Drop shipping, for those
who are unfamiliar with it,
is a system whereby you promote
the products of a particular
manufacturer, take orders
directly, and the manufacturer/source
handles all the inventory
and fulfillment functions
for you.
In a nutshell, here is the
drop-ship system:
==>You generate and accept
the order.
==>You take your profits
out of the sale price.
==>You forward the order
and the wholesale cost to
the drop shipper.
==>The source factory
ships directly to your customer.
The benefits of this arrangement
are probably obvious:
* No inventory cost to you.
* Substantially higher profits
to you over what most regular
affiliate programs allow.
* The ability to quickly
set-up inexpensive, highly
targeted, niche or mini-sites
to test and promote diverse
products.
This process has been around
for years and has been responsible
for many highly successful
mail order dealer relationships
in the past. Many of the top
catalogers and other direct
response marketers, have been
using this system to increase
profits for decades. If you
have ever ordered a high priced
item from a mail order catalog
and been told that the product
was being shipped from the
factory... then you have experienced
drop shipping first hand.
Drop shipping is, I believe,
a virgin un-tapped storehouse
of profits for todays internet
marketer.
On-line directories exist
[http://www.dropshipprofits.com]
which reveal essential contact
information for drop shippers
of over 2,000,000 products
and 4,000 brands. Most legitimate
drop ship sources will require
that you have a state tax
reseller number in order to
approve you to sell their
products and give you the
wholesale pricing you are
looking for.
Beware of any drop ship source
which requires you to pay
a fee in order to become a
drop-ship dealer... or requires
a membership. These are generally
organizations which make their
money selling "drop ship
licenses"... and are,
for the most part, scams.
Legitimate drop shippers and
factory sources never charge
you any fees other than the
actual wholesale cost &
shipping costs of the products
you sell.
Another caveat... always
make sure that you have a
written agreement with the
source factory that you own
the customer! The factory
or drop ship source should
agree in writing not to solicit
your customers in any form.
This is very important to
you. Your customer list is
one of your most important
assets. If the factory you
are dealing with balks at
this request... use another
source who will agree.
Almost every conceivable
type of product is available
from a drop shipper willing
to ship products in single
units under your companies
name. Pick your interest area...
electronics, consumer products,
agricultural & industrial
products, office equipment
& supplies, hobby gear,
recreational / sporting goods,
clothing, furniture, etc.
The list of available products
from drop shippers is almost
endless.
The products actual source
is invisible to the consumer.
The seller (you) is able to
build a database of customers
that he/she owns and controls
(by agreement with the manufacturer)
and has all the direct marketing
advantages that accompany
that arrangement... while
eliminating the need for maintaining
expensive inventory.
This arrangement offers maximum
flexibility and cost savings
for the seller. If a product
does not sell well online
you can pull the advertising
(web page or mini-site) instantly
with very little cost to you
outside of the actual time
it took to build and test
the web marketing effort.
Or, since this type of page/mini-site
is so inexpensive to maintain
and host... you can simply
leave the pages online and
take whatever orders trickle
through... while you move
on to the testing and promotion
of new drop ship products.
A quick marketing test can
be done on eBay or other auction
site to determine if the product
sells... and at what price.
The manufacturer benefits
from this relationship by
gaining a legion of active
marketers promoting their
products... at little or no
cost (other than those small
costs involved with supporting
the marketer with online marketing
materials like product images,
sales materials, etc).
As a marketer you are looking
for several key components
in developing the drop-ship
relationship with a source
factory or distributor:
** High Quality Products
** Blanket Product Liability
Insurance (if applicable)
** A clear guarantee and
return policy
** High Quality Marketing
Materials ... product images
(gifs, jpegs, etc.), