Drop shipping products to online customers can be more tricky than it sounds.  While it is a great way to start retailing products without a large upfront investment of cash, it also requires you to coordinate overseas shipping and maintain a good seller rating on e-commerce websites.  As drop shipping becomes more popular, profit margins are growing slimmer.  Those looking to make money retailing China Wholesale goods need to find ways to distinguish themselves from the competition.  Below are some tips to maximize your drop shipping profit margins.

Sell a unique product! This may seem obvious, but it is still common to see pages and pages of auctions on eBay selling the exact same mobile phone.  For some cell phone models there are virtually no profits to be made for entry-level drop shippers, simply because the price has been driven down so low.  Don’t sell these types of products!  If you are just starting out, you will never be able to compete with the bulk prices of power sellers.  It is better to do the research first to find out which products are in short supply.  This will allow you to mark up the price on that product, netting yourself a nice profit.  You can easily do research on eBay to see the number of sellers currently offering a certain product.  However, this can be overwhelming given the multitude of products available on eBay.  Another way to find products that may be in high demand is to check SaleHoo’s Research and Analysis Lab.  This site allows you to see the potential success rate of selling specific products.  In addition, it will suggest related niches that might be profitable, and recommend e-commerce sites that have a limited supply of certain items.

Double-check your supplier’s stock. Back orders can kill a sellers feedback rating faster than a scam artist hacking your account.  This occurs when you sell an item online that your supplier does not currently have in stock.  If you are drop shipping exclusively (and have no stock yourself), this can seriously delay delivery of the product that your buyer is expecting.  Don’t let this happen to you!  Make sure to check ahead of time to ensure that your auction items are currently in stock, and have a backup supplier just in case.  This will allow you to complete orders in a timely manner, resulting in a high feedback rating, more buyers, and more profit.

Take advantage of all the e-commerce options. Apart from eBay, there are plenty of other sites available to sell goods online.  Amazon, Craigslist, and Bonanzle are all viable competitors to eBay, and you may find that some products auction for very different prices depending on the site.  Some items that are in constant supply on one site may be rare on another.  Finding which products are most scarce on each website will allow you to maximize your drop shipping profit margin.