Ecommerce Web Design Blog

Dropshipping is an arrangement between a retailer and a wholesaler or manufacturer. It means that when a customer purchases goods from the retailer, the retailer accepts payment from the customer but the wholesaler or manufacturer delivers the product directly to the customer. The retailer then pays the manufacturer the wholesale cost of the item.

What is dropshipping and how could it help?

Dropshipping is an arrangement between a retailer and a wholesaler or manufacturer. It means that when a customer purchases goods from the retailer, the retailer accepts payment from the customer but the wholesaler or manufacturer delivers the product directly to the customer. The retailer then pays the manufacturer the wholesale cost of the item.

Advantages of dropshipping
The advantage of a wholesale dropship arrangement for someone running a website business with an online shopping cart is that little or no stock needs to be held on site. This can greatly improve cash flow and reduce costs of finding storage facilities for stock, getting insurance for it and all of the hassle of dispatch.

For manufacturers and wholesalers, a dropship agreement effectively gives their product another reseller with no additional costs for them. It also saves time, effort and delivery costs in managing regular and bulk deliveries of product to retailers - compared to the cost of using inexpensive courier or express mail services to get products to customers.

Disadvantages of dropshipping
The disadvantages to drop shipping are that these agreements can make manufacturing or wholesale purchase quantities difficult to predict for the manufacturer or wholesaler and that in many cases the cost of delivery is on-charged to the end customer which could affect sales for large products such as furniture that would be expensive to deliver. You may also have to manage situations where there are backorders if there is a delivery or manufacturing problem at the supplier's end - which could lead to returns if it takes too long to produce more stock of that item.

Ecommerce businesses: dropshipping is usually worth it if you're careful
For ecommerce website businesses, the benefits of drop shipping agreements usually outweigh the disadvantages. The wholesalers look after delivery, which is one less administrative hassle and there is no stock management either.

Products well suited to drop shipping include books, computer parts, lingerie, adult toys, clothing, bicycle parts, office products or anything that is easy to deliver to customers.

Dropshipping in Australia and New Zealand
Dropshipping can benefit your ecommerce business a lot, but you have to be careful where you're buying from. It pays not to assume that local dropshippers are the best for your profits, or your customers.

For example, as the wholesale and distribution market is not as competitive in Australia and New Zealand as it is in the United States, some drop shippers in Australia and New Zealand can get away with charging high prices that leave little mark-up opportunity for etailers like you to make money on them. Some may be discount stores selling clearance stock and others may be purchasing from other wholesalers to become middlemen under the guise of dropshippers. This also applies to Asian dropshippers who may have low costs of production, but have realised they can charge high prices and still be cheaper than their competition.

It pays to shop around for dropshippers. If you can find the right one for your business, it will make selling online easy. If not, you'll be struggling to make profits on your income and still holding an advantage over competitors with physical stores.

If you can find reputable US dropshippers who will sell to Australia and New Zealand you may be better off going down that route. You will have to check the postage costs using this item however, as you may still need to hold a bit of stock to make the overall costs low enough for you.

For some products it can sometimes be cheaper and faster to purchase at wholesale prices from the US through regular wholesale arrangements than dropshipping, so make sure you investigate the total cost and turnaround times with the supplier you choose. There is plenty of information on the Internet about finding reputable drop ship wholesalers in the US, so we would recommend a bit of Googling before you get going.

Dropshipping is a powerful business tool for your ecommerce website business - if you use it carefully.

Talk to Osc Works about the dropship centre built-in to our new Platinum ecommerce package.

Starting a new business? Here are some starters for ten.

Business ideas suited to ecommerce

Want to start an ecommerce business or expand an existing business, but not sure where to start? Want to get your business online but not sure how? Here are some e-business online business marketing ideas that could get you started.

