Drop Shipping

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My three rules for anyone thinking of venturing into a Drop Shipping Home Based Business are:

• Steer clear of anything 'ready-made', including websites. No-one supplies anything for nothing (except, maybe information and advice, like me ).
• Don't try to sell anything which is already represented online by thousands of other websites.  Sell a relatively 'specialized' product to a 'niche' market.
• Don't pay one red cent to anyone for the privilege of selling their products for them.

Now that I've said that, let's get on with it.

It is said "you can sell over 700,000 products from 2,200 national brand names on your website or auctions without spending a cent .... using drop ship distributors". I'm not altogether sure about that and I can't confirm the figures but rest assured there are literally thousands of products supplied by drop shippers and they come in at least, hundreds of brands and types.

A Drop Shipper or Drop Ship Distributor is a manufacturer or wholesale company that ships one (or more) products at a time directly to your customer on your behalf, straight from their warehouse. You don't have to pay to put products on your shelves (in the garage ). You don't warehouse anything, and you don't have to ship anything. You simply advertise a product/s on your website, using images and text adds etc (these can be supplied often by the manufacturer or wholesaler). You receive orders from visitors to you website (hopefully), and and you then send those orders on to the Drop Ship distributor or the manufacturer. They ship the product directly to your customer. You don't have to handle it at all. You get to set your own price (although if you want to sell anything, it must be reasonable), and pay the distributor the wholesale price, generally after you are paid.

Your Website

From a website point of view, it is a good way to start an internet business and it's relatively inexpensive to set up a website (provided you can build one yourself) and start advertising products for sale. Getting the website listed in Search Engines etc is another story altogether, but suffice to say, that's a problem that every Internet Home Based Business has to deal with, one way or another. It's all part of the most difficult aspect, as is always the case, of getting visitors to your website, and getting visitors who actually want to buy something that you sell. But this is the same problem every business on earth (whether on the Net or not) faces. Getting customers to notice them and their product and convincing them to buy from them, rather than from someone else. (for more detailed information on a Home Based Business website, see our 'Website Resource' page).

The biggest single difference between an Internet 'retail' home business and a 'real world' 'retail' business is that the competition isn't down the road or in the next town, they are only a single 'click' away. So it can be hard. At the moment it is reasonably easy to earn at least something through retail selling on the Internet, because it is very young. However, as the years go by and more and more people discover the opportunities available for home based business, it will get very crowded and much more difficult to make a sale, let alone a living. So, my advice to anyone and everyone, is "get in quick' if you want to make a permanent living online. Do it carefully, but do it now!!

Finding a Drop Shipper (Manufacturer or Wholesaler)

The biggest problem in getting your drop shipping Home based business going is finding a product and a manufacturer (or wholesaler) willing to drop ship for you. You simply have to approach manufacturers (best because the more middlemen you have between the manufacturer and you, the less your profit). There are trade magazines in which some manufacturers and wholesalers will advertise. However, you may have to do some leg work (or phone work) before you find a manufacturer for what you want to sell.

There are 'Drop Shipper Directories' which are sold on the Internet for from $40 to  $70. These are expensive but you will find that any directory that costs only $5 to $10 will be useless, with old information and disconnected phone numbers. You get what you pay for, as with everything. I advise, at least in the onset, to try to find a manufacturer or wholesaler (manufacturer first to cut out the middleman, which is what the wholesaler is) who is willing to drop ship for you, on your own. If you use a directory you will be competing with all the other people who have purchased the same 'directory' and that will make it so much harder. You are far better off taking the time to find your own drop shipper (or someone who is actually advertising for website owners) than using a directory (and paying for it to begin with).

When you find someone willing to drop ship for you, you have to make sure that they have a return policy. Most reputable manufacturers have a return/refund policy of some sort. If they have, you will simply be able to refer any return or refund enquiries to them when and if your customers want to return something, which is faulty or no longer wanted. If they don't have a return/refund policy at all, leave them alone. You will be stuck with having to deal with (and probably honor) any returns or refunds. Home Based Businesses don't have the financial depth to deal with this sort of problem, especially in the onset.

