7 Advantages Why Selling Products Online Through Dropshipping Companies Might Be A Good Idea

Selling your products through the online market is a better opportunity to take your business to a wider venue in order to gain more customers. The advent of Internet has become life more convenient. Even the usual shopping and doing business is brought to this medium hence having a greater chance of tapping more clients globally. Many business companies have taken advantage of this technology to maximize profits and expanding your market.

Selling products online via dropping shipping companies is considered a good idea because of the advantages it can give to the manufacturers. It is also a seen income generating opportunity for those who are willing to act as dropshippers to augment their income.

Drop shipping is a delivery method involving merchants who accept orders and processing the same and the customer receives the product directly from the one manufacturing it. The merchant is considered as a middleman and gain income from the residual value of wholesale and retail price of products sold. Dropshipping is now an online method of doing business and getting into the mainstream.

If you have been weighing down your options whether to do online business via dropshipper consider the following advantages and be certain with your choice.

  1. With dropshipping, you have access to wholesale products. This is a good advantage since you get quality products to sell which is sure to attract potential customers. You can also get involved with a wide variety of product line to maximize earning potential.
  2. Selling risk is minimized through dropshipping since you don’t need to hoard and stock up more inventories. Since trend changes anytime, it is not safe to keep too many inventories which will result to unfortunate financial loss.
  3. No minimum order required. One good advantage of dropshipping is that you can order the product you like in any quantity you like.
  4. Startup capital is minimal. Selling products online through this method do not require significant investment. You can sell products anytime you want and no need to keep too many stocks.
  5. No delivery worries. Another advantage of dropshipping is that you don’t think of delivery rather focus on effective marketing of products through online.
  6. Dropping is a practical solution for those who are looking for supplemental income. If you have a full time job, you can continue doing your routine and during your spare time, market and sell products that you like.
  7. Dropshipping helps you cut-down costs. Opting for dropshipping will keep your expenses variable and do away with fixed overhead cost like inventory.

If you have been looking for a business opportunity which is viable to undertake, then why not consider dropshipping companies in selling products online. This can be your chance to expand your market with fewer worries. Everyone has now equal opportunity to augment and maximize earning capacity.

China Suppliers Up Ante on Product Safety

Following a series of tighter consumer protection laws, makers are emphasizing product safety while contending with the high cost of compliance.

Faced with stricter safety regulations in key export destinations, companies in China are allocating more resources to product testing and emphasizing high-quality materials despite the pressure these are putting on manufacturing outlay.

For most suppliers, adopting complicated and far-reaching directives is not the main challenge, but the high expense of compliance is.

Many of the new safety standards require makers to conduct more tests on a greater number of chemical substances. As a result, certification fees for some products have risen by as much as 50 percent, and even doubled in a few cases. CPSIA evaluation for toys, for example, can cost up to $1,000 per model depending on the complexity of the design.

The average toy company now spends $60,000 to $100,000 on examination fees every year. One of the biggest toy makers in China pays more than $2.9 million annually on testing, much higher than the yearly revenue of small suppliers.

Lamp specialist Heshan Mingkeda Industries Co. Ltd spends about $3,000 for SAA certification alone, which takes one or two months to acquire, according to the company’s sales manager Mini Yip.

In many instances, fulfilling safety requirements involves replacing infringing materials with compliant substitutes.

Suppliers of food-grade products, for instance, have already stopped using BPA, an organic compound found in many plastics. In a range of consumer goods, further modifications include the shift from PVC to POE, and from PC to phthalate-free PES, glass and nontoxic silicone.

Battery makers are striving to develop or source safer anode and cathode materials. Some have begun to replace conventional lithium cobalt oxide formulation with lithium iron phosphate, an alternative with lower environmental impact. Other efforts are aimed at improving protection against overcharging, discharging and heating.

But in most instances, “safe” alternatives are costlier than the originals. 3P PVC for instance, is 30 percent more expensive than regular PVC but is 30 percent cheaper than 6P.

Similarly, A5-grade melamine goes for $2,200 per ton, three times as much as the same volume of the A1-grade variant at about $735.

In some cases, imported materials, which invariably cost more, are favored over domestic equivalents. Imported PP, for instance, is 20 to 30 percent higher than domestic versions, at $1,800 to $2,100 per ton. Overseas-sourced organic fabrics, likewise, are 20 to 30 percent more expensive than local variants.

Despite the high outlay, some companies prefer to source abroad for consistent quality. Foshan Geuwa Electric Appliance Co. Ltd sources 80 percent of materials and components for its blenders and juicers overseas, while the rest are purchased locally.

Besides higher raw material expenses, makers have to contend with increases in indirect costs, particularly those related with monitoring the supply chain to ensure that all manufacturing inputs meet specifications.

According to Tim Corrigan, president and CEO of the Quality Assurance Institute, “The root cause of the problem (of product quality) is control of the raw material, application contaminations and subfactories. To fix this requires an overhaul at many factories. The solution calls for significant transparency, diligence and dedication.”

