Here's a different take on the whole e-commerce scene. Whether you drop ship or purchase stock and sell it online is not the key reason for success. Developing a reputation and expertise in your market niche, I believe, is the key element. In other words, distinguish yourself from the growing number of online entrepreneurs, develop repeat business, continuously communicate with your customers, delight them and you'll make money.
Becoming an expert or source of information is key. If you're not blogging, you should be. If you're not offering your customers free content about using products you sell, you ought to. If you're not up-selling and cross-selling on your site, you're losing sales.
Blogging is one of the easiest, cheapest and most effective ways to establish credibility. A year ago, I started writing a blog called MarketingBeyond on TypePad:Link hidden: Login to view
Since I'm an avid mobile phone geek and have sold on eBay, a lot of my posts are phone reviews--some borrowed from my eBay reviews and guides, some from other blogs I write.
A year later, 60% of my blog traffic is from outside the U.S. and 70% of the hits are about mobile devices and mobile marketing. So....I started writing more blog posts about mobile and wireless on Blogger. Along the way, I started inserting links between MarketingBeyond, the Blogger blogs (Mobile Telephone Marketing and Mobile Telephony Innovations). End result: more hits, higher readership.
It's important when you're writing your blog posts, whether you're an expert in animal care or computers, that you don't try to sell anything in your blog posts. It's o.k. to mention what you do and list your e-commerce site, but readers are looking for information on blogs and if you try a hard sell, you're going to lose them.
Better yet, tease them. Write posts about your niche market or the products you sell. If you're into podcasting--very powerful--do recorded interviews with experts in your niche. Let third party experts educate your customers and prospects about what you sell, whether it's technology products or designer underwear.
You'll be surprised how many people will visit your blog and online site because you're different than everyone else. You put out extra effort to help people--and people like doing business with sellers who care.
For further ideas about blogging and podcasting, Google 'MarketingBeyond.'
Good luck selling online!