Drop-shipping is a type of retail business where the company doesn’t have to worry about keeping the products you plan to deal with in stock. Instead, what the company has to do is to reach a partnership with a wholesale supplier that manages its own inventory. In this business plan we will describe the drop shipping business as well as the financial and marketing plan for the company to grow and position itself properly within its market.
Drop Shipping Business Plan
The drop-shipping business model is mainly based in a retail fulfillment method where a store does not necessarily keep the products it sells in a warehouse or a store of some sort. Instead, when a drop-shipping company sells a product, it purchases the item from a third party and has it shipped directly to the customer, hence, the merchant never gets to see or handle the product in question. This part of the plan will further explain the business services and characteristics.
The drop-shipping business is a part of the eCommerce industry which is a very large industry that is creating business opportunities for lots of entrepreneurs all across the globe and generating multiple billions of dollars annually. The industry generates well over $1 trillion annually on a global scale. For example, in 2012, eCommerce sales topped $1 trillion for the first time in history and the figure is still growing. In this section of the business plan there is a complete description of the industry and how to position the company within its target market and segment.
The operations plan of the drop-shipping company focuses on giving all customers a first class treatment irrespective of the quantity of products they purchase or the part of the world they reside in. The company should use powerful CRM software to manage a one on one relationship with customers no matter how large the numbers of customers’ base grow to. In this section of the business plan you will find key details regarding suppliers, the web-based platform and the company’s internal processes that will ensure the business’ success.
The marketing plan of the drop-shipping business plan will center on reliability, swiftness, safety, pricing, secured payment platform, and above all excellent customer service and experience. The company will ensure that whenever customers place orders for goods, they will get it delivered within the stipulated time frame. The business will put the above stated in place, to avoid struggling to retain customers and at the same to win over new clients.
In the drop-shipping business there is a wide range of available customers. In essence, the target market should be defined according to the products or services the company aims to provide. In view of that, the business plan presents a market research and the ideas of what the target market is expecting from the business, how large it is and how much potential it offers.
The promotional strategies described in the business plan for the drop-shopping company mostly revolved around online strategies to create brand awareness. The company’s main customer base will be acquired through social media ads and SEO-related strategies to position the website among consumers.
The financial plan’s major goal for the drop-shipping company is to create a business that will survive off its own cash flow without the need for injecting finance from external sources once the business is officially running. In this chapter of the business plan you will have a clear understanding of the financial aspect of your drop-shipping company.
This section of the business plan will explain the source of income for the drop-shipping company, which is the online retailing of a wide range of products from world class brands in the following product categories: beverages & cigars, children, computing, events & tickets, fashion, home appliances, mobile phones and more.
In this section of the drop-shipping business plan there is a list of the major expenses for the company in order to run the business. These expenses include staff salaries, hosting expenses, online advertising expenses and others.