Posts Tagged ‘drop ship’
How To Find Manufacturers That Drop Ship
Friday, November 2nd, 2007
Starting a retail business of your own is a proven way of making cash in today’s easy access market. The Internet and other world-shrinking processes have made it possible for anyone to turn a tidy profit by finding goods and selling them directly to customers or even to larger retailers, through EBay, other sites, or simple legwork.
The trick in making some good money at this business is to ensure that the goods you are purchasing come at the lowest possible price, so that when you sell them, you are assured of the highest potential profit. You want to eliminate as many “middle men” as possible so that your original price stays nice and low. This means that you want to buy directly from the manufacturer; additionally, you want to reduce or eliminate the cost of shipping, which can really cut into your profit margin.
In order to do this, you need to find manufacturers that drop ship.
Manufacturers vs. Drop Ship Companies
It’s important to note that we are not talking about drop ship companies here. Drop ship companies are middle men who purchase goods from manufacturers and then sell them to retailers at a profit. If you use a drop ship company, you’ll have to either raise the prices of the goods you are selling or give the company a cut of your profit.
Either way, your competitors will be making more because they are probably buying their products directly from a manufacturer who also drop ships.
Where to Look
The most obvious place to look for manufacturers who also drop ship is on the Internet. Start out with a basic search engine query - type in “manufacturers who drop ship” or some related phrase in the search box, and begin looking at the pages that come up.
The key here will be patience, and also an ability to follow information trails. A lot of the pages that you find will link to other pages, and you may have to go through a couple before you find some really solid information. Some of the best sites will include discussion boards or message boards where forum members discuss who they use when it comes to drop shipping manufacturers.
The other thing to keep in mind when you are looking around on the Internet is that there is a lot of misleading information out there. Even usually reliable sources such as message boards can be populated by “people” who are actually working for certain companies, trying to trick you into using their services by offering rave reviews. That’s why your search needs to include some discernment as well as patience. Look for recommendations of a single manufacturer on several different sites; you should also do a search on that company’s name in a search engine to see if you can find both good and bad.
Other things you can use to determine if the site or manufacturer is the best deal for you are offers such as money back guarantees - and do a bit of research into the developer of the site as well. Solid leads will usually have real-life credentials, so don’t be afraid to phone around to make sure they are who they say they are.
Finding a manufacturer who also drop ships to you is actually pretty easy, although narrowing the list down to a final decision will take some time, patience, and work. You need to make sure and take all the steps, though, so you will be sure that you are making as much money from your sales as possible.
Tags: advice, drop ship, Leeia Ladipoh, manufacturers, Product Sourcing, source, sourcing products, tips
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Drop Shipping Inside and Outside of the U.S.
Wednesday, October 3rd, 2007
The success of drop shipping businesses in the United States has meant there is a growing awareness of the potential of this endeavor both among citizens of America and those who are located elsewhere. One fact about drop shipping is that it has enjoyed its creation and rise in the U.S. - and that means that by far the vast majority of businesses that revolve around drop shipping will have to use a drop shipper based out of the United States.
There are a couple of scenarios for a small business that uses the services of a drop shipper in the U.S. while being located outside of the U.S. themselves. The first is a business which relays the items to customers in the United States, the second a business which uses the States-based drop shipper to get goods to clients in a country out of the United States.
In each case, there are several different considerations you need to keep in mind in order to ensure that your business runs smoothly.
Using A US Drop Shipper: For U.S. Customers
This is by far the easier of the two scenarios. The only paperwork you will have to worry about are your own records of business; that is, the summation of sales and profits that you will use to calculate your taxes and plan your business year at year end.
You should keep a couple of things in mind. First of all, check to see what level of income you can generate through sales according to your government before you have to start adding sales other taxes. Failure to do so, and to accommodate this in your final sale price, could see a big dent put into your profit margin at the end of the year. Second, keep a close watch on the international money market; it can vary greatly week to week, and that means a lucrative proposal could turn into a money losing endeavor in a matter of months.
Using A US Drop Shipper: For Non-U.S. Customers
Using a U.S. drop shipper for customers who do not live in the United States is a much more complicated proposal, and one which requires a lot more attention to detail. Right off the bat, you need to be sure to include sales tax, goods and services tax, and any applicable duties within the final sale price. Often there are brokerage costs included as well, and of course you can’t forget the all important greenback-to-other-currency ratio.