• Wedding favours - People are always getting married all year around and table decorations are big business. People often want something custom or special on their tables, so it's an ideal small business idea. What's more, 'wedding' is one of the most frequently searched terms on Google.
• Florists - in quieter parts of town an ecommerce website can help get you busy again. Let customers overseas send flowers to the people near you, and they will benefit from your local expertise and freshness of the products you sell. Through the Internet you can offer optional extras too, and increase the value of each sale.
• Set up a drop ship business - if you put in the work finding wholesalers who will drop ship (deliver directly to customers) you can save money holding and managing inventory. Many wholesalers have minimum initial orders then will order in any units your customers desire. Items like computer parts, office equipment, lingerie, pet food, bicycle parts and clothing are well suited to this kin of business model.
• Gift hampers - hampers are particularly well suited to online purchasing, especially if they contain well known items from electronics to confectionary. Experiences (bungee jumping, car rides, hot air balloons, wine tasting etc) are a great online purchase too.
• Artists - sell your art online. The Internet is a fantastic way to reach new customers for your work, and to build your name. Secure a domain name with your name and protect your identity online.
• Arts and crafts. Instead of relying on tourist foot traffic, reach out to the world. Get customers before they reach the shores of Australia and get them buying more. Offer them a discount voucher for your store when they purchase something online and they'll not only buy from you online, but buy in your store too. Offer them another discount voucher in their store to buy from you online after they leave.
• Antiques. With an ecommerce website you could sell antique furniture from your home, cutting overheads right away.
• Manufacturers. If you are already manufacturing anything - jewellery, electronic parts, clothing, beverages, confectionary, mechanical parts, sports equipment and more - an ecommerce website can help you find end-customers and resellers. B2B ecommerce stores can help you sell to retail stores too and set business rules and prices for each group of customers you have. Anything that can be delivered can be sold online.
• Anything that is unique or niche - cloth nappies, your own fashion label, hand made clocks, collectibles, confectionary, antiques, musical instruments, fishing equipment, hand made sleepwear, children's clothing, used wedding gowns, lingerie – an ecommerce website is ideal for showcasing them.

If you're thinking about getting started with an online store, look at the leading auction websites and see what sells. Then think about selling those items with your own store, where you list as many products as you want, pay no listing or success fees have your own professional design and retain your own profits.

If you're interested, talk to Osc Works first. People perform web searches when they are ready to buy products, so why not take advantage of it today. Visit the Osc Works website, look at our ecommerce website packages or our portfolio and contact us to find out how we could help you.

Adding sales facilities to your website could turn it from an electronic business card into a highly productive asset.

Does your website make you money or is it just an electronic business card? By adding an online shopping cart to your website, or creating a fully focussed ecommerce-website, you can give customers a secure way to purchase your products and services, and make your website profitable.

More Australians and New Zealanders than ever are purchasing online. For example, a 2007 survey by Visa International recently found 75% of New Zealanders now shop online, with clothing, DVDs, accessories and technology proving extremely popular. In Australia, ecommerce revenue hit $45 billion in 2006 with annual growth averaging about 30%.

Driving this trend online are increasing numbers of people with broadband Internet, the number of online auction sites such as eBay getting more people online, increased costs of petrol (making getting to shops more expensive for customers and the costs of getting the goods to stores higher for firms) and a lack of people who have the time to shop like they used to.

People are busy and demand fast and easy, to buy it now. They're waiting online for the stores to offer them the goods and services they want and prepared to pay for them - if they're offered. In some industries like tourism and holiday accommodation, online is becoming the primary way of searching and purchasing. Those who are not offering ecommerce are therefore losing potential customers and money.

This means there is a huge opportunity for the businesses who want to make their websites more profitable. Surveys show that less than 10% of Australian businesses sell online to this huge potential market and less than 20% have a website. So if you have your own ecommerce website, you could be gaining an edge over your competition irrespective of your size in relation to them. An ecommerce website could help make your business profitable and save you money paying auction, listing or market fees. It's easier to get started and more secure than you may think.

Talk to Osc Works about your situation, and how we could help you make your website more profitable by building your own secure website with our shopping cart software.

If you're a wholesaler or distributor selling products to other businesses, or a retailer targeting business customers, the B2B Ecommerce facilities offered in our ozCart shopping cart software can help you.

