What is Dropshipping? Finding Dropshippers, Its Advantages and Pitfalls!

by William King

Dropshipping is a type of retailing where the retailer does not keep goods in stock, but instead passes the customer’s order and shipment details to the wholesaler, who then dispatches the goods to the customer directly. The retailer makes their profit on the difference between the wholesale and retail price. Some retailers may still keep “show” items on display in stores, so that customers can inspect an item similar to those that they can purchase. Other retailers may only provide a catalogue or Internet presence.
Drop shipping can occur when a retailer receives a single large order for a product. Rather than route the shipment through the retail store, the retailer will arrange for the goods to be shipped directly to the purchaser.

Let us assume, you purchase an item from a dropshipping site for $20.00. You would sell that item for a price determined by you; let’s use $35.00 plus $4.50 shipping for an example. After you collect the total payment of $39.50 from the customer and their mailing address, you would forward the $20.00 plus $4.50 for shipping to the wholesaler, and keep the $15.00 as profit, never having to touch the product, as the wholesaler ships it out to the customer.

In short, dropshipping is simply selling products for wholesale companies, sending them the address of the person who bought from you, and they ship the product to them. This is an incredible opportunity, most times for the cost of a meal at a restaurant, to start a profitable eBay business.

Many sellers on eBay also drop ship. Naturally a seller will offer an item as new and ship the item directly from the wholesaler to the highest bidder. The seller profits from the difference between the winning bid and the wholesale price, minus any selling fees from eBay.

Finding Dropshippers

Startups and individuals new to the dropshipping world generally face severe difficulty in finding legitimate and authentic dropshipping companies. Several online directories have popped up in recent times on the net which help to make this task easy. Its best online example can be seen by working of the famous online dropshippers directory http://www.aidandtrade.com.

Whilst looking for dropshippers, there is a general misconception that dropshipping companies who charge an initial fee to sign-up and open accounts with them are not considered genuine. Although this might be true in some cases however the reason for charging this fee is that, these companies want to make sure that they are dealing with genuine traders and not individuals merely looking for quick bargains and one off items.

Advantages of Dropshipping

Working with dropship companies has numerous advantages for small companies and individuals looking to earn part time or even full time income. Following are some of its benefits.

- The dropshipper researches for products and provides their lists/catalogues of available items at trade prices - one can sell any of these items by any method they wish.
- The dropshipper acts on the order - Only when the item has been sold and the payment has been received, the dropshipper is asked to fulfil the order.
- The dropshipper packages the orders – No packaging costs are involved at the end of the seller.
- The dropshipper sends the orders out direct to the customer – No delivery costs and efforts are associated with the seller
- The dropshipper is transparent to the customer - As far as the customer is concerned their purchase has come directly from the seller.
- The dropshipper holds all the stock – No warehouse or storage issues at the end of the seller
- All the seller has to do is concentrate on sales and marketing and banking the profits!

Dropshipping Pitfalls

While it is true that the profits can be gigantic, the seller effectively has to rely on the goodwill and professionalism of the dropshipper/wholesaler. Eventually, one should always keep in mind that should the deal go raw (for instance, the dropshipper supplying a faulty product or a downright incorrect one), it will be the seller’s reputation that will take hit. The end buyer cares nothing for whether the seller used a dropshipper or not; all they truly care about is receiving the product that they paid for. For that reason, dealing with unconfirmed dropshippers can be risky.

Additionally, profit margins can be low when working with smaller dropshipping companies. Typically the biggest discounts from manufacturers go to larger volume resellers who further pass their discounts to sole traders and individuals. Using smaller dropshipping companies one might end up paying much more per unit of product than by contacting manufacturers direct. Most manufacturers refuse to deal with individuals, but many will offer low volume quantities at wholesale price. For a fast selling product it could be worthwhile buying small quantities directly from the manufacturers.

William King is the director of UK Wholesale Directory and Dropshipping Directory. He has 18 years of experience in the marketing and trading industries and has been helping retailers and startups with their product sourcing, promotion, marketing and supply chain requirements.

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Make Money On Ebay Without Spending

by Jason James

Did you know that you can earn a full time income selling on Ebay without making any initial investment at all? You don’t need to pay for your inventory and you don’t even need to pay ebay fees until the end of each billing period.

