Since the Covid-19 crisis, people have realized that working from home is not such a bad idea. Businesses have restructured their companies to accommodate remote workers. Even with the availability of vaccines people are still wary of returning to regular work routines. Jobs were lost, businesses closed down but thanks to dropshipping people found renewed hope. This article is aimed at helping readers know how to start a dropshipping business with gift cards to maximize profit.
What is Dropshipping?
Dropshipping is a retail fulfillment method in which online retailers do not stock up on items instead they buy in pieces from a third-party supplier (wholesaler) every time a customer orders for an item from the retailer’s store.
How does it Work?
- Customer orders from the retailer.
- Retailer submits Customer’s order to the wholesaler.
- Wholesaler charges the retailer for the item and delivery services.
- The retailer forwards the charges to the customer.
- Customer pays, the wholesaler packages and delivers the item to the customer.
How to Start Dropshipping Business with Gift Cards
After setting up your store and you get a customer who has paid for a product you can increase your profit margin if you buy a discounted gift card with the customer’s money. After buying the card, use it to pay for the customer’s item from the wholesale store you partnered with. For example, say a customer ordered a pair of jeans from your store and it cost $100 on the main store but you charged the customer $110 all you would be making is $10 but if you buy it the store’s gift card at a discounted price of say $90 you have extra $10 as profit. If you keep selling with discounted gift cards before you know it you would be able to raise capital to actually buy the products outright.
Another way to incorporate gift cards into dropshipping is by accepting them as a means of payment. Most gift cards are quantified in dollars so this means that retailers in countries like Nigeria and Ghana that have been paid with gift cards when the dollar has fallen can sell them on a safe platform at a higher price than when they bought them when the dollar goes back up.