Using the Internet to sell to other businesses could help your business through:

• Reducing costs
• Targeting customers more efficiently - through group discounts to specific groups of customers
• Improved inventory management
• Automate payment processing
• Setting and enforcing business rules - such as minimum purchase amounts
• Improving market efficiency - list products and services without negotiating with every customer over every purchase
• Integrate with other systems through add-on customisations you can purchase (e.g. upload products and services to your B2B ecommerce website using Excel).

If you're a retailer, here's how you could use a B2B ecommerce site to compete in the wholesale market for your product, and make money even from the sales of your competitors.

If you can negotiate an appropriate wholesale agreement with a manufacturer or importer, you could sell your product in the wholesale market at the same time as offering them retail. This means you are making a mark-up on the purchase of products from your competitors.

Sound challenging? It's actually quite easy

This process can be very easy if you can obtain an exclusive arrangement with a wholesaler or importer or negotiate a volume discount that allows you to sell to your competitors at a lower cost than they can negotiate for themselves. You then set up a wholesale section of your ecommerce website for B2B sales. The prices will automatically change to the wholesale levels. You can limit the flood of product on the market (and therefore protect your retail business) by imposing limits on who can sign up as a reseller.

Opportunities for B2B ecommerce are significant and can be very lucrative. If you're a manufacturer or wholesaler you can use it to reach out to new resellers and if you're a retailer you can benefit from streamlined purchasing and from the new opportunities that B2B ecommerce creates.

Talk to Osc Works about a B2B ecommerce website for you. Our wholesale pricing options built into our ecommerce Platinum package gives our customers with four levels of pricing flexibility plus many more platinum options.

You're creating a website for your business. Should you buy web hosting and build it yourself? Or an ecommerce package that is ready to go and includes hosting?

If you're thinking of setting up a website or refreshing an existing one, a question that you'll need to decide is about how the website will be managed. Will you purchase web hosting and build your own website, or purchase a hosted website where the provider takes care of the installation and management of the server and you take care of the content?

DIY solution with web hosting

If you're setting up a simple text-only website with a small number of pages and content that doesn't change and won't be added to, then a web hosting solution could be right for you. You start by purchasing the web hosting (which is your space on the Internet) and then build the pages on top of that. There are a number of ways you can do this:

• By purchasing pre-made website templates, installing them and writing your content into them using desktop HTML website packages like Frontpage or Dreamweaver.
• By doing it yourself and using an HTML website package to develop your content and publish it to your website
• Paying a website company to build your website template and install it for you.

The main benefit of a do-it-yourself website is usually cost. You also have the benefit of knowing that you are in control. But things can get tricky if you have a large number of pages you wish to maintain or if you wish to install more complex software like shopping carts.

If you install complex software like carts and are not a technical guru and graphic designer all rolled up into one, things can get very stressful, very quickly. For example, what modules do you install and in what order? How do you troubleshoot payment method issues? What if your customers are contacting you about receiving errors as they go through checkout? How do you set up gift vouchers? What if your order emails are not coming through? How do you set up the database to allow for bulk importing of products? What if your buttons don't display correctly or do not work?

While text-only DIY websites have little room for error, the complexity of the cart, checkout, payment and shipping components of shopping carts make them a huge troubleshooting challenge if things go wrong. How do you install security updates? If you have installed your own DIY cart you won't be able to get support from your hosting provider and could be left trawling the Internet for hours, posting on forums, or paying consultants to fix these bugs. Not a good situation to be in if you have angry customers hounding you to get your site working again.

Hosted solution

More than ever, more complex website and ecommerce applications like shopping cart software, directories, forums, booking sites, real estate sites and car listing sites are being offered as hosted-only solutions. The benefits are:

• You focus on what you do best: running your business
• You don't need to be a graphic designer and PHP programmer all in one
• The provider takes care of installing security updates, optimising the server, fixing application bugs, installing payment methods and configuring the graphics template.

If you're running a small business, you might save costs in installation and support by having your own DIY website, but if your competition is fierce do you really have time to use all your time installing and maintaining your website software as well? Would you do your own signwriting? security? electrical wiring? People who want to focus on their business and not on the technical aspects of their website are choosing hosted solutions for these very reasons.

Osc Works offers both web hosting packages and hosted web design or shopping cart software packages