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What Is Drop Shipping? The Perfect Small Business Solution
Drop
shipping allows you to sell product WITHOUT the need to use
warehouse, shipping department, and keep inventory. It enables
small business to grow and sell many different kinds of products
by just establishing a small business. If customers make an
order, you send an order to drop shipping agent and that is
it.
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.
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