Generally, material vendors are able to offer third-party certification. But for those that cannot do so, companies need to send their own QC staff to supervise the production at the material suppliers’ factories.

More exporters are now limiting their sourcing to suppliers that can provide certified inputs. Still, collection and documentation of every component utilized requires time, effort and money.

In addition to testing and materials quality, manufacturers are also enhancing their in-house QC facilities.

Lai On Products (Industrial) Ltd, a Hong Kong-owned maker of crayons, modeling clay and paint has set up a microbiological laboratory at its factory in Shenzhen, Guangdong province. Certified by the China National Accreditation Service for Conformity Assessment, the lab is comparable to a chemical-testing facility. The supplier also sends its products to third-party agencies to ensure compliance with ASTM D-4236 and F963, Toxicological Risk Assessment, EN 71, CPSIA, California Proposition 65 and REACH requirements.

Some baby stroller factories are now equipped with wheel performance, dynamic durability and drop-testing facilities. At the same time, many stuffed toys and children’s garments makers are purchasing more needle detectors.

Any measure to comply with safety regulations undoubtedly adds to the cost of production. Suppliers estimate material and certification expenses have risen about 10 percent in recent months. Many companies try to absorb the additional expenditure, but this is not always feasible.

While investment in facilities can be recovered in the long term, the same cannot be said about testing fees. When order quantities are low, as in the current environment, makers are often unable to recover money spent on certification of specific models. Shorter product life cycles due to fast-changing customer preferences also give manufacturers a narrower time frame to recoup compliance outlay.

Some suppliers try to negotiate bigger orders or ask buyers to shoulder the cost for certification. But clients are averse to both options in view of the current economic conditions.

Typically, tier 1 manufacturers are able to comply with regulations more seamlessly due mainly to their stable financial resources.

“Enterprises that cater to major OEM customers likewise have the easiest time adjusting to the new rules as they have better access to information,” said Cody Wang, chemical testing deputy general manager at Intertek. “They are usually able to make the necessary changes months in advance of enforcement deadlines.”

But for small and midsize factories that have less capital to invest in equipment and prohibitive testing fees, conformance can be a daunting task.

Testers can also be partners

The professional testing industry is booming amid the rising safety trend. With the increased need for product evaluation, the past few years have seen an influx and expansion of third-party laboratories in China, including SGS, TUV, BV, Morlab and Pony Test. These organizations also provide free training on the latest regulations, and inform companies on which merchandise needs testing and how.

Regulatory agencies in the US and the EU have likewise been active in helping suppliers get up to speed.

Workshops on the new EU Toy Safety Directive have been organized, with the support of the EU-China Trade Project and the Directorate-General for Enterprise and Industry of the European Commission.

In October 2009, the third CPSC-AQSIQ Summit was held in Wuxi, Jiangsu province. With a theme of “promoting best practices by Chinese manufacturers and US importers to maximize product safety”, the summit was attended by CPSC chair Inez Tenenbaum.

In her keynote address, Tenenbaum reported that in fiscal year 2009, toy recalls went down to 40 from more than 80 in the preceding period. The information exchange between the CPSC and AQSIC about recalls of China-made goods was emphasized, as well as the need for frequent training sessions.

The AQSIQ has been educating China toy makers about safety requirements in the US and on strengthening quality controls. The CPSC has arranged to set up an office at the US embassy in Beijing to help promote compliance with US standards among local suppliers.

Local governments and trade organizations are also vigorously pushing companies to bolster the image of “made in China” products.

At the Canton Fair last fall, the Ministry of Commerce distributed export quality and safety manual to exhibitors.

Organizations such as the China Council for the Promotion of International Trade have been sponsoring seminars for business owners and local government officials on product safety in Southern China.

Regulations getting tougher

The safety bar that China suppliers must hurdle is getting higher by the year as new international and domestic standards are put into place.

In December 2009, the European Chemicals Agency announced the addition of 15 chemicals to its candidate list of substances of very high concern (SVHC) under REACH. Among the inclusions were diisobutyl phthalate, a commonly used plasticizer, and lead chromate, a coloring agent.

REACH has wide-ranging impact in the EU as it requires disclosure of information on hazardous substances contained in every product. The directive is on top of specific regulations such as RoHS for electronic goods, EN 71 for toys, and Regulation 1905/2004/EC for materials that come in contact with food.

For toy makers, the CPSIA/HR4040 in the US and the EU’s New Toy Safety Directive or 2009/48/EC amend existing rules substantially and impose greater restrictions on suspicious chemicals. The latter regulation limits 19 metallic elements. It also bans 55 fragrant substances and warns against a further 11 types.

Other baby and children’s products and toys must pass the standards for EN 71, CE, WEEE and EMC in the EU, ASTM-F963, CPSIA, FDA and UL in the US, AS/NZS/ISO 8124 in Australia and New Zealand, and ST2002 in Japan.

Following the US and EU’s lead, Japan, Australia and even Malaysia are modifying their existing toy safety regulations, particularly on flammability and the use of phthalates and lead.

