Dropship Articles, Dropshipping articles, Dropship resources
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Drop shipping is a product delivery method in which the seller (retailer) accepts payment for an order, but the customer receives the product(s) directly from the manufacturer. In a drop shipping arrangement, the retailer acts as a middleman between the manufacturer and the customer. His profit in the transaction is the difference between the wholesale and retail price of the items sold.
A drop shipper, which is usually a wholesale supplier but can be a separate business, is an important tool for many small businesses across America. These suppliers and drop shippers stock product in the inventory in warehouses across the country. Their on-site inventory is used by countless small businesses across the map.
One of the best things about a drop shipping business is the convenience that they offer to the small business owner, the manufacturer and customer. For the small business a drop shipper is an ideal organization to work with for easy product delivery for any type of retail business from large items like furniture to smaller items; such as, jewelry.
Dropshipping offers a the little guy the opportunity to get ahead on the internet by offering top products, even name brand products without having to invest thousands of dollars of inventory, shipping products, or manufacturing.
Dropshipping is the opportunity for a home based business, using the internet and even ebaY, this article will give you 7 basic steps to finding dropship and wholesale sources and starting your own home dropship business from the internet.
Drop shipping, for those who are unfamiliar with it, is a system whereby you promote the products of a particular manufacturer, take orders directly, and the manufacturer/source handles all the inventory and fulfillment functions for you.
In a nutshell, here is the drop-ship system:
- You generate and accept the order.
- You take your profits out of the sale price.
- You forward the order and the wholesale cost to the drop shipper.
- The source factory ships directly to your customer.
Drop shipping is the shipping of merchandise from a supplier directly to a retailer's customer. Meaning, you-the retailer-can ship to your customers directly from the suppliers' warehouses. This process minimizes the risk to you because you do not need to buy the product until it has sold. Suppliers take care of the warehousing, packaging, and shipping of products, saving you a great deal of money.
When Judy and Ronald Smelser of Arvada, Colo., started selling items on eBay two years ago, their business was a far cry from the well-trafficked "Power Seller" eBay store that it is today.
At first, selling stuff online was simply a novelty, says Judy. "We sold things we'd find at garage sales" or even around the house, she says.
But after a year, and once Judy discovered that she would soon lose her offline job, she began to focus her attention online. Without knowing who to buy from, or even what to sell, she says, sales stalled. After some initial research, which included Internet searches, contacting wholesalers and paying attention to late-night infomercials, Judy learned of an increasingly popular technique known as drop shipping.
Looking to sell on eBay without going online yourself? Consider using a drop shipper.
Imagine selling on eBay without the headaches of storing all that inventory, standing in line at the post office five times a week or calculating shipping costs to Guam. The answer could be as simple as two words: drop shipping.
By Mikal E. Belicove, Director - Community & Education, Doba
Almost every new online retail merchant makes the same mistake. They figure they can earn a lot of money simply by selling merchandise for a little less than the competition. They soon discover, however, that competing on price alone does not work. Every retail expert on the planet is well aware of the fact, but everyone seems to need to learn this painful lesson on their own.
If you made the mistake of trying to compete on price and price alone, don't feel bad. You're not the first, and you certainly won't be the last. Just stop doing it. If you need some convincing, that's what the first part of this article is all about. Here, you find seven good reasons not to compete on price alone.
1. The "Big Boys" will pummel you
The Wal-Marts of the world have a distinct advantage when it comes to pricing products to sell. Here's why...
Dropshipping can add to the bottom line of any business large or small. Many businesses thrive off of dropshipping because it cuts down on their overhead. Services can be cut out and staff also when a business is dropshipping.
For that reason, businesses find it economical to dropship to most of their customers. Dropshipping gives businesses flexibility in their day to day operations. A limited number of staff members can be used to get a large volume of work done. This adds to the bottom line at the end of a year.
One of the most reliable sources that you can use is eBay to become a seller. The process to become a seller on eBay is very simple and there is no need to worry about the company or driving trade your way. The requirements to become a seller are provide a valid credit/debit card and bank account information.
If you do not want to provide this information, you can become ID Verified. It is highly recommended that you sign up to be a part of Pay Pal. Pay Pal is a valuable program that permits you to accept buyer credit cards and electronic check payments online.
The understanding of what it is to be a wholesale distributor will help you to a better understanding of drop shipping. The sale of goods in quantity is usually for resale by a distributor to a retail merchant. A wholesale made by the manufacturer in a large scale without discrimination requires a distributor to make sales to the retailer in smaller quantities.
