To the uninitiated, drop-shipping might sound like a complicated operation including helicopters, products in parachutes and ships.
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But it’s actually quite straightforward: it’s a supply chain management method, and it’s made teen millionaire, Jack Bloomfield, a very wealthy man.
Speaking to Yahoo Finance Editor-in-Chief and New Investors: My Story host Sarah O’Carroll, 17-year-old Bloomfield explained how drop-shipping helped him make millions with his eCommerce schemes.
“Essentially, drop-shipping is a way to sell products direct to the consumer without actually having to host any inventory,” Bloomfield said.
“So when we think about eCommerce, you think about the guy that's got 10,000 of something stacked in their garage or wrapped in the shed at the back of their bought from China and they're trying to sell. Whereas with drop-shipping, you can essentially sell any single product you could ever want.”
Instead, when you receive an order, you pay the supplier which will then ship the product directly to the customer.
Bloomfield got the idea of drop-shipping after watching a YouTube video, and went on to teach himself how to use the model in the best way. Today, he owns sites like Best Bargain.
But it’s not just the model: Bloomfield believes only some ideas will succeed using drop-shipping.
“Drop-shipping certainly is a saturated market and [success] depends on what product you pick.”
He said finding a niche is important, and often an easier way to make money drop-shipping than by competing with established companies.
He uses a Facebook extension, Turbo Ad Finder, to look at the advertisements performing highest on Facebook, then considers whether he can also sell similar items, or if the market is too saturated.
But drop-shipping is far from a get-rich-quick scheme, he added, cautioning people from getting into it with the sole purpose of making money.
Instead, it’s the people who enjoy selling products online and using social media to advertise them that will go further.
“[People who think] ‘I want to go ahead and I want to spend some time and I want to get this right, I'm committed and more importantly, I'm dedicated and I'm going to make this work so that I actually really enjoy it’ - they're in it for the long run,” Bloomfield said.
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