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What Is Drop Shipping?
The Perfect Solution
by Palyn Peterson
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.
Copyright ©
by Palyn Peterson
mailto:palyn@futureinternetmarketing.com
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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
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