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…

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By Mikal E. Belicove: Director, Community & Education - Doba

If you and I were to decide to go into business together, and we chose to open up a brick and mortar store on Main Street, there’s no way we’d sign an 18-month lease, order display furnishings, install carpet, hook up a phone line, and hire employees without first knowing what we’re going to sell.

Yet, online retailers–or, more accurately, casual sellers who want to become successful online retailers–do it every day.

Without giving much thought to a company name, product line, or business or marketing plan, new online sellers sign up for services like Doba, work with a third-party vendor to build a webstore, and only then get around to asking, “Hey, what should I sell?”

They head to eBay, see what is selling, and then decide to sell the same products–usually consumer electronics–for slightly less than the competition. They end up being disappointed, mainly because their profit margins are so low.

The problem is that…

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Ebay is the ‘BEST’ opportunity you can use right now to make money online in the dropshipping business from the comfort of your own home.

Thousands of people just like you use eBay auctions on a daily basis to sell and buy products on the Internet; now it’s your time to START your own dropshipping home-based business and succeed in the eBay auctions ‘game’!

There are no special skills required for this dropshipping business, all you need is a computer, Internet access and some basic computer / Internet knowledge.

Dropshipping is when you sell products on the Web, forward the orders to the dropship supplier and, in return, the dropshipper ships the product to your customer (buyer).

You act as the middleman between the dropshipping supplier and your buyer. You can take orders by credit card, fax or any other method you can think of. You can sell via your own Web Site or even through e-mail.

Your profit is generated on the difference between your selling price and the price the dropshipping supplier charges you.

Thanks to dropshipping you can start making money ‘instantly’ without any investment in inventory, warehousing, shipping, equipment, employees or office space.

How do I find something to sell on eBay?

Of course, finding something to sell isn’t hard. Finding something at a “Low enough price” to make a profit on eBay is much more difficult. That’s because eBay is a price-driven model and buyers expect a bargain. If they don’t get one, they’re not buying.

So, the REAL question is:

How do I find something at a ‘low enough price to sell profitably’ on eBay?

Answer: THE LIGHT BULK WHOLESALE DIRECTORY

1. WWB has an entire research section in their Florida office that ‘personally interviews’ each and every wholesaler and dropshipper. Without an interview, no one gets into their directory. No one.

2. They have ‘Very Exacting Criteria’ for being listed. If the source doesn’t meet those criteria, they aren’t listed. For example, they must be ‘genuine wholesalers’ and they must be willing to Sell to eBayers in Low minimum quantities.

Most wholesalers want to sell to big retailers with huge budgets, so finding dealers willing to work with the little guys that’s us isn’t so easy. And, as you probably know, way too many so-called wholesalers are only ‘middlemen’.

That won’t happen with the new Light Bulk Directory.

Having products drop shipped by suppliers, allows you to concentrate on truly important aspects like advertising, sales and promotion.

Pay attention! There are lots of companies claiming to be ‘Drop Shippers’. However, a legitimate drop shipper is a factory-authorized wholesale distributor, or sometimes the actual manufacturer of the product. A legitimate drop shipper should not charge you an ‘account setup fee’ or ask you to place a ‘minimum quantity order’.

Make sure you find some legitimate drop shippers who have the product(s) you want to sell, talk with them on the phone / by e-mail and let them know that you are truly serious about doing business with them.

Customer support counts in the dropshipping business, so don’t hesitate to contact some dropshipping suppliers before you want to work with them.

This will help you decide if you really want to do business with a particular drop shipper or not.

To succeed in the dropshipping business you’ll have to LOOK for hard-to-find products that people desperately need and want to purchase.

The key is to sell products with little or no competition.

I suggest you RESEARCH for quality products & legitimate dropship suppliers, MONITOR the eBay auction listings to see if there’s any competition and TEST the market (e.g. find out if people really want to spend CASH on the product you want to sell)

Remember! Dropshipping makes it EASY for you to start and run your own home-based businesses on a shoestring budget; and eBay is the ‘perfect’ MEDIUM to expose your product to potential buyers all over the globe!

Thomas Griffen is the CEO of Urbanload. Do you want to make easy money on eBay? Over 2000 resellers can’t be wrong. Urbanload offers you a free startup ebay online dropshipping business. Visit Urbanload.com to start our eBay Dropshippers reseller program.

