margins. For if a company buys 100,000 fidget spinners for $1 each, and resells them all for $15, that’s $1,500,000 in profit. The Fidget spinner importer isn’t going to care if a little guy like you manages to sell 1,000 of them at $20 and make a small $5,000 profit for themselves.
Niche or low ROI items: Some business will specialize in niche items that are fairly hard to sell. These can be items such as obscure herbal teas or ballet shoes. Often these items require importing and on top of it these niche items have very small markets. Companies that specialize in these types of items need all the help that they can advertising their products. By using Dropshipping, you are actually doing them a favor because they are still getting paid for the items.
Find your Niche
One of the best strategies to implement in dropshipping is going after low ROI items. These include rarer and niche items. The motorcycle helmet above is a great example. Motorcyclists are a minority in many developed countries. Which means that there in not the same ROI in producing helmets, jackets, etc. verses say T Shirts. So because there is less ROI on motorcycle gear, there is less money being dedicated to advertising them.
This is the perfect type of situation you want as a dropshipper. You want to be engaged with a product niche product with lower ROI because it won’t be as competitive. You’ll find yourself with a much better opportunity to win a less competitive market over.
Find your audience
Every product imaginable will have an audience for it. And you will want your ads to constantly visible to your audience. If your audience is baby clothes, you will want to be active on mom and childrearing websites.
Use Social Media
Drop shipping is highly competitive and you will want to leverage every asset you can available to you to succeed. The use Social media is absolutely imperative to becoming a profitable business. You will need to use social media to boost your presence online. You will then want to start creating a brand identity that your audience can engage with, and share across multiple platforms.
Beware of Trending Products
Trends come and go. And while there is nothing bad about making money while they are happening, it can be a poor business decision to constantly chase what’s trending. For example, many drop shippers spent a lot of time and resources getting rankings for Fidget spinners. And now, they have a sell ranking drop shipping business for a fad that has already passed.
While you can make a successful drop shipping enterprise by constantly chasing trends, you might find it will be much more profitable sticking with your niche. As you won’t have to constantly re-tweek your website and web presence every time something new comes along.
As a Pirate Investor you, yourself, is always your best investment. Investing in a dropshipping network is an excellent way to find the freedom you desire.