Drop Shipping Information
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> Drop Shipping Information
Drop shipping is a great way to start selling products
online without having to spend a ton of money to carry inventory.
The idea works like this, you sell other people's stuff online and
once the sale is completed you notify the merchant and they will
fulfill the order.
I still use drop shipping to this day because of the
lack of risk. Think of it this way, if I were to
purchase a large number of items for a new website I'm
out all of that money. Since I choose to start out by
drop shipping I have no investment so if the product
doesn't sell well I'm not out anything.
How Drop Shipping Works
The process of drop shipping is actually very simple. You first will
want to find a company that drop ships a product that you want to
sell. You would then add those products to your website through some
sort of
shopping cart software.
At that point you would accept the orders on your website so you'll
need to have some sort payment processor such as a
credit card processor
or even a free option such as Pay Pal.
Once an order has been completed on your website you'll need to
notify the drop ship vendor. This can be done a variety of ways,
you'll need to get that sort of information from the vendor.
A few ways that I've had to submit orders in the past was by
simply emailing them with the details, submit the order online and
some requested that I fax the details to them. Again, you'll need to
get this information from the drop ship vendor.
Finding Drop Shipping CompaniesThe process of selecting a
new product to offer and finding a vendor that offers drop shipping
is actually very simple.
Worldwide Brands
has put together a directory of vendors that offer drop shipping,
all you need to do is type in a product an it'll display vendors
that offer products that you're looking for.
The biggest obstacle that you'll run into right now is the $299 fee
for use of the directory. I realize that this is pretty steep but if
you can get a site online you should be able to make it up quickly.
With that said, a free source of drop ship information can be found
at
www.WholesaleCentral.com.
The only obstacle that you'll run into is that they will accept
just about anyone who requests to signup with them. This can be a
problem if you sell a product and then find out that the merchant is
some sort of scammer.
Worldwide Brands
actually has a group of people that go through a verification
process so you'll know that they vendor is legit.
Fees Associated With Drop Shipping
When you select a drop shipping vendor be sure to find out if they
charge a drop ship fee. This fee is generally added to cover
expenses related to shipping materials, handling or just the
convenience of not having to purchase inventory.
Through my experience, the standard drop ship fee ranges from $1.50
PER ITEM to $2.50 PER ITEM. I'm not big on using capital letters but
I felt that it was important to stress that this fee is usually
attached to each item you sell, not just per sale.
Every once in a while you'll find merchants that charge $5 or
more as a drop ship fee. I can tell you this right now, I would
never do business with them. That $5 is coming from your profit so
the only company that's making money is theirs.
Pricing Associated With Drop Shipping
The pricing that you receive from a drop ship vendor is going to
vary. I couldn't even start to give you ideas on what to expect.
Often times you'll pay somewhere between 50% - 60% of the retail
price.With that said, you'll also find merchants that offer more
than a 50% discount and you'll find that offer less than a 30%
margin. This is often times dictated by value of the product but as
I mentioned, it's going to vary so be sure to get this information
before taking the time to develop a website.
Pricing Products That You Drop Ship
When it comes to pricing the products on your website you'll
generally stick with the MSRP. If you price it for more you'll run
into lost sales for those people who research a product before
purchasing it.You definitely don't want to price it much under
the MSRP because that cuts into your margin and with the drop ship
fees you'll be working for pennies.
A saying that I have addopted in my price testing is that 'I'd
rather have a little bit of something rather than a whole lot of
nothing'. My point is that although I think that if I can sell an
item for more I'd rather not take the chance on losing a sale
because I get to greedy with my pricing.
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