The idea of wholesale distributors has been a marketing tool for a very long time. Earlier companies like the Fuller Brush Company, Sears, Montgomery Wards and J.C. Penny's started the basis of wholesale distributors and especially the idea of drop shipping.
The small business has a problem when they first start their business with finding a reasonable priced storage place. It is necessary to have a place to keep product stored until ready to put them in your retail outlet. This is expensive and a waste of space.
That is why the sudden boom in having an online store. A small businessperson can set up their store from home and monitor it from home. The profit margin can be very high depending on the amount of time you spend searching for the right product and the right drop shipper. The right drop shipper is everything in the virtual online store.
Starting a drop shipping business from home is an excellent way of earning without investing a large sum of money. There is also no stock or dispatch to be handled by you. Here are some helpful tips to get your business started.
Once you have decided to go for it, then you will need a computer with a broadband connection and a telephone. You should place this computer in a separate room in your house, if possible, so that you are not disturbed when working or talking over the phone.
Drop shipping is a great way to do business. This ultra-convenient system allows you to sell online without the hassle of making, storing or shipping any products. How good is that?
But to benefit fully you must get a few things right. For starters, you must pick products that will sell or you will be disappointed. It sounds so obvious doesn't it? But you may be surprised how many people launch businesses on the back of what they think will sell and not what customers are asking for. And you do not want too much competition. You need a product that people are searching for but not one where you are competing with too many merchants.
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.
The business of wholesale has been around for ages. In the past you could simply shake a persons hand and solidify a deal, and that deal was set in stone. With the incredible growth of online business you no longer have live near a wholesale supplier - you can literally find someone to supply wholesale products for you anywhere in the world without much effort. However, with the explosive growth of companies that supply products at wholesale to retailers and etailers, it has opened the door for deceitful and poorly organized wholesale suppliers to abound. Unfortunately the days of taking a person at their word in regards to the wholesale business is over.
People have been distributing products since before the first mastodon skinner traded a fur coat for a flint axe. Here's how it works.
Let's say ABC Manufacturers makes a product called Mom's Ankle Wax. We'll say that Mom's Ankle Wax has been around for years. It's a very well known brand name product. It will without a doubt give you the shiniest ankles on your block, and everybody wants some.
Ever heard the phrase, "Christmas in July?" It's no joke!
Imagine this with me for a moment: it's Summer, or early to mid-Fall. In the northern part of the US, the weather is still nice and warm. In the south, it's hot. All over the US, swimming, boating, jet-skis and motorcycles are the rule. Backyard barbecues, and long lazy nights under the stars. The last thing on anybody's mind right now is Christmas.
Or is it? Believe it or not, there are people who are thinking of nothing but Christmas right now. Who are they? Product Manufacturers, Wholesale Suppliers, and Retailers.
Ho, ho, ho, everybody! Merry Christmas! Happy Hanukkah!
Yes, it's here again. The much anticipated, and equally dreaded, Retail Holiday Season.
While their children's' eyes sparkle with glee at the prospect of Toys, Trees, Candles and Parties, parents and all the other adults who own Internet Ecommerce Stores eyes' glint with a nervous twitch at the approach of the busiest retail season of the year.
'Will my suppliers be able to handle the load?' they wonder and worry. 'Will I be stuck with orders I can't fill, and customers unhappy about backorders this Holiday?'
One thing that's constantly misunderstood by people trying to run a home business on the Internet is the word "Wholesale".
Some people think that working with a real Wholesale Supplier means that they will magically be able to sell products for less than anybody else on the planet, for ever and ever. They'll be the only one who ever gets such good prices, and they'll earn millions because no competition can touch them. They're retire happily in a couple of months, and buy a big house in Beverly Hills, complete with a butler, a private chef, and a little satin doggie bed in every room for the casual use of the family Basset Hound, Duke.
The Internet is loaded with fake "Wholesale Suppliers". Everyone who has a couple of wooden birdhouses or glass figurines to sell wants you to think they are a real, live Wholesale Supplier.
And, every Scam Artist who feels like making a quick buck is selling lists of these fakes.
Don't throw your money away on cheap lists and sites full of middlemen, resellers and closeout liquidators that charge you overblown prices, membership fees and minimums. The creators of those lists and sites are irresponsible people who couldn't care less what happens to you. They pad their lists with the names of hundreds, or even thousands of companies that are USELESS to you, and they KNOW IT! You'll waste valuable time and money finding out that the information you bought is virtually worthless.
Those of us who own Home-based Internet Businesses are always looking for wholesale pricing from the suppliers of the products we want to sell.
