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Drop Ship Your Way to Wealth

by J. Stephen Pope

Your customer sees a marvelous array of products on your website. After thoughtful consideration, she purchases the product she wants. Amazingly, you have never actually seen the product. That is because your supplier shipped the order directly to her.

1. Problems With Stocking Inventory

After deciding what products you will sell, you are immediately faced with many challenges.

First: “To stock my products, will I need to rent store or warehouse space? I was hoping to sell by Internet, mail order, or export, but I don’t have much storage space for inventory at home.”

Second: “Will the supplier even deal with me if I don’t have a retail location? I was counting on keeping my overhead down by operating from home.”

Third: “I know that many manufacturers and distributors have a minimum order, sometimes in the thousands of dollars. I don’t have that kind of money!”

Fourth: “Even if I did have the money, why should I tie it up in inventory? How do I know if the product will even sell?”

Fifth: “I guess I will have to add extra insurance coverage for my inventory. Maybe I better upgrade my security system while I’m at it.”

Sixth: “The shipping charges are going to kill me. First, I have to pay to get the goods here (freight-in). Then, I have to pay to ship the goods out to my customers (freight-out).”

Seventh: “If I expand and hire employees, how will I control the inventory? How will I know if my employees are stealing from me?”

Eighth: “How much time and money am I going to spend packaging and fulfilling orders?”
These problems can be reduced or eliminated by drop shipping.

2. Drop Shipping to the Rescue

Drop shipping is a method of selling products without stocking inventory yourself. You don’t need to stock inventory, because you only order an item when a customer requests it.

With drop shipping, when you make a sale you contact the manufacturer or authorized distributor and make arrangements to pay for the order at your wholesale cost. Your distributor then ships the product to the customer with your invoice and shipping label.

For example, let’s assume that you have just sold a product to a customer for $100.00 plus shipping charges of $15.00. Having received the customer’s payment, you now need to fax or otherwise send your order to your drop ship supplier. You will need to pay your supplier, by credit card or other means, your cost of $50.00 plus $15.00 shipping. This leaves you a $50.00 gross profit. Your supplier will now ship the product to your customer.

With this arrangement of not having to stock inventory yourself, there are many advantages.

You eliminate the high costs of holding inventory. There is no need for you to rent expensive storage space, finance high minimum orders, get stuck with goods that don’t sell, or pay other expenses associated with maintaining inventory.

Indirectly, you do pay inventory costs. Your drop ship supplier must maintain his inventory and pay all associated costs, including freight-in, storage space, insurance, accounting, shrinkage, and so on. To make a profit, he must pass these costs on to you.

The real advantage to this drop shipping arrangement lies in keeping your costs variable. Instead of being stuck with these expenses up front, whether you sell or not, you pay only when you make a sale.

3. Profit From Drop Shipping

Many legitimate drop ship suppliers may not require you to have a retail location, but they will want to see evidence that you are in business. They may require you to produce a resale license or retail sales tax permit.

To be sure, there are pitfalls to watch out for in drop shipping. For example, some suppliers claim to sell at wholesale prices but are actually selling closer to retail. Also, margins are very slim in some competitive areas, such as electronics. However, with proper research and information, you should be able to avoid these problems.

Whether from your home, retail store, directly from your website or through an online auction, you can arrange to sell an item before you purchase it. That way you have nothing invested in inventory and won’t get stuck with stock that won’t sell.

Rather than financing and stocking inventory yourself, consider drop shipping your way to wealth.

Discover the Hidden Secrets Behind Dropshipping Profits at your affiliate link .


You Can Make Money As A Dropshipper

The distribution of products has been around for a very long time. When a product is created it needs a distributor to get it to the stores that will sell it. A manufacturing company creates a new product, sells it to wholesale distributors, and the distributors then sell the product to the retail stores that will sell it. Each company makes a profit of their own. Otherwise, none would be in business.

However, what if we were to take out the distributor and the stores? You would then essentially become the dropshipper, selling products to the public via the Internet straight from the manufacturer.

Why Become a Dropshipper?

There are so many benefits to becoming a dropshipper. Here are a few of the benefits you will have as a dropshipper:

  1. You will have no inventory to store.
  2. You do not have to ship the products sold.
  3. You create the markup, which determines the profits you will receive.

The only things you need to become a successful dropshipper are an entrepreneurial spirit, a good business sense, ability to research a good dropship supplier, set up Internet stores, and market your products as well as you can.

Dropshipper Hazards

  1. Finding a bad dropship supplier. Research your dropship supplier before you decide to do business with them. Check them out as much as you can before you make your decision.
  2. Ask for tracking numbers when an item is shipped. If they can’t provide them, it might be better to choose another dropship supplier.
  3. Ask a potential dropship supplier how long their estimated delivery times are. Customers will want to know how long it will take for them to receive their order.
  4. You shouldn’t have to pay a fee to access a dropship supplier’s product line.

You can make a successful business out of dropshipping online. You can create more than one website, and work with more than one dropship supplier to optimize your results. There are probably more businesses and websites online that you have visited and didn’t even know that the owner was using a dropshipper.

You choose the products from the dropshipper’s product line that you want to sell, set up a website, market your products, and start selling. It can be that simple. The best places to start selling are Ebay and Yahoo Merchant Stores. However, you should also create your own websites that showcase your products and allow people to purchase them there as well. Ebay and Yahoo will help you a lot with marketing if you use their website stores to their greatest advantage. Utilize keyword-targeted articles for your websites so the right people can find you easily.

The best part about being a dropshipper is that you can sell products that you are passionate about, and make money! You will be more happy with your businesses if you are selling something that you truly care about, and that passion will show through to your customers.

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