Drop Shipping, Affiliation, and More OH MY!

This week we learned a lot about 2 different business models.  One business model was drop shipping, which I had never heard of before, the other was affiliation.

Let's start with drop shipping.  Drop shipping is a situation in which you offer the product for sale.  However, you are not the one that keeps the inventory or ships the inventory you've effectively contracted out to another company to process your orders. (ish)

In some situations this would be an ideal solution, for example if you were selling a fashion accessory.  The client would select what they wanted to purchase from your site, you would reach out to your drop ship contractor and pay the fee, and the drop shipper would in turn ship the item that was purchased from your site.  However, one should know that if there are any issues where the client isn't happy with the product you are the one that is going to have to refund the money etc.  So this is good for some situations, and not so great for others.

Then there is affiliation.  Affiliation allows you to build a site such as a blog, informational, etc.  Then you are "contracting" with a larger company (think Amazon) and place links to their items.  The user simply clicks on the link on your page, is whisked away to your affiliates page and they purchase what they were wanting.  In return for you funneling traffic to their site the affiliate gives you a "cut" (commission) for the sell.

The question is, what's really best?  The answer isn't a straight one... It all depends on what type of site you are wanting to build.  Do you want something that is a very traditional store front?  Or are you looking for something with more creative license?  The answer to both of those will determine which one is your best match.  Creative license and freedom is more available via the affiliate program, while a traditional storefront would be quite reasonable to utilize drop shipping.

Choosing a Business

This week we have been discussing business models and how to choose the type of business for our online business we will be creating in this class.

Before reading through some of the scenarios and really gaining a solid grasp on online businesses I had assumed that the only type of online business was that of a E-commerce.  This would encompass the typical site that would offer some sort of product for sale.

However, I have learned this week that there are tons of other ideas out there, some in fact that don't require any actual "sales" on your part.  Some of these would be affiliate business model which allows someone to have a site that directs the viewer to a link where they can purchase an item.  Others sale space for ads by other companies... the list of ideas is fairly deep.

One of the most important things when regarding what type of business one should choose is to keep in mind key words and their competition.  We also learned to look at that and take that into effect this week.  The hardest part of the keyword search, is simply coming up with several different key words for your idea of a product or service you think you'd like to offer.

As a long time crafter, and having a mother who has always dreamed of having an online presence to sale some of the handmade goods we make, I am 90% sure I will be attempting the E-commerce model and selling some of our one of a kind handmade goods. Though I know it won't be perfect, I am viewing this as an experience and an experiment.  I think this class, and project will be a wonderful time to get my toes wet, and be able to "tinker" and look at different avenues with regards of getting an online presence for our handy crafts.

Here goes nothing!