Drop ship- there’s a term you don’t usually hear everyday. What exactly is drop shipping and why is making such a buzz in the Internet these days?

This article tries to give some useful information about drop shipping and how people can engage in such activity.

Definition

Drop shipping is an effective and simple way to get into e-commerce. It is a strategy that is employed by many online sellers today to beable to lower their stocks on hand, cut down their delivery time and decrease shipping costs. It literally allows owners of websites to be able to send a single order or low quantity orders of customers to the companies who make the products. These product makers deliver to the customers. The drop shippers literally take care of the order taking of the products.

Advantages

Drop shippers can be able to purchase products in large amounts and they will be able to offer the best prices in the market with regards to the product and shipping expenses. They usually have wholesale prices which are really beneficial for buyers.

If one will avail of drop shipping services, he will be able to get much needed flexibility in terms of developing a whole product range. Another great thing about drop shipping is that no additional capital investment is needed and the danger of over-piling the stocks is minimized.

A business owner can focus more on getting his hands on the market and analyzing their needs and wants instead of wasting too much time worrying about delivery and inventory.

Dangers

If one is interested in hiring the services drop shipper, he will be approached by many companies and try to make arrangements to be able to generate much needed extra revenues for their businesses. However, one must be able to consider several important points before getting into a formal deal with such companies. Here are some tips on how to go about being a drop shipper:

-Don’t be impulsive

Don’t say yes immediately to the first drop shipper which approaches you. There are a lot of them out there. The purpose of this move is to be able to get a feel of the general price points out there in the market.

-Know the costs

It’s important for a drop shipper to be knowledgeable with regards to the costs of freight services and handling services.

-Paying schemes

There are a lot of important things to note when talking about paying schemes with drop shippers. Questions like- “will the drop shipper debit your card on every order that you give or will you be able to get payment terms on a monthly basis?” should be asked.

-Integrity and credibility

As with any other business deal, one should be able to know some things to be able to assess a drop shipper’s integrity. Things like years of existence, customer service, expertise on shipping matters should be taken into consideration.

Drop shipping is really a new way to be able to generate money through e-commerce. It’s one of the revolutionary schemes that have been brought about by the Internet. However, as with any other income generating businesses out there in the web, the industry of drop shipping should be dealt with keenness and wisdom. In dealing with drop shippers or being a drop shipper, one should be cautious of the different people that he works with to be able to avoid wasting time and money.



Thanks to Michael Contaro for contributing this article to our Wholesale blog:

Making Money Online

What is Drop Shipping? Drop shipping can be a very effective and simple way to get involved in ecommerce. Many established online merchants are now turning to drop shipping as a method for minimizing stock on hand, decreasing overall shipping costs.

Drop shipping allows web site owners to send single/low quantity unit orders gathered on their web sites to manufacturers, or major warehouses, who in turn “drop ship” the items directly to the customers.

What are the Advantages of Drop Shipping?

- Because a warehousing company can buy in huge volumes, they will also be able to offer you the best prices on products and shipping, which will return a greater profit to you.

- There’s no capital investment and no need to invest in inventory.

- Using drop shipping allows you great flexibility in terms of product range - promote a dozen items or promote a thousand!

- Instead of worrying about inventory and delivery, you get to focus on listening to the market and discovering the products your visitors you want.

What Do I Need to Know to Select a Drop Shipper?

Many companies will have an interest in teaming up with you in a drop shipping arrangement as it’s an easy way for them to generate extra revenue, but there’s a number of points to consider and things to look out for:

Pricing Points

Don’t accept that the first drop shipper you come across unless they are willing to provide you a “Best Price Guarantee.”

Drop Ship Fees and Charges

Some companies will have a handling fee over and above freight costs - it’s important to know all the costs involved so you can calculate your profit margins accurately.

Shipping

Are they using small private shipping companies or UPS? Will they ship internationally? You’ll want to be sure that their shipping methods will ensure your clients recieve their orders in one piece.

Also, keep in mind that you may need a specific type of shopping cart in order to handle drop shipping. Many shopping carts only allow for one “ship from” zip code in the configuration for freight calculations. If you are dealing with a number of drop-shippers you may have dozens of point-of-origin zip codes - and this can be a real headache if freight is based on distance.