The Product/s

You will need to decide what it is you want to sell online, obviously before you go looking for a drop shipper. There are literally thousands of online stores (most home businesses and affiliate marketers), so there is really no point in trying to sell something that is already well represented online. You will just become frustrated trying to compete with people who are already established and with larger 'online shopping' concerns. Your best bet is to find a product that is relatively rare, but still required and not very commonly sold on the Internet. This may sound a bit difficult, but the Net is young and even though there are heaps of items available, there are sure to be things, which have only a small representation online. These 'small' relatively 'specialized' products are called 'niche' products or a 'niche' market. This is where your drop shipping home based business success probably lies.

The Scams and Scammers

As with everything else, particularly online, there are people who are out to take advantage of the new and unwitting. Drop shipping is no exception. Keep an eye out for and avoid these types of arrangements:

• Websites offering you an online business, which comes complete with a 'free' web site and products that you can only be bought through them. This particular model usually comes with the necessity to open a 'Merchant Credit Card' account so you can accept them online. This credit card account will usually cost about $20 or $30 for a monthly account fee. (A bit unreasonable when anyone can accept credit cards online through the Internet Payment Facilities like Stormpay - see our Internet Payment Resources page). The purpose here is to have you waste time and money advertising and selling products that they buy from genuine wholesalers and drop shippers and then marking them up to sell to you. These mobs will also usually charge a monthly 'fee' for the privilege of selling products for them.
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• Offers of lists of drop shippers that cost $5 or $10. As I said earlier, "You get what you pay for". If you pay $5 for a drop ship list, you get exactly that. A drop ship list that has many disconnected phone numbers, companies that no longer trade and possibly some that never existed at all. The reputable lists will cost you $40 and upwards.
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• Online companies or websites that charge for the privilege of selling their products for them. They generally charge a monthly fee to allow you to sell their stuff or be their 'agent'. The products will often be overpriced or worthless (or both) and consequently, they know you won't be able to sell anything anyway, so they make their money b y charging a monthly fee. There are hundreds of thousands of Affiliates online who do this and it costs them nothing, so why would you want to pay to sell for someone when you can be an Affiliate an do it for free and earn commission. Admittedly, commission for affiliates isn't as good as the profit that can be made drop shipping, but at least you don't have to pay for the privilege.

Basically, if someone offers to do all the hard work and tells you to sit back an reap the benefits, it's a scam!! All these 'scams' are designed to 'sucker' in people who are new to the Internet and/or Home Based Business. There is only one way to make a Home based business work and succeed and that is with work, knowledge and experience. I can help with the knowledge as best I can, but the other two come with time, so be careful. The same thing applies online as applies in the real world - "If it seems to good to be true, it probably isn't". The only difference is that this probably applies lore online than anywhere else, because of the lack of accountability.

A genuine Drop Ship Distributor should work something like this:

• They will be a factory-authorized wholesale distributor (authorized by the manufacturer), or sometimes it will be the manufacturer of the products themselves. They will ship to your customer from their own warehouse, not just pass the order to another 'middleman' (hence driving up the price) who may or may not have a warehouse. 

• There is very rarely any set up fee or charge to go into this business. If there is, it should be with a very prestigious or well regarded company. However, my rule is, don't pay anyone for the privilege of selling their products for them. (This also goes for Affiliate Marketing too).

• They should always be perfectly willing to ship 'one-off' items (i.e. single units) of a given product. Don't be drawn into companies that have 'minimum buys' or ask you to pay for a certain quantity and they will ship them individually to single customers as they buy. You should be able to ship one item to one customer and pay for only one item.

If you have any questions or concerns, please email us at info@online-plus.biz. Steve will get back to you as soon as possible. But please see our FAQ page and read about the topic before doing so. He is very busy.