Finally, in all scenarios, never forget that while there are plenty of legitimate drop shippers based out of the United States, the industry has given rise to many successful scam plans as well. Using a foreign drop shipper means it is that much harder to check up on their legitimacy, and they may not operate under the same governmental regulations as you have to abide by. Make sure to dig deeply into the history of any drop shipper you are thinking about using; don’t take the word off of just a handful of sites - make sure to explore several companies before committing.
Tags: Doing Business Internationally, drop, drop ship, drop shipper, drop shippers, drop shipping, Leeia Ladipoh
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Choosing the Right Drop Shipper
Thursday, September 27th, 2007
Drop shipping is one of the best ways to supply products for your online business without worrying about manufacturing processes or warehousing costs. You get to concentrate on marketing your business while someone else handles the shipping. A drop shipper sends the goods to your customers, so you don’t have to. Another advantage of drop shipping is that you don’t have to pay for products until you sell them. That translates to less risk for you.
Selecting the right drop shipping vendor is important because a good supplier won’t let you down when you make sales. So how do you find a reputable drop shipper for your online business?
First, before you even begin, it’s important to set your business up properly. Even though you’ll be working online and someone else is going to have their hands on the actual products, it’s a good idea to apply for a business license and tax ID number. Treat drop shipping as a real business - this means you will have to pay taxes and cover yourself legally just as you would if you were running a more traditional business.
Secondly, search for reliable and reputable wholesale drop shippers that provide stellar products you can sell in large volumes to a wide variety of people. With drop shipping in particular, making a large amount of sales is crucial to turning a profit.
Once you’ve found a good drop shipper, make sure you invest a lot of time to properly market your business online and through Internet auction sites such as eBay. This will also allow you to test out your drop shipper and make a final decision about whether or not you want to work with them. If the experience doesn’t work out from the start, when you’re still growing as a business, it may be a good idea to look for another drop shipper and save yourself some trouble down the road.
So how exactly do you find a drop shipper? A good way to start is to create relationships with wholesale drop shippers. You need to create solid contacts so that your business will thrive. Source out drop shippers through your own local research, as there are many scams online that you should avoid at all costs. The best way to start looking for drop shippers is to research companies and contact them to find out whether or not you can strike a drop shipping deal.
If you do decide to search for a drop shipper online, make sure you research them thoroughly and peruse drop shipping review sites to find out which companies are the most trustworthy. Try to work with a company that will allow you to sell products in large quantities so you can make a good profit. With drop shipping in particular, you have to sell in large volumes to be successful. Look for a drop shipper that offers products in demand.
When choosing a drop shipper you really have to avoid companies that act as middlemen. You won’t find good prices with these companies, which falsely sell themselves as drop shippers. It’s very important to do your homework. Research the drop shippers on your short list and try to find the best company for you. One sign of a good drop shipper is their willingness to communicate with you quickly and efficiently. You don’t want a drop shipper to leave you in the dust when you need them the most.
In the end, as long as you do your research and find a reputable drop shipper, you should be able to build an online business that will continue to grow into the future.
Tags: advice, drop ship, drop shipper, drop shipping, Product Sourcing, source, tips
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The Value of Drop Shipping
Monday, August 6th, 2007
Most retailers agree: drop shipping, if used properly, is a huge time and labor saver.
But is it a money saver as well? It is often said that time is money. But just what is the true value of drop shipping?
We will attempt to answer that question in this article from a scientific approach, using logic to come to a conclusion as to what the value of drop shipping is for you.
The value of time is different for everybody. For Bill Gates, an hour of his time is so valuable you probably wouldn’t ever be able to pay him enough for his time.
Sometimes at the company I work for, we bring on interns. Usually they work without pay. What does the intern consider to be the value of their time? They are giving of their time, and getting no money in return. They consider their pay not as a present monetary figure, but as experience gained, which will in turn makes them more valuable to other companies. Thus it could be said that an intern is considering the value of their time as something that will be paid off in the future.
If I were to invest in the stock market, I would probably spend a good amount of time researching various stocks before deciding on what to invest my money in. I would then wait for a (perhaps very long) period of time before cashing out my stocks.
In such a case, I’m investing my time in the hopes of getting a future payoff for it. If I consider my time to be worth $50/hour, then my goal would be to get a $50 future return for every hour I spend doing research.
When using drop shipping to run part or all of your retail business, you save time by having somebody else track inventory as well as pull and package orders. Additionally, you don’t spend any time running to the post office to have orders shipped.
As an online merchant, you’re well aware of how much time and money you spend preparing an item description and packaging and shipping products. By following the traditional auction model, you actually spend more in time and money to deliver less merchandise. With drop shipping, you can significantly increase productivity, slash costs, and boost your bottom line.