Accounts

Will the drop shipping company automatically debit your credit card on each order you submit, or can you get monthly payment terms? When you are starting out with a company, they are unlikely to offer credit, but it’s good to check if this will be possible once you’ve established credibility.

Support, Returns, and Refunds

The last thing you’ll want is to be caught up in a nasty situation where you have a number of returns - and have to cover the bill. Ask the drop shipping company about their return policy, what kind of support they’ll offer you for their products and about any guarantees associated with their products - and get it in writing.

Credibility

How long has the company been around for? Do they respond to your requests for information rapidly and professionally? Young companies have the habit of going belly up quickly, or growing too rapidly and as a consequence basic good customer service suffers.

How Do I Get Started in Drop Shipping?

It’s fairly simple:

- Set up a web site that includes a Shopping Cart and credit card processing facilities, or setup an eBay or other auction account.

- Find suppliers of products you wish to sell that incorporate drop shipping as a business method.

- Open an account with them.

- Gather content and images relating to the products you’ve chosen, incorporate them on your site and shopping cart.

- Collect the order and payment from your site.

- Provide the supplier with the customer details.

- The supplier then bills you at the special price you have agreed upon; fulfills the order and sends it to your client - in most cases with labels referring to your business/web site instead of the company.

To Your Wholesale Drop Shipping Success!



Thanks to Rick Calligaris for contributing this article to our Wholesale blog:

How to Make Money Online

If you sell on eBay, read this now. You’ll discover the shocking truth about drop shippers and why you should avoid having them as your only product suppliers.

At least 99.99% of all Internet drop shippers sell their products for much more than you can buy them yourself right off eBay. Alarming, isn’t it?

It seems unfair to us eBay sellers. Why don’t drop shippers sell their products cheap enough for us to make money? Well, it’s simple. Drop shippers have to make money too and there is simply not enough working room in the prices to allow both sides to make a profit.

But, with a little work and a little knowledge, you can get the same products they sell for even cheaper than they do! And, yes, you read that correctly. You really can buy these same products for just as inexpensively as or even less expensively than they do.

Many times, you may feel that drop shippers are trying to cheat you. This isn’t necessarily the case. Drop shippers can make you believe they are the cheapest source for their products. If they didn’t, they would quickly go broke.

So why do people buy from them? For one, some people are desperate for money to pay those overdue bills. If you are like most people who try to make a living selling on eBay, you have undoubtedly looked into––or possibly even used––a drop shipper to at least get something to list. Sadly, after you listed the item you probably found that there were other sellers offering the same item for much cheaper than your drop shipper even sold it to you.

Believe me, I know how frustrating it is to wonder why nothing sells, especially when you (supposedly) received it for the “lowest price anywhere.”

Please don’t misconstrue what I’m saying––I do firmly believe that most wholesale drop shippers are good companies that offer good products. And, yes, it is possible to find products from drop shippers that are cheap enough to sell for a profit and make money on eBay.

That said, I don’t see a viable way you will ever make a living using drop shippers. At best, you might be able to make a couple hundred dollars per month. And even that would take many hours of work and lots of frustration.

But, if you do want to find products that will sell using a drop shipper, just follow these easy steps:

1. Find a product category on the drop shipper’s site that interests you and that you have some knowledge of.

2. Get an exact description of the product and the cost.

3. Conduct an eBay search for the exact product. If there are no current auctions for that product, try checking completed sales.

4. Compare the sale price with the price for which you can purchase the item.

5. Make sure you compare the EXACT same product. Using a product that is close could include many variables that would make a difference in its sale price.

6. Check the shipping and handling prices for these products on eBay to make sure the seller is not low-balling the product’s sale price and making his/her money on the handling fees.

7. If the product has a successful record of selling and is the exact same product that you’re researching, then look a little closer as to whether you should list it or not.

8. If you do decide to list it, make sure that (after you deduct all of your fees, including PayPal, eBay, Auction program, etc.) you are earning enough per hour to make it worth your while.

9. Choose an amount you will work for and don’t get caught trying to sell items only to make $0.83 per hour. It will only waste your time. Spend your time finding high-profit, low-risk items.

10. If all the numbers work, sell the item! Then start trying to find new items and add additional products.

You might only find 1 in 50 or 1 in 100 products that you can get for a low enough price to make a good profit. If you’re lucky, when using a wholesale drop shipper, you may locate a product with a gross profit of $3 to $8 per piece. That’s not bad, but definitely not great. You would have to sell a whole lot of them, just to pay your car payment.

I don’t know about you, but working this hard and putting in that many hours does not sound like fun to me. You may as well get a job at a fast-food restaurant and save your energy. The point is that you will never make a GOOD LIVING using these drop shippers.

You could make enough to have a little extra spending money while you are working to find these products yourself at below wholesale prices. That is the ONLY reason I would recommend using them. To further demonstrate, let’s put some numbers together and see exactly how you can make a couple hundred dollars per month using a drop shipper.

For example, let’s say you found a product that sells for $20 and has a net profit of $8 per piece (we are shooting on the high side here). Without being a math genius, you can see you would need to sell 30 of these products to gross $600.

Follow along, as I want you to see the shocking truth about these wholesalers. Just by searching around myself, I found that you would probably spend a good 12 to 24 hours searching for a product with which you could earn $8 each by using a drop shipper.

Most likely, you would only have these great finds once or twice per month. The reality is that you can only list so many of the same products and expect them to sell. Drop shippers won’t normally have a wide range of items that would generate that kind of profit anyway.

One more thing to keep in mind: Even if you do find a potential seller, it’s likely that hundreds of other eBay sellers are trying to sell that same product from the same wholesale drop shipper.

So take your $600 gross from the example above. Then deduct your fees of about 60%, which includes the cost of your product, eBay, PayPal, etc. This leaves you with $240 for 12 hours of work. That’s a little bit over $20 per hour. Not too bad, but remember, this is a best-case scenario. You would have to do that a few times per month to make any real money.

Time-wise and profit-wise your best bet is to never let your only product supplier be a wholesale drop shipper. Otherwise, you could easily get yourself into financial trouble.

I teach all my members and customers that the ONLY way to make big money is to bypass these wholesale drop shippers. That said, I do think you can use them while you are building your own EXCLUSIVE list of product suppliers.

Surf around eBay. With a little research, you’ll find that there are literally hundreds of categories in which you can sell to make a living. So take the time and do your homework. By being a smart buyer and seller you will profit much more than you ever thought was possible. Now, get out there and start selling



Thanks to sebastian foss for contributing this article to our Wholesale blog:

Dropship Home Based Businesses

If you are a person who is considering going into selling goods online through the process of drop shipping, what factors should you consider when you choose a drop shipping directory? It is mostly a personal choice, but any serious drop shipper would want to do business only with a drop shipping directory that he or she can trust.

The best drop shipping directories are often the most reliable ones. Why should you entrust your online selling business to a drop shipping directory that could not be counted upon? One way of checking whether a drop shipping directory has a good reputation or not is by checking product reviews written about them. You can also check the Better Business Bureau if there are complaints lodged against them.

Given that reputation for reliability is very important, what other factors should you look for when choosing a drop shipping directory? Here are three ideal features of a drop shipping website that will tell you if a particular website is worth looking at.

The Size and Quality of the Supplier Database

The size of the supplier database possessed by the website is a factor that you should consider when choosing an online drop shipping directory. The database should be big enough to allow you a variety of choices when it comes to selecting the kinds of suppliers to work with and the kinds of products to sell. It is always empowering to work with many choices because it allows you to make better business decisions.

The quality of the listings should also matter when you are evaluating a drop shipping directory. The products carried by the suppliers should have well-known brand names with high quality, not just obscure ones from some third-world country. The suppliers themselves should be reputable and reliable, pre-verified by the directory before they are included in the list. This should lessen the risk that you will have to face whenever you do business with these suppliers.

Research Tools

The wide range of products to select from the drop shipping directory should not be the only factor that would empower you to do your business. The directory should also have market research tools that will allow you to make more intelligent and more profitable choices.

A market research tool, in whatever form it takes, can be very handy and very informative. On the basic level, it should tell you how high the demand for the product you are thinking to sell is, how profitable it would be to sell it, and how easy it would be to push it to buyers. Having this information in just a few clicks helps in making product selection more efficient for online sellers.