Lithium battery exporters have to comply with UL1642 for cells and UL2054 or FCC for battery packs in addition to EMC and RoHS. Designs shipped by air are also obligated to undergo UN38.3 testing. In markets where FCC, UL and RoHS approval are not necessary, passing the UN38.3 is sufficient.

For products that come in contact with food, companies have to comply with assorted standards such as UL, CB, CE, GS, ETL, CCC, FDA and LFGB. Most EU countries recognize Germany’s LFGB because of its stricter requirements.

Aside from international regulations, suppliers have to follow domestic guidelines for a number of goods.

Garment trimming makers, for example, need to comply with three sets of requirements for cords and drawstrings to be used in children’s clothing. Issued by the General Administration of Quality Supervision, Inspection and Quarantine, and Standardization Administration, the GB/T 22702-2008, 22704-2008 and 22705-2008 are based on US’ ASTM F 1816-97(2004), the UK’s BS 7907:1997 and EN 14682:2007, respectively.

In addition, some existing national standards for trimmings have been revised and now have provisions that monitor and prescribe allowable levels for harmful substances that are even lower than European regulations. The GB/T 17592, for example, keeps azo content at 20mg/kg whereas it is 30mg/kg in the EU’s EN 14362.

Likewise, the China government issued a new standard for melamine-formaldehyde products used as food containers and packaging materials. This comes after several foreign markets banned low-end models due to potential chemical leaching.

The regulation seeks to ensure safety by prohibiting the use of urea formaldehyde resin as the main material. A1 and A3-grade melamine dinnerware pieces, which contain 70 to 90 percent of this substance, tend to melt at high temperatures and may cause a health hazard.

To ensure compliance with the safety code, the government has required suppliers to obtain a production license from the General Administration of Quality Supervision, Inspection & Quarantine.

Selecting the Right Product Or Service to Sell Online

Your selection of a product/service is of critical importance. The subsequent steps in your action plan will be determined by what you are selling. When looking around for products/services, think about the following:

Is there an existing demand for this?

In general, you should fit a product to an existing market & not try to create a market for a product. Although the odd freak product like the Pet Rock or Cabbage Patch Doll defies this rule, the majority of ventures which try to create a market for a product are dismal failures. In selecting your product, remember to give people what they want not what they need – people generally ignore what they really need because they are distracted by what they want. Successful products will generally fulfill one or many of people’s dominant desires:

• to be healthy
• to look better
• to attract the opposite sex
• to make money
• to escape physical pain
• to save money
• to feel safe
• to be self-confident
• to be successful
• to save time
• to have more leisure time

Sex, Health, Self-Improvement & Money are areas which tend to sell very well, but the competition is ferocious. If you want to crack these markets, don’t be discouraged by how many others are selling – they are selling because people are buying. Just do it better!

Online porn is probably the biggest seller on the net, but there are other less offensive ways to tap into the sex market. You can sell sexual self-help books (“How to Become a Better Lover”) or sexual products (specialty lingerie, sex toys, erotic fiction). Let your imagination flow. The point is that there is a huge demand for all things sex.

Health is another great market because so many of us are concerned with living healthier & longer. The diet craze is a multi-billion dollar industry. Fitness is also a money maker; just check out the late night infomercials. Herbals & vitamins are a huge market as well. Magnet therapy is a booming industry.

Self-improvement/motivation is another burgeoning market. These products are generally book or course based. Everything from “Unlocking Your Infinite Personal Potential” to “How to Give & Get the Most from your Relationships” exists. Don’t think self-improvement is big? Watch Oprah for a few days. Her show reaches millions daily & is completely focused on self-improvement. Every self-improvement author who appears on the show is guaranteed a best-seller. There is a shift going on in society which sees people looking for inward change. Now is a good time to be a supplier of such materials.

Money is huge as well. There are thousands of “how to make money” products which generally target the home-based business segment. Infomercials on get rich quick schemes are all over the dial on late night TV. These are big & most of them offer distributorship deals. Almost everyone’s ears will perk up if you tell them you have a way to increase their cash flow without a lot more work. That’s why these programs sell like hot cakes – we are all looking for the easiest way of the 30 year treadmill.

Products in high demand offer the buyer a quick & easy to implement solution to a problem. The following products are proven winners:

• kitchen products
• diet products
• exercise products
• pet products
• money-making systems
• cosmetics
• self-defense products
• home security products
• home remedy (herbal/vitamin) products

If you can sell consumable products that require regular replenishing, you will insure that most 1st time customers become lifetime buyers. But even these guidelines are a little meaningless because there is really no absolute way to know if a product idea is worth investigating without doing some legwork to test the demand for that product.

There is no absolute rule for what products sell – it’s an ever changing landscape, so the best approach is to learn a repeatable process for selecting what you can sell profitably.

A good approach to picking winning products is to 1st find a market, then identify products that satisfy the demand already present. If you get caught up in product selection without tying to an existing market, you are dead before you have begun…This is the critical mistake that most business start-ups make.