Unfortunately, many people don't know what a wholesale price IS, or even what to DO with it when they find one.
By definition (Merriam-Webster's Dictionary), the word "Wholesale" means "the sale of commodities in quantity, usually for resale (as by a retail merchant)". That definition has been around since the 15th century.
It does NOT mean "the absolute rock-bottom most dirt cheap price ever so that you can beat everyone else's prices no matter what".
Currently, in our wholesaler database OneSource, we list thousands of genuine, verified Wholesale Suppliers. We're very proud of that; it took a long time and a great deal of difficult research to get there. That's more genuine Wholesale Suppliers, by far, than are listed in all the other lists and "directories" out there combined. Sure, others claim to list thousands, but those thousands are almost all fakes and middlemen. We continue to add new genuine Wholesale Suppliers all the time.
However, once in a while we lose a Wholesale Supplier or two as well.
Why? Do they decide they no longer want to drop ship? Do they go out of business? No. They decide that they don't want to deal with the number of people we send them who do not follow their instructions when setting up a new account! This can be a bad thing for both of us.
Our company publishes the Internet's leading Database of genuine wholesale suppliers. We list thousands of "Drop Shippers" (wholesalers who ship products, one at a time, directly to your customers; eliminating the need to stock inventory), and thousands of Light Bulk Wholesalers - Wholesale Suppliers who will sell to you in small Bulk Quantities, while still giving you larger Bulk Quantity prices. As a result of the information we research and publish, we get questions all the time about what products Home-based Internet Business owners should try to sell online.
I've been at this for years, and have become very successful in my Internet business. But let's face it, folks. If I knew what was going to sell well on the Internet tomorrow, next week, or next month, I wouldn't be writing this article. I would have retired and purchased a small private island by now. In the retail business, whether you are online, in a physical store in the local mall, or at a roadside stand, it makes no difference; choosing the products you are going to sell is always the hardest part of getting started.
I can't whip out a crystal ball and tell you what to sell. However, I can tell you about the biggest mistakes that I see new Home-based Internet businesspersons making, all the time.
Are you an Ecommerce business owner, or do you just seem to be one? There is a difference, and that difference will hurt your business.
When you sell products on the Internet, just like anyplace else, you need to be buying those products from a direct Wholesale Supplier. Either the factory itself, or a factory authorized distributor. If you're not, you're paying middleman markups that chip away at your profits until you're barely making enough to pay your hosting fees. Sometimes I think that there are more middlemen on the Internet than there are ECommerce sites, and they're all targeting YOU!
If you want to start your Home-based Internet Business for very little money, you need Wholesale Suppliers who Drop Ship.
Why? Because working with drop shippers eliminates the need for you to carry expensive inventories. You don't have to rent a warehouse, hire employees, establish accounts with UPS and FedEx, etc. You can sell the best brand names on earth from your home computer, and make good money at it.
Wholesale Suppliers who drop ship send the products you sell directly from their warehouse to your customer, with your business name on it. All you do it take the order from your customer and pass it to the distributor. You keep the difference between the wholesale price the distributor charges you, and the retail price you sell to your customer for.
Using a Drop Shipper is a great way to sell products on the Internet. A legitimate Drop Shipper is a manufacturer or a wholesale distributor who will send products one at a time directly to your customers for you, from the warehouse. You never have to buy inventory up front, and you never have to pack and ship products yourself.
All you do is place images of those products on your Auctions or Web Site, and you collect on every sale without ever touching the product.
We've just finished several months of development on a new software product here at Worldwide Brands, Inc., and you can preview it for FREE. I'm very anxious to tell you about it; I'm sure you'll be as excited about it as we are. :o)
First, though, I'd like to tell you why we spent all that time and energy, working with many very successful ECommerce experts, to develop this new software.
For years now, through all the time I've been working in and writing about ECommerce, I've always come across one single question far more often than any other. It's a question everybody has, and nobody seems to be able to answer easily. What's the question?
"What should I sell on the Internet?"
We get email here all the time asking us why Internet Retailers shouldn't just buy the products they sell, directly from the Factory at wholesale.
People write and say, "I'd rather go right to the Manufacturer and buy from them. Why should I go through a Wholesale Supplier?
One gentleman wrote to us yesterday and said, "I buy things online (as a consumer) directly from Sony all the time. Why shouldn't I be able to buy directly from Sony at wholesale (as a Retailer)?"
Earlier today, I was talking with one of the thousands of Wholesale Suppliers we list in our Product Sourcing Directories.
Our Wholesaler database, OneSource, provides Internet Retailers like yourself with personally verified, legitimate Drop Ship Wholesale Suppliers who will send single products directly to your customers, from their warehouses, for you. This eliminates the need for you to buy Wholesale products up front, and stock and ship them yourself. It also gives you access to verified, legitimate Wholesale Suppliers who will sell to you in BULK quantities, at very low minimums. This allows you to get into the Bulk Buying market for very little money.
Every product has a natural life cycle and a season where it sells best: some early buyers come at the beginning, and then the mass of buyers come. Prices peak and retailers begin running out of stock. Sales slow, and trickle down to a few last-minute shoppers.
As an online seller, it's critical you prepare for the natural retail cycles throughout the year. With some simple strategies, you can make the most of the opportunities presented by the changing seasons:
Make Fact-Based Decisions
Choosing what products you'll sell is one of the most important decisions you'll make regarding your eBiz. If you choose your product line based on personal preferences or hot-item lists, you're gambling with your business. There may not be a market for your particular tastes or the market may be saturated. And by the time an item reaches a hot-list, the supply has met or exceeded the demand.
That's why you need to base all your decisions on your market research. Gather information about specific products, not just overall market data. You want to know exactly what the demand and competition is for your particular item. You're looking for products with steady demand, but without a huge amount of competition - niche markets. Research can reveal a lot about what you should sell and how you should sell it.
You may have already discovered that selling on eBay can be fun and profitable. But after you've cleared out your garage and attic, and auctioned off everything your husband owns, where can you go to get new product ideas?
Tapping into EBay's Resources
Most people don't realize that eBay itself is actually a terrific place to find product sourcing ideas. Besides being an easy selling venue with built-in traffic, it also contains a goldmine of useful data about what that traffic wants to buy. One of eBay's best-kept secrets is their Seller Central page (www.EBay.com/SellerCentral). Very few people, even PowerSellers, are aware of this valuable resource. Consequently, very few people are taking advantage of the tools available there:
For online retailers, trade shows are an incredible opportunity to source goods, connect with wholesalers and manufacturers, and expand their product lines. There is a right way and a wrong way to attend tradeshows. To get the most out of your experience, you need to prepare.
Your first step is to find the tradeshow that's right for you-there's a tradeshow for nearly every industry imaginable. One good source for locating tradeshows is www.TradeShowWeek.com-you can search for shows alphabetically, by city and state, by industry, or by month. You can also try Googling the phrase "trade show" and your industry name. Tradeshows also advertise in the magazines and publications that cater to their market, and they'll give you plenty of advance notice so you can plan ahead.
For the online retailer, tradeshows are a fantastic way to locate product sources. You can easily fill up a suitcase with the materials you collect from different wholesalers at a show. But having supplier information is only a start-your next step is determining which suppliers you want to use and then beginning to develop relationships with them.
Ask the Right Questions
When you talk to a supplier, you should already be familiar with their product. Before you even start contacting the suppliers you met, do your market research and determine which products you really want to pursue. There are really only two types of information you should be looking for when you call a supplier:
Christmas comes a little early every year for the online retailer - June or July to be exact. If you're just starting to prepare now for this year's holiday selling season, you're none too early. Most people think the holiday buying craze starts the day after Thanksgiving, but the truth is it starts in September and tops out in November. So now is the time to get ready for the busiest selling season of the year.
Enhancing Your Product Line Start thinking about your product sourcing. Your wholesalers should be sending you product sheets and catalog inserts with new products and prices. Because they make their money anticipating trends, they're a good place to see what's new in your market and find complementary products to accentuate your existing line.
EBay has moved offline. Several companies, like Snappy Auctions and I Sold It On EBay, offer sellers franchises for brick-and-mortar eBay stores. These drop-off spots take customer items, evaluate, photograph, and list them online, collect the payments, and ship the items to their buyers. In other words, they do all the work - for a percentage of the selling price, of course.
Beginner Strategies
If you've contemplated jumping on the bandwagon and opening a physical drop-off location, fellow store-owner and eBay University instructor, Christopher Spencer has some advice for you:
If you're an online retailer, or any type of retailer, there's probably no better reading material for you than industry publications. What other reading will help you source and market products and build your product lines around your customers' needs?
What's a Trade Publication?
According to Lisa Suttora, of WhatDoISell.com, "A trade publication is a magazine, newspaper, or even email newsletter that is written specifically for industry insiders." You can find an extremely broad range of information in a trade magazine:
When eBay first started, garage sales were most sellers' main source for finding products. And though product sourcing has come a long way, garage sales still provide a wide range of quality goods at rock bottom prices.
