What Is Drop Shipping? The Perfect Solution
by Palyn Peterson
Published on this site: April 25th, 2005 - See
more articles from this month...
Drop shipping one of the greatest business innovations since products.
Seriously, don't laugh! I'm not joking! With what other service
can you use another company's products, their warehouse, their shipping
department, and have them provide you with all the information you
need? Do you see what I mean now?
Every entrepreneur who is looking for the most efficient
way to sell products over the internet should be very enthusiastic
about drop shipping. It finally allows you to sell nearly
anything you want, be it computer equipment, toasters, billiard
tables, even planter pots, all without having any inventory.
And do you know what zero inventory means? It means less risk!
The only time you ever buy any products from the wholesaler
is when you have already sold it to a customer! And the best
thing is (or should I say, another best thing), the wholesaler
packages it up and ships it out to the customer for you, and
usually your business name is on the box! As far as the customer
knows, you have a warehouse full of products.
When you sign up with a wholesaler, they will most likely ask you
for your tax license number, or a faxed/emailed copy of it to prove
you are a legitimate business. If they don't ask you for this, they
are either a very small wholesale company with a specific niche
of products and just want to make the process easy for their clients,
or they are not a real wholesaler at all.
If you ever come across a "wholesale" company that carries
tons of items, ranging from Barbie's to hair dryers, and they say
that you don't need to have a tax license to deal with them, then
be very skeptical, because 99 to 1, they aren't a wholesale company
at all.
That sort of company will just take your order only to turn around
and order it from the real wholesale company at a much lower cost
than you paid for it (and they did have to get a tax license to
do this). It doesn't stop there either. Since you bought it at a
higher price, you will need to pass this on to your customers by
marking it up higher than you need to. And if you ever needed or
wanted to, you would have less margin when lowering your prices
to match or beat your competitors. And your competitors would probably
have a tax license, so they would be dealing with legitimate wholesalers.
Seriously, be very careful about this, there are many wolves in
sheep's clothing out there. So skip the middleman, get your tax
license, get legitimate and you will save yourself a lot of grief
and money.
Once you make an account with a wholesaler, some will mail
you a wholesale catalog and price list in the mail with a
CD full of product images to use on your website. The smaller
companies will just allow you to copy the pictures and descriptions
off their website. With this product information, you can
post the products to your online store and wait for orders.
It's as simple as that!
Then, when a customer places an order, you either call, email
or fax your contact at the wholesaler and give them the customers
name, address, and the items they want, including any other
miscellaneous information the wholesaler may want. The wholesaler
then charges you for the cost and shipping of the order at
wholesale price, then packages it up and sends it off to the
customer. All you have left to do is turn back around and
charge the customers credit card for the items with your profit
margin markup.
The reason this is growing in popularity amongst wholesalers is
because they get to have many other companies market and sell their
products, thus reaching more people and selling greater volumes.
The wholesale company is still able to sell their products for the
price they want, and you get to keep the profit margin as a reseller.
It's a win/win situation.
Drop shipping is enabling the average person to be able to run
a successful, full service online retail store from the comfort
of their home. Zero inventory, no shipping department, only buy
when you have already sold -- this is the perfect affiliate program.
Palyn Peterson publishes the acclaimed Advanced Internet
Marketing News. A professional newsletter with a refreshing perspective
and a strong focus on no-cost techniques. http://www.FutureInternetMarketing.com
FREE Tips, Tricks, Tools, Resources, eBooks, and More!
|