In fact, you can sell on ebay and avoid spending any money at all until you have already made profit from dozens of sales.

One method you can use to do this is dropshipping. Simply find a dropshipper online, such as http://www.megagoods.com/ and sign up for their dropshipping program.

Most dropshippers will allow you to join for free. Some will have better prices than others, so you should browse a number of sites before making your selection. Once you choose a dropshipper and create an account, look for items you could potentially sell on ebay.

After you have selected items from your dropshipper, match the dropshipper’s prices against the prevailing market prices on ebay.

For instance, let’s say you decide to sell 40GB ipods on ebay. You search ebay and find that the prevailing market price for a 40GB ipod is $329. Your dropshipper offers to sell you a 40GB ipod for $280.

If you calculate that you can sell at the prevailing market price and still earn a significant profit after fees, you should stick with that dropshipper. If not, you should select another item or another dropshipper that will give you a higher profit margin.

Credit is another easy–and more obvious–way to make money on ebay without spending. You can use a credit card or paypal buyer credit to purchase items at a discount from less-trafficked auction sites, such as bidz.com or bid4assets.com.

Simply purchase an item on credit, resell it on ebay, and then use the profits to purchase another item, which you will resell again, restarting the cycle. By the time your credit card statement arrives, you will have far surpassed your initial investment. Not only will you be able to pay off the debt, but you will have enough money to purchase more merchandise without using credit.

You can also purchase items wholesale in small batches online using this same method. If you go to http://www.wholesaledir.com/, you will find a number of wholesale dealers.

Purchase your first batch from an online wholesaler using credit. Break the batch down into smaller groups or into individual items; and resell them at a reasonable markup. By the end of your billing statement, you should have enough money to pay off your bills and purchase a new batch.

Jason James website ‘The Auction Resource Network’ reveals his inside secrets and sources that help him pocket over $10,000 a month on eBay. Claim your FREE ‘Top 10 eBay Selling Secrets’ eBook: www.auctionresourcenetwork.com

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Dropship Wholesale Distributors - What You Need to Know

by Davion Wong

Dropship wholesale distributors can be gems or gangrene to your online or eBay auction internet business. Good dropshipping wholesalers can grow your business quickly and make your business a success. However, finding a good and trust-worthy wholesale dropshipper can be difficult.

But there is a setback that can happen when you least expected it. You find a few suitable dropship wholesalers but your working relationship with them is short-lived when the dropship wholesale distributors or their direct suppliers decide to make policy changes in their dropshipping operations. Worst still, they may take seize the opportunity to increase pricing of their merchandise when they see your business growing and your dependence on them. Your orders with them would tell. eBay or auction resellers often have to face this situation and move on to find another good dropship wholesale distributor.

Fortunately, help is available for eBay resellers and internet marketers who make a living through online auctions. There are dozens of reliable and informative product sourcing directories or websites online. These companies basically do all the research on wholesale dropshippers and check them out through trade fairs, interviews and reviewing their track records, dropship policies and inventories. With the information they have, they categorize and collate them into useful directories and listings of quality dropship wholesale distributors that offers the best and cheapest deals globally.

If your search for reliable dropship whole distributors has been a frustrating and time-wasting experience, these directories would be gems to your business. However, not every directory is worth the salt and you really have to look around carefully. There are a few things to look out for when sourcing for a reputable, user-friendly and detailed directory of dropship wholesale distributors that you can rely on.

First thing is to see if the website or company is registered with Better Business Bureau (BBB). It is great if they are, but you are not done yet. Do a quick check on their credentials and find out specifically if there have been complaints lodged against these directory sellers.

Another check is more crucial for your online reselling business. Look through the directory and see if they list the dropship wholesale distributers that dropship internationally. This is important as you can reach a larger market. This can boost your online business beyond your current levels by a wide measure.

eBay power sellers are running thriving businesses all thanks to the liaison they have with excellent and dependable dropship wholesale distributors that play a fair game. If you want to succeed your business, long term and lasting relationship with your wholesale dropshippers is key. Of course, you can go the arduous and uncertain journey of searching one by one on your own, or you can take the shortcut by using a directory of dropship wholesale directories offered online. It is entirely your choice.