In this article, I demonstrate how you can incorporate drop shipping into your current online business to save 55 minutes on the following tasks:
*Prepare the item description
*Package and address the item
*Ship the item
You also save money:
*Your hourly rate for performing these tasks
*Packaging materials
*Shipping costs
*Mileage to the post office
Let’s do the math.
Saving 12 minutes preparing the item description
I’m a bit of a perfectionist, so I spend at least 30 minutes snapping and editing photos for a single item. (I almost always use multiple images in my item descriptions). Subtract 15 minutes for perfectionism, and let’s conservatively estimate that the average seller spends 15 minutes preparing and uploading pictures for an item description.
With drop shipping you can use the supplier’s images-typically a higher quality than the homespun variety, and they require no time investment on your part. You can trim at least 12 minutes off your time investment for taking pictures, editing images, and uploading them to eBay or a third-party image hosting service. As an added bonus, you get a higher quality image.
To save you even more time, quality dropshippers provide members with rights to "hot link" to the images hosted on our servers. I have personally trimmed my time investment on photos from 30 minutes to 30 seconds using hot links to supplier images!
Furthermore, in most cases the supplier provides an item description for you which again saves you more time. However, since many sellers like to add to or rewrite altogether the item description, we won’t include this time saver in our calculation.
Saving 3 minutes in packaging
Traditional packaging time varies. For a small item that fits in an envelope, you can address the envelope, slip the item into it, and seal it in less than a minute. Larger, bulkier, more fragile items can take even a seasoned packer 10 to 15 minutes to properly package and address. Let’s make a conservative estimate of 5 minutes to package and address an average item following the traditional model.
How much time can you save in packaging with drop shipping? Oh, wait a minute… you don’t have to worry about packaging! You simply place the order online, and the drop shipper packages the item for you. So, that’s 5 minutes minus about 2 minutes for placing the order online for a total savings of about 3 minutes.
Saving 40 minutes in shipping
A single visit to the United States Postal Service can easily eat up 40 minutes of your day. An average round trip takes 30 minutes or more, at least for me, and you may have to wait in line for 5 to 20 minutes, depending on how busy your local post office is and how few clerks are working the counters.
Your post office may have a self-serve counter where you can weigh your package, input the dimensions, and pay at a machine that calculates the postage for you, but that’s still a 5- to 10-minute job assuming you don’t have to wait in line to use the self-serve machine.
With drop shipping, you slash your shipping time from 40 to zero when you place your order. The supplier ships the package for you.
Admittedly, you can minimize the traditional shipping time expense by packaging and shipping multiple items on a single trip to the post office, but with some drop shippers, you simply input the addresses into your account, and you’re done.
Calculating your total savings in time and money
By incorporating drop shipping into your online business, you just saved 55 minutes and slashed your operating expenses. Let’s break it down to demonstrate precisely how much you stand to save in terms of money:
$2.00 in packaging materials, on average (envelopes, boxes, peanuts, bubble wrap, tape)
$0.80 in fuel (assuming 35 mpg, regular gas at about $2.80/gallon, a round trip of 10 miles, not including insurance and maintenance costs of your vehicle)
$7.38 in hourly pay (assuming 55 minutes saved at minimum wage of $8.05/hour)
Do the math, and you realize that drop shipping just saved you $10.18 processing a single item. And that’s what you save if you use very conservative estimates. Just think how much you stand to save if you typically earn $25/hour or $50/hour or $100/hour!
When using a trusted dropshipper, you can slash your costs both in time and money, freeing up resources to invest in market research, networking, managing and growing your business, or just kicking back to enjoy your additional free time.
But to me, drop shipping isn’t just about the time and money I save. The truth is I absolutely HATE packaging, addressing, and shipping. Drop shipping is more about preserving my sanity. Instead of having to focus on menial, unrewarding tasks that I find annoyingly boring, I can focus on the more stimulating and satisfying aspects of running and growing my online business. Drop shipping is the less stress, less hassle way of merchandising online.
Stuart Lisonbee is an eBay Certified Consultant and Doba’s first-ever Education Specialist. Prior to joining Doba , Stuart worked for eBay as a Customer Support Representative, and ran a retail department store’s PowerSeller-level eBay business. Stuart has authored over one hundred articles on online business success, along with several eBooks designed to help others grow their eBay businesses.
Tags: advice, doba, drop ship, drop shipping, ebay, Product Sourcing, source, stuart lisonbee, tips
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