| Picture this. You sell a product that you don't ever | | | | The hard way is, do your own research. Attend trade |
| have to store. You set your retail price and every time | | | | exhibitions and/or call or write manufacturers and |
| you sell, your wholesaler ships the product for you to | | | | distributors, and negotiate drop shipping terms. Used to |
| your customer's door in your name and you keep the | | | | large-scale buyers, most will just not be interested. |
| profit. How is that possible? | | | | You could also use search engines and/or trade |
| It's called drop shipping. Simply put, a drop shipper is a | | | | publications. In both cases you may have to weed |
| distributor that will ship products in single units directly to | | | | through the dozens or hundreds of companies one at |
| your customer in your name. The purpose of this | | | | a time. Fine, if you have the time (and patience). |
| article is not to convince you to start a drop shipping | | | | The easy (and quicker way) has two options. First |
| business but to give you pointers on how to start right | | | | option: talk to a friend who does it and who is willing to |
| and avoid common pitfalls. | | | | tell you his/her secrets and possibly become a |
| The Beauty of Drop Shipping | | | | competitor. |
| One of the greatest challenges for people interested in | | | | The second option and one most favored is to find the |
| starting a home business is where to find products to | | | | research done and ready for you to use, for a nominal |
| sell. If you don't have thousands of dollars to invest in | | | | fee. Where to find this? |
| products and storage and want to avoid the | | | | The answer is, a reputable drop shipper's directory. |
| hyper-competitive business of information products, or | | | | Why? |
| the dreaded multi-level business, drop shipping might be | | | | Because, with a reputable drop shipper's directory, you |
| the answer. | | | | get a large database of verified, updated and tested |
| The most obvious advantages of drop shipping include: | | | | drop shippers, all ready for you to use. Also, you get a |
| you never have to deal with the headaches of | | | | wide selection of products to choose from, so you can |
| warehousing, packaging and shipping, and you don't tie | | | | pick a line of products to specialize in and avoid |
| down your limited financial resources in inventory. | | | | hyper-competitive ones. |
| Other advantages are: no leftovers, you can change | | | | What to Look For in a Drop Shipper |
| or add products easily and instantly, and no limitations | | | | When shopping for a drop shipper, look for one who |
| as to what you can sell. Plus, you get to use your | | | | will ship small orders, especially if you're just starting out |
| customers' money to run your business and "carry" | | | | as you will likely not have many orders. |
| brand-name products and look big. Is this cool or what? | | | | Also important is the experience of the drop shipping |
| The Dark Side of Drop Shipping | | | | company. One more reason for going with a reputable |
| Beware. While drop shipping business may be simple, | | | | drop ship directory as they likely will have some history |
| finding a true, reliable drop shipper is not. Scam | | | | and user feedback about their listings. |
| companies lurk, ready to relieve you of your | | | | Of course, you don't want customers to know that |
| hard-earned money, or profit from your hard work. | | | | you use drop shippers, or find out your source. |
| For starters, some "drop shippers" are just middle-men | | | | Therefore the drop shipper must use your name and |
| who contact the real drop shipper when you place an | | | | address on package labels as well as invoices. |
| order. They use you as their salesperson, so you use | | | | Instant updates on inventory would be additional |
| your money and time to find customers, and cut into | | | | advantage as this helps avoid or lessen problems of |
| your profit. | | | | back-ordering. Top-rated drop shippers will almost |
| Others are fly-by-night operations. They will take your | | | | certainly have this benefit. |
| money and disappear. In short, scam. | | | | What to Avoid |
| Once I responded to an impressive full-page ad in a | | | | Avoid drop shippers that require you to pay a monthly |
| business magazine. The advertiser claimed to be drop | | | | fee, unless they are a known franchise. Why should |
| shippers, and even promising help through support and | | | | you pay a monthly fee to help sell their products unless |
| business advice. To cut a long story short, the "drop | | | | they know that you're unlikely to make sales? |
| shipper" rarely delivered my orders as promised and in | | | | Also, don't accept offers for free websites or "turnkey |
| many instances I had to re-order elsewhere and | | | | business". There are exceptions, but most free |
| absorb the losses to avoid disappointing my | | | | websites are nothing but electronic catalogues. Your |