Look out for useful tips on the wholesale dropshipping business at my blog and get in touch with global dropship wholesale distributors. This article may be freely reprinted or distributed in its entirety in any ezine, newsletter, blog or website. The author’s name, bio and website links must remain intact and be included with every reproduction.

Davion is a successful webmaster, author and reseller. Discover how you can supercharge your profits and grab deep wholesale discounts from the best dropship wholesale distributors at his blog http://Drop-ship-Wholesale-Distributors.blogspot.com.

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How Do I Find a Good Wholesale Merchandise Drop Shipper? by William Doggett

People wanting to get into the wholesale merchandise drop shipping business will find it quite the challenge to locate a legitimate and then a good quality company to purchase their wholesale merchandise inventory from. Finding the right company is not only difficult, it is imperative to operating a successful drop ship business.

There are no shortcuts to getting this done right, so do not try to expedite finding a good wholesale merchandise distributor. You should research the available companies thoroughly. I setup a spreadsheet and list the items that I am looking for in a solid company before I even begin. This allows me to track everything and compare when I have concluded my company research.

This spreadsheet can be done in any program or even on paper with your handy pen if you should choose. List some questions that you want answered and list the requirements of the companies for your business.

One of the most important requirements that I have for a wholesale merchandise drop shipping company is whether they have a datafeed or not. A datafeed allows you to download all of the items and their specifications through an ftp software program.

What is an ftp software program?

If you aren’t clear on what an ftp program is, you should begin your education on this subject immediately by doing some Internet searches. Ftp programs are easy to use but do require some familiarization and practice to use properly.

Why would I want a datafeed?

The datafeed puts all of your item information in one file for easy use. This file can be broken down and toyed with however you like within a spreadsheet program and then used to populate your webstore with merchandise. This may be another area you should research before getting started.

If your store is only going to carry a few products, a datafeed may not be necessary. You could always populate the inventory in your store by hand. This may be time consuming, and updates will be time consuming as well, but would give you a very in-depth education by doing this by hand. I no longer do my inventory updates by hand as it takes too much time. You will find this true as you open one store after another.

What about product pricing?

This can be one of the trickier parts of finding a good wholesale merchandise distributor. Many companies will not just freely give you access to their wholesale pricing. There are many valid reasons for this and frankly, I don’t blame them. So, you must honor the secrecy of wholesale pricing by not giving it away once you have access.

To gain the pricing list from a distributor, you must first get an account from them. To do this, you will have to prove that you are a legitimate business. This will require a copy of your business license and your EIN number granted to you by the IRS. Some wholesale merchandise companies even go as far as requiring a photo of your store front. At times, you can email them explaining that your company is strictly a website and they will waive this requirement.

A strict requirement to gain an account from a wholesale merchandise distributor is a very good sign. If you can simply get one by asking, then something is not right. And even worse, if they charge a fee to access their database, then something is very funny about this company. Move on without looking back.

Is it ok to email a wholesale merchandise distributor and ask questions before applying for an account?

This can be very important in saving you time and effort. Always feel free to either email or call a company and speak to a new accounts representative. Be professional, but don’t feel like you have to have any magic questions or specific statements to communicate. All you have to do is have your company name handy and possibly your business license information. They will be happy to talk to you as they are in the business of gaining new accounts and making money just like you are.

Ask questions and don’t hold back. The worst the new accounts rep can do is ask you to apply for an account before they will answer any more questions or certain questions. You should try to gain as much information as you can before choosing a company and a quick phone call can be very fruitful.

Remember, how a company handles new accounts can be a very strong indicator of how they handle existing ones. The potential wholesale merchandise distributor should be very friendly and helpful to a possible new account. If not, imagine how they will treat you once your have an account.

If you don’t like the feel of it or the treatment you receive, simply move on.

Remember, jump in with both feet. Do not hold back on questions you have of potential drop shippers. And, always be ready to learn.

William “Cole” Doggett is an entrepreneurial fanatic and guru. He is an expert in the fields of drop-shipping, online retailing, wholesaling and entrepreneurship. He runs an informative blog on Wholesale Merchandise at http://wholesale-merchandise-1.blogspot.com to aid you on the path to success.

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