The Project Drop Shipping Chapter 7 – Inventory and Pricing
Know your Product - Know your Business
When it comes to drop shipping taking a few extra steps can ensure your success. In this chapter we will cover taking the time to touch and feel your product before you sell it.
In the last chapter we partially covered examining your product. After working on this a little more it became apparent we needed to expand our though process on this aspect of the business. Knowing your product, its prices, and its value are key elements to successfully selling that product. Our previous research showed us that we could not profitably sell individual items based on their low price point. We came up with a break even sales point of $12 per order while having a product that priced at around $5. So we decided to create groups - meaning we will not sell individual items but instead we will sell our product in groups of 3 and 7. After making that decision we had to now redevelop our entire product offering.
Here is what we did:
- Now that we have decided that our product will be offered in a different manner then our supplier currently supports we are going to have to take new pictures for the site. In order to do this we are going to have to touch each item we are going to sell. We placed an order for one of each of the items we are going to offer. This did cost a little money but it was a necessary step in order for us to be able to profitably offer these products for sale. In many cases a drop shipper will only be selling one of something so it is always a good idea to buy and use the item you are going to sell as it will help with your ability to market the product.
- We will be changing the product offering enough that we also have to consider proper packaging. We may be able to use the original and just pack them in a box with packing materials. What we would like to do long term is to find a supplier who can give us custom made boxes specifically designed for our product. Buyer like to see nicely designed boxes. This is a key element of shelf marketing in stores.
- Once the product has been received and we have decided on our packaging process we will have to update our site to accommodate the new product menu and product offering. In hindsight this step should have been done earlier on in the process. Understanding your product and your break even point should be done before you list your first item for sale on your site.
This process has taught us a lot so far. Hopefully as you are following along you are writing our your own blueprint for success. The key element to all this is keeping in mind that once you have built one successful drop shipping site creating a second or a tenth will be much easier. They always say to learn to walk before you run - correct? Well I think we just stood up and are ready to take our first steps!
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