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Start an Online Business - What Is a Drop Shipping Business?

Updated on July 18, 2011

If you've always wanted to start an online business and work from home, an online drop shipping business focused on internet sales is one of the best ways to make money from home. There are several reasons to think about starting a drop shipping business as a way to earn money on the internet.

Discover some of them here by reading below.

Some of the Best Reasons to Start an Online Business

If you start an online business, you can work from home right at the start. A dropshipping business is no exception. Internet businesses are great "jobs" because most people would rather be their own boss. And if you can be your own boss while working at home, that's most people's dream!

Wouldn't it be great to work in your pajamas if you wanted? How about being able to take the day off for special days like birthdays and anniversaries? And when you're under the weather, there's no need to worry about trying to go to work sick or how mad the boss will be if you decide to stay home for the day. If you're not a morning person, sleep in and run your drop shipping online business in the wee hours of the morning! Work from home businesses can't be beat when it comes to situations like the above.

Save Money If You Start an Online Business

There are other reasons online businesses are some of the best small businesses to start. One reason is the money that you save if you start an internet business versus starting a conventional business.

As mentioned above, there is no need to wear uniforms or business attire. (Unless you want to wear them!) Plus, you save money by not eating out at lunch and constantly feeding the vending machines. When you start an online business, there's no need to pay for the gas in your car for a daily commute because you work from home! If you have small children, no daycare expenses are necessary.

Start an online business and work from home!
Start an online business and work from home!

Tax Advantages of Starting an Online Business

There are several tax advantages to starting an online business at home. Many tax deductions can be made when you work from home, including a portion of your mortgage, utilities, computers, and other expenses.

I'm not going to get into all of the tax details involved in starting an online business, just mentioning a few of the favorable options. You should hire an accountant if you start an online business. They are well worth the money spent.

What Is a Drop Shipping Business?

Okay, so you've decided to start a small business. You believe that working from home is perfect for you. So, why should you choose drop shipping as an online business model? There are many reasons people decide to start a drop shipping business. Below are a few of them:

First, we will start with a quick and basic explanation of 'drop shipping'. Drop shipping is a way of selling physical products online.

The great thing about drop shipping is that you don't have any inventory! That's correct! Since no inventory costs are involved, your product selection for your customers is only limited by your time and ambition. You also don't have to worry about getting rid of unsold inventory when you start a dropshipping business online.

You choose products and place images and descriptions of them on your website, on auction sites, in online classified ads, your own online store, et cetera. There are many other possibilities for creating revenue with a drop shipping business.

Reasons to Start a Drop Shipping Business

A customer goes to your website, ad, or whatever, and places an order. The product is drop shipped directly from the manufacturer to the customer. You are simply the middle man if you start a drop shipping business! No inventory is needed. You don't even need credit card or payment processing if you don't want to deal with that, either!

Unlike a conventional brick and mortar store, a drop shipping business is not restricted to one limited geographical area. The world is your customer base! You can reach customers around the globe, day or night. Whether you're asleep or on vacation, the orders keep coming in!

Another advantage when you start an online business at home versus starting other small businesses is the cost of operation. You don't pay rent. Instead your rent or mortgage is tax deductible. Advertising is an option, but not necessary. And if you do decide to advertise an online business, it's much less expensive than traditional advertising venues.

Due Diligence - Necessary Before Starting Any Business

If you decide that a drop shipping business is for you, go through the necessary due diligence before starting this small business idea. Talk to an accountant right from the beginning to get the most tax advantages that you can and to be sure that you are doing everything correctly.

When deciding on suppliers for your dropshipping website, be sure that you are dealing with reputable companies. Otherwise, your drop shipping business will be finished before it even gets started. With an online business, your reputation can get ruined quickly.

Research your drop shipping company suppliers. See if they have any complaints registered with the Better Business Bureau or their state's Attorney General.

Also, be certain that the drop shipping company keeps the majority of its supplies in stock most of the time. Avoid dropshippers who have many items on backorder often. Nothing will lose your own customers quicker.

And of course, research the type of products you wish to sell before you start an online business. What is popular? What is in high demand? Or try to find niches dealing in very specialized, hard to find products for your online business. It is important to choose the right products for your drop shipping business to ensure success.

If you decide to start an online business, a drop shipping business is definitely a worthy consideration!

Start an Online Business- What Is a Drop Shipping Business? Comments

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    • debjbookreview profile image

      debjbookreview 5 years ago

      I am in the process of starting a drop shipping business and your hub was well written and easy to understand. Thank you for the information.

    • Grant's World profile image

      Grant Handford 7 years ago from Canada

      I have been interested in drop shipping for years but am just getting going this year and am hoping by the end of 2010 I will have everything in place. Do you have any recommendations for companies to look at?

      Thanks for sharing your info on this topic.


    • greanearth83 profile image

      greanearth83 7 years ago

      Nice hub. I considered drop shipping but had a hard time finding a credible supplier. Nice hub.