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As ecommerce grows everyday, people are looking for ways to benefit from the great potential the internet has to offer. For new commers to e-commerce or ebay selling, the hardest step is to find legit and reliable wholesale products suppliers. Drop shipping is a quick and easy solution that can get you up and running fast, but you have to do it right or you can easily fail. In many cases, ecommerce startups fail misreably for lack of research and planning. My goal in this article is to explain how drop shipping works. I’m also going to explain the pros and cons of dropshipping, What you need to do before even contacting your first supplier, and how you can avoid the most common mistakes that beginners make.

But what is drop shipping anyways?

When you dropship products, you essentially have an arrangement with your wholesale supplier where by they ship your orders directly to your customers. In most cases, they will include your company name on the shipping labels instead of theirs. Some wholesalers provide this service for free while others charge a nominal fee for it. So, what does dropshipping mean for your business? Let me tell you!

Why Drop Ship Products?

There are many advantages of using dropshippers when selling online. Here are a few of them:

You essentially get customers orders before you order them from your suppliers. This means that your initial investment is minimal, and in some cases none.

No inventory to hold. This by itself is one of the big pros of drop shipping. You don’t have to pay for storage fees, or invest in expensive merchandise, that might stay around for a while before it is sold.

You can diversify your offerings as much as you want. You are only limited by finding the right dropshippers for the merchandise you want to sell.

Sounds good you say, but is there any disadvantages? Well this is life, and as any other thing in life you should expect some cons.

Why Not Drop Ship?

Obviously, there are also some cons that you have to consider. here is an idea about some of them:

A lot of middle-men and scam suppliers. This is a big problem now, a lot of wholesaler wanna-bes are springing on the internet everyday. You have to watch out when choosing your drop shippers.

Inventory volatility. In some cases, you might get an order for a product that is out of stock. You have to either refund your customer or have them wait longer than usual if the wait is not too long.

Smaller profit margins. This is a major one as it directly affects your bottom-line. Like I mentioned before, many internet dropshippers are middle-men that are basically drop shipping to you! For that reason, they don’t have the best profit margins, if any.

Customer service issues and returns. Your customers don’t know your suppliers, they know you. When they have any issue or request such as a refund, they will direct it to you. In that case you have to deal with those issue transparently and professionally. This might mean losses for you at times.

You cannot control the quality, shipping times, customer service response of your suppliers. This might hurt your business at times, when you can’t do anything about it.

What to DO Before Searching For Wholesalers

Well I didn’t want to make things look so gloomy for your future online ventures, but a reality check is needed before taking any serious steps. Now you might ask, should I forget about drop shipping? My answer is NO. If done right, dropshippping could be a very effective strategy at least for jump starting your business. My advise is, if you are just starting out, and you don’t have a lot of money up front, consider to drop ship your products. That doesn’t mean that you jump at the first drop shipper that comes your way. You need to do your homework and find good quality products and good reliable and most importantly legitimate wholesalers that offer drop shipping services.

Before you jump into finding drop shippers, decide which products you want to sell. Go to ebay.com, shopping.com, and pricregrabber.com, and search for those products. Study your competition and pricing. Look how your competitors are pricing their merchandise. Record a price range for all the products you might consider selling. Also, try to read some product reviews, and merchant ratings if avialable.

On ebay look at how the sellers are laying out thier auction pages, and who’s selling, and what kind of demand exists. This is an essential step before even looking for wholesalers. When you do this you will also be able to see how popular differnet products are. On ebay you can tell by the number of bidders. On comparison shopping sites, you can look at their popular products sections, which will give you an idea about what consumers are buying.

In conclusion, study your market and choose your products before you begin selling a single item. If you are on a shoe string budget, then consider drop shipping your products using reliable and legit wholesale suppliers.

If you have some capital to invest I would advice buy bulk wholesale. You will get better prices for actually buying the merchandise. On the other hand that also means arranging a storage space…etc. So, decide what you will sell carefully and test different products first, ad then move forward with an expansion startegy.

Good luck with your ecommerce ventures.

Thomas Griffin is the founder of Urbanload.com - The #1 eBay Dropshipper. Over 2000 eBay resellers can’t be wrong. Make money with our eBay Dropshipping Reseller Program. Don’t fall for scams and overpriced dropshippers. Choose only certified eBay Dropshippers.

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