How to Build a Successful Drop Shipping Business

Sing Home Drop Shipping Company

I will use an example of a proposed drop shipping company called Sing Home Company. See how this company is implementing its drop shipping business, selling products successfully without having to stock them whatsoever.

Sing Home drop shipping Company is an online delivery store based in the United States. It is a shopping website that purchases an item when it is ordered and sending it directly to the buyer from the purchase store without actually handling it. This means that we do not have to stock the products we are selling or keep inventory.

Instead, we will be ordering items from the manufacturer or wholesaler and supplying client ones he or she has paid. This drop shipping business is in the ecommerce sector which is currently very large and boasts of generating opportunities for many entrepreneurs worldwide. In 2012, sales from Ecommerce industry hit $1 trillion and it is still growing (Dusto, 2013). This makes the venture very attractive with more people having access to the internet and the large technology advancements that area taking place across the world.

Benefits of Drop Shipping Business

Sing Home drop shipping business first benefit is that low capital will be required to start up. We do not need to tie up large amounts of capital in warehouses and inventory. It will also be less hectic since we will not deal with complex product and storage managements. Low overhead costs are also another advantage in the drop shipping company. We do not need much space and maintenance therefore, costs will be quite low compared to normal old fashion businesses. All that is required to start up is an information technology access point for example laptop and internet connection.

Our drop shipping business does not purchase and stock things in advance. So we have the option of dealing with a wide selection of goods from many countries. We will list an array of products on the website under different categories for example, children clothes and toys will be under Kids Zone, perfumes and make up will be under Fashion, and household electronics will be under Home Appliances.

How to Enhance Success in Drop Shipping Business

Customer Service

We will ensure that these items are shipped to the buyer as fast and conveniently as possible. The drop shipping business website will be well coordinated and user friendly to enhance trust with our clients.  The burden of packaging and sending is off our shoulders therefore our main role and duty in this business will be maintaining good customer care and rapport with clients.

We will do this through use of software that enhances good relationships with clientele and maintenance of customer base, whether large or small.

Good Relationship with Suppliers

The niche of this industry is finding good and reliable suppliers who will not fail to deliver (Long, 2017). In the case of our drop shipping business, we will not be able to keep track of inventory in stores, therefore, after we find the target market, trustworthy suppliers should be selected to lower mistakes and revenue loss.

Minimizing Shipping Costs

The profit margin from the drop shipping business is slightly lower than of physical businesses. This is due to the low prices in physical shops and increased competition in the ecommerce industry.  To maximize the profit margin, our drop shipping business will be sourcing most of the products from the manufacturers, make sure  that our lines are open 24 hours a day and cut shipping costs by networking with warehouses that are in target countries to cut shipping costs.

Global Market Opportunity

As globalization occurs, most people have access to the internet and are opting to shop online as it is convenient and offers a wide variety of products.  My intended market is online shoppers and any potential clients that have access to the internet. The opportunities available for Sing Home Company are unlimited since customers can place orders from any country in the world.

Vision & Mission of the Company

Sing Home’s vision is to offer the best services such that our clients will stay and even recommend us to new buyers. Our mission is to offer top brands at affordable prices to all clients regardless of their origin.

To be able to meet these goals, we will hire the best people with our work ethics like hardworking, qualified, creative, and customer caring. This will help in building a successful drop shipping business that benefits all stake holders.

SWOT Analysis

A SWOT analysis identified economic downturn as Sing Home’s only real threat. Consumers’ spending power is affected by declines in economy and it cuts across all industries. Other threats we might face are stiff competition from new and existing companies and negative government policies.

How to Gain Competitive Advantage

The IT value chain will support enterprise innovation by ensuring that we deliver value added services. This will be done through a series of activities that will be performed to identify critical ventures that are especially important for competition, advancement of strategy and goal achievement (Ensign, 2001). Compared to my competitors, this drop shipping business will be a price taker and as such, my low asset base will be vulnerable to competition.

IT valuation chain will help the business name inhibitors and promoters of the company and will help connect various consumers with our services. The chain will help us drill down to support frameworks upon which our processes and services are run. The drop shipping business will identify the key elements within our systems and detail them for value addition. It will assist in identifying the ideal framework for linking the different organization functions, prioritizing, forecasting and meeting industrial demands. It will also help modify and improve the services cost effectively with high quality results as we grow.

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