Rules of the Game
According to Terry Gibbs, founder of IWantCollectibles.com, "Garage sales are a numbers game. You always have to be looking." The trick to successful garage sale hunting is persistence. You've just got to keep getting out, going back and being constantly on the look-out for new products to sell.
Storage unit companies regularly seize abandoned goods and auction them off in an effort to reclaim some of their lost profits. Many online retailers are cashing in, using these auctions as a product source for their e-businesses. According to enthusiast Blaine Herbst, founder of StorageAuctionSecrets.com, "You can pick up an entire storage unit filled with things for a couple hundred bucks." Finding these auctions can be as easy as looking in the yellow pages under "storage units" and calling to see when they conduct their sales. Or check out AuctionZip.com or StorageAuctions.org for information on local auction times.
Antiques and collectibles are big business - on eBay, the collectibles category alone had a gross merchandise value of over $2 billion dollars last year just in the second quarter. The ecommerce boom has only fueled the industry - sellers are no longer limited to local audiences, and buyers are no longer limited to local dealers. You can find things that you'd never run across in your lifetime, from people all over the world. Buying or selling online isn't really that different from buying or selling in a brick-and-mortar store - people want the same type of information and need to ask the same questions.
Pam Wiggins of ChicAntiques.com suggests numerous learning resources for someone who wants to get into the antiques business, but knows nothing about it:
What NOT to Sell
Everyone who starts an eBiz faces the question: What do I sell? And most everyone seems to make two classic mistakes in the beginning:
1. They try to sell what everyone else is selling - DVDs, electronics, designer clothing. The problem they encounter is that the market is already saturated with these products and real, genuine wholesale suppliers typically do not work in small quantity. To make any profit at all, they'd have to buy huge quantities.
2. They try to sell what they know and love. Unfortunately, unless there is a significant demand for what they know and love, they are going to be stuck with a lot of product they can appreciate, but can't move.
What NOT to Sell
If you want to know how to succeed at something, it's a good idea to talk to someone who already has. One of the most common questions new - and experienced - online sellers ask is, Once I've determined what I'm selling - where do I go to get the goods? Successful eBay PowerSeller Skip McGrath offers some helpful insights on how you can find product sources for your Internet business.
Sourcing with a Pro
According to McGrath, one of the best sources for products is local distributors because they're easy to find. Go to smartpages.com and you can search by type. Just enter the word "wholesale" and your zip code and you'll get a list of manufacturers and wholesalers within 100 miles of that zip code. And under the company name, you'll see the kind of products they carry.
For non-traditional wholesale suppliers, like return, liquidation, and overstock distributors, McGrath recommends several online sources:
Get the Word Out! Consignment is a simple concept - taking other people's products and selling them for a percentage of the sale. According to renowned eBay PowerSeller Skip McGrath, of SkipMcGrath.com, "Consignment selling is the fastest growing phenomenon on eBay." The key to successful online consignment is marketing your services. You have to aggressively promote your business, and McGrath shares some techniques for doing just that. There are four areas you'll use: advertising, public relations, networking, and your own web site.
3 Classic E-tailer Mistakes
Since the birth of eCommerce, certain faulty thought patterns have plagued online retailers. Says Lisa Suttora, founder of WhatDoISell.com, "There are things I see new sellers do that are very, very common; and these things can really hinder their ability to grow their business and make the profit they want." Having the right mindset when sourcing and selling your products is critical in avoiding those regrettably typical seller mistakes.
Mistake 1: I'm Only Going to Sell Product X - That's All I Need. There are two main problems with focusing on a single product:
Retail overstocks and customer returns can be an excellent product source for your Internet store or eBay business - as long as you understand what to expect when purchasing this kind of merchandise.
A Mixed Bag of Goods Often, returns are sold as pallets of assorted, dissimilar items - you'll find everything from snow boots to toy cars to staplers. Most likely, you'll also find some damaged goods among a pallet's wares. A portion of these items were returned because the customer damaged them, or they didn't work in the first place. In spite of the damages, many sellers feel they can make a profit. According to Jacques Stambouli of ViaTrading.com, a retail-return wholesaler, "The rationale is that, even with disposing of a high percentage of them, you're buying them cheaply enough that you can make a lot of money."
Changing with the Times In recent years, online shoppers have gotten more computer-savvy and more comfortable making purchases over the Internet, and their expectations have grown. They know what they're looking for and they have more choices, so they're more discriminating about where they'll shop. That's why it's important for online sellers to adapt the way they source products and give their customers what they want. Fortunately, some new trends have emerged in product sourcing that are particularly ideal for the home-based retailer:
