I feel more confident this week that I will be able to get my business up and running within the next few months. This week we have learned all about how to choose a wholesaler or manufacturer, and we have learned the difference between affiliate marketing and drop shipping.
When choosing a business model for an online business, it is important to think about what you really want to get out of it. Considering your goals, wants, and needs will help you to arrive at your business model. If you would like to sell a product, it is important to decide if you would like to store inventory. Storing inventory can be a hassle if you don’t have the place to keep it. You also run the risk of having a surplus of products and over spending. In my opinion, this type of business model would be difficult for a beginner and it is one that I don’t have interest in.
For the brokers, manufacturers, and wholesalers assignment, we looked at a case study following three people who would like to sell sunglasses online and keep an inventory. They were smart to select sunglasses because they are small and easy to store and ship. They found two different wholesalers to buy their product from; alibaba.com and lawholesaledist.com. I created a rating scale in Excel with the categories price, location, and website. I gave each website a ranking from 1-10 based on my own opinion. Here is my chart:
I had a difficult time selecting either company but in the end decided that Alibaba, the international broker, would be the best option.
The main factor that swayed my decision was dependability; Was the company easy to contact? Did it have good reviews? Was the website up to date and easy to navigate(this one was a big one for me)? Alibaba had the best website with visually pleasing designs, quick links, and helpful ratings for each product and company. However, the loading time of the website was very slow which made it difficult to look for what I really wanted.
LA Wholesalers had a lot of information about each product but no reviews and typos in the descriptions The design also seemed very outdated which caused me to wonder if it was still a functioning business. Website design is such an important factor to consider because it shows a lot about the character of the company. It can show that they are up to date with new customers and are good at managing all aspects of their business in an efficient way. Alibaba was the most appealing in this category because their website felt secure, trustworthy, and up to date on everything.
The group had the goal to “buy, inventory, and sell online.” They have not suggested any time constraints for this business so the time of processing their inventory probably wouldn’t matter as much to them. It would also cost less to ship from Alibaba because of the bulk pricing. Alibaba would be the best choice for this group based on their goals and needs.
For the second assignment, we looked at the differences between a affiliate marketing business and a drop shipping business. Here are some helpful articles that I used for my research:
Based on my research, I decided that drop shipping would be the best for this group. With drop shipping, there are many resources to teach them how to start their website. One of the biggest positives of drop shipping is that they do not need to carry inventory. Instead, they can select a wholesaler to supply them with their products online. The wholesaler will sell the product to them for a low price and they can choose the price of the product to sell to the customer. This is promising because they can determine the prices that will bring in their income. The biggest downside to drop shipping is that they will have to handle the customer service for their company which could take up a lot of their time.
With the skill set and goals of the group, it is easy to see that drop shipping would be the best way for this group to gain the experience that they need. Amy can find the creativity that she desires by finding a target audience and having flexibility in the pricing of their items. Joe can get the experience of finding wholesalers that are reliable and fit their company. Trevor will be able to advertise their company through his marketing skills. They also won’t have to deal with the hassle of inventory which would be ideal if they decide to sell guitars.
Overall this week has given me the confidence that I need to move forward and select a business model and idea for the project that is due next week. I look forward to finally getting things started.