Learning Resources

Another thing that you should look for in choosing a drop shipping directory is if it has learning resources. This would be of great help to you if you are just starting out in the business of wholesaling and drop shipping. The learning resources could come in the form of articles, podcasts, e-books, radio transcripts, video courses and other such materials. It would even be better if you can access these materials for free.

These three features are ideal in a drop shipping website. Try to look for these features when you consider an online directory to join.



Thanks to Greg Morrison for contributing this article to our Wholesale blog:

Wholesale Designer Handbag

It seems everyone has at least one of those memories. Some of us have many of them! So, wisdom has taught us the following: When you are learning to do something new, it’s common to make mistakes. Often our mistakes are the real lessons in life. We make mistakes because we simply do not have the past experience to know right from wrong. We can carry this same wisdom over to the world of drop shipping.

There are many Website owners trying to find authentic drop shipping companies for their online retail business. An authentic drop shipper is a supplier of wholesale products who will drop ship single item orders direct to your customers. Our business (www.hienotedirectory.com) is focused on researching and publishing information about authentic drop shippers for Internet based retailers. Our experience has taught us the do’s and don’t of identifying authentic drop shippers. Let’s now cut to the chase. In finding an authentic drop shipper, it is important to avoid the three M’s. What are the three M’s of drop shipping?

(M)inimum orders (M)iddlemen (M)embership fees We are going to examine each one of these to get a better understanding of their meanings, and how they impact you as an Internet retailer.

Quick Lessons For Success

Okay, let’s see:



You have your website running.



You can accept payment from customers.



You have good drop shippers to supply product…or, a least you are thinking you do. How do we know for certain?



As a quick check, we are going to validate the last bullet by seeing if we avoided the three M’s of drop shipping.



Minimum Orders. An authentic drop shipper does not require you to buy minimum amounts of product to do business with them. An authentic drop shipper will drop ship in single item quantities to your customers. Sometimes, companies require minimum orders because they cannot absorb the cost structure of single item drop shipping. Drop shipping is generally more expensive to do for the supplier. To offset their costs and unload the products, they will require you to order product you do not need. As an online retailer, you will want to avoid this situation.



Middlemen. This is the classic, unnecessary, middle layer of distribution. Middlemen, as the name implies, are the people in between you and a drop shipper. When you place an order with them, they order product from the actual drop shipper. Take their slice of the profit and have the real drop shipper send the products to your customers. They can also steal your customers as they are getting all of the shipping and contact information from you. At that juncture, they can send whatever they want to your customers such as advertising with lower prices. These folks should be avoided whenever possible. They are taking your additional profits by giving you pricing often close to retail. In some situations, they can also lengthen the delivery time to your customers. Again, you do not want this to happen. You need to ask the correct questions in order to avoid these folks. Questions such as, ‘Are you the manufacturer of the product?” Or, ‘Do you stock inventory of the products you sell?” are good questions to ask. We even ask folks to arrange a time for us to come visit their warehouse.



Membership Fees. An authentic single item drop shipper will not require you to pay membership or processing fees. Should you be paying someone to sell their products? No! Beware, they could be a middleman. Avoid any membership fees or dues. An authentic drop shipper does not require membership fees to sell their merchandise. In some cases, we have found that these so-called drop shippers charge membership fees for products that might not be doing well in the market place. The supplier wants to make sure they make money by charging ‘monthly fees” as they know you will probably be struggling to make money selling their products.



How you spot an authentic drop shipper.

Now that we have an awareness of the three M’s to avoid, we can summarize some of the rules and validations for our drop shipper search. Our checklist of rules can begin to look something like the following:

They will drop ship single item orders without minimum requirements. They will not require you to pay any member fees or monthly fees. They will offer you true wholesale pricing so you can make a profit. They will not put any of their own promotional materials in with your customer’s order. Once a drop shipper can meet the above criteria there are other logistical items to consider such as the following:

They will put your company name on the shipping label. They will ship in a plain box without any of their company logos or information on the box. They will include a plain invoice in with your order without any pricing. There are other items to consider for an authentic drop shipper validation, but the above lists can get you going in the right direction. Remembering to avoid the three M’s can prevent those costly mistakes in your online retail business.



Thanks to Brad Beiermann for contributing this article to our Wholesale blog:

Dropship Home Based Businesses