| customers. | | | | website will look exactly like hundreds of others, and |
| Later I found out that the company was not the real | | | | you can only sell products from that company. |
| drop shipper, when I discovered their source. | | | | And oh, steer clear of those cheap drop ship |
| A few years ago, an eBay(TM) Powerseller | | | | directories you'll find all over the internet, in business |
| (someone who sells a lot on eBay(TM)) was in the | | | | opportunities magazines and online auctions. You will |
| news. Having sold a number of high-ticket items at an | | | | simply get a bunch of non-working phone numbers, |
| online auction, he then paid a drop shipper to deliver | | | | broken or dead internet links and scam companies. |
| them. Imagine his agony when the company suddenly | | | | The company's physical address should be clearly |
| closed down without delivering his orders, or refunding | | | | displayed (check the "contact us" or similar page) on |
| his money! | | | | their website. If it's a PO Box, tread carefully. If no |
| I once paid a $100 "dealer fee" to another "drop | | | | address, run! |
| shipper". I received a pretty catalogue, but which | | | | Look for a working phone number. If they are as big |
| probably cost pennies a copy to mass-print. When I | | | | as they claim to be they should be able to afford a |
| went back to order, the website had disappeared | | | | business phone and someone to answer it. Call and |
| without trace. At least all I lost was the dealer fee. | | | | insist on talking to a real person. Ask questions: they |
| Others might not have been as "lucky". | | | | should be happy to answer questions from a prospect |
| Back-ordering is another big concern in this type of | | | | and if not, be very suspicious. |
| business, especially with hot items. If you are selling a | | | | Avoid companies with an exclusivity clause in their |
| product quickly and easily chances are, someone also | | | | terms as you can only sell that company's products |
| else is. Since it's a hot item, you and others are | | | | unless, of course, the company is a known franchise. |
| ordering several at the same time. Soon the product | | | | All costs must be disclosed before you commit. Watch |
| runs out of stock and you have to wait for the next | | | | out for companies that appear to have very low |
| shipment. Meanwhile your customers are screaming | | | | prices but sneak in exorbitant shipping and handling |
| for their orders. | | | | costs or "drop shipping charges". |
| Okay, But Can You Make Money with Drop Shipping? | | | | Setting Up Drop Shipping Accounts |
| Can you make money with drop shipping? Yes and no. | | | | Some distributors will require that you have a tax ID |
| What do I mean? Well, as with any business, drop | | | | number in order to set up an account. Others (not all) |
| shipping will only work if you work and apply age-old | | | | may require that you pay a dealer fee or place cash |
| principles of service, common sense, knowledge and a | | | | deposit. These, mainly, are measures to ensure that |
| dose of wisdom. It is not a magic pill to make your | | | | you're serious and not just another curiosity seeker or |
| money problems disappear. Sorry if I just busted your | | | | bargain hunter. |
| bubble. | | | | With stiffer competition, rules for setting up accounts |
| Some eBay(TM) Powersellers, Internet marketers, and | | | | are getting more relaxed. |
| top mail order companies operate on drop shipping and | | | | Some distributors will mail you a wholesale catalogue |
| are selling like crazy and making six-figure incomes, | | | | and price a list. One company sends three price lists: |
| even multi-millions. Drop shipping works, big-time. | | | | one with lower than wholesale prices, so you can sell |
| It is simple (and I don't mean easy). Find the right drop | | | | in wholesale, another with wholesale prices and a third |
| shipper(s). Decide what products to sell, find a way to | | | | with suggested retail prices. Others will send you a CD |
| let people know what you have to offer (examples; | | | | or let you access pictures and prices through their |
| through eBay(TM), running ads, building a website etc.) | | | | website once you sign up. |
| and you could be on your way to an enviable lifestyle. | | | | Conclusion: Drop shipping is a high-profit, low-cost |
| It does take some homework, and that word that | | | | business with unlimited potential, that can be run |
| gives most people the creeps: testing. But you must | | | | successfully from home. Drop shipping is one of |
| have right product supplier(s) to start with. | | | | greatest business innovations ever. With reliable drop |
| Finding a Good Drop Shipper | | | | shippers, your little home business is ready to sell |
| There's a hard way and an easy way to find a good, | | | | brand-name products worldwide just like the big guys. |
| reliable drop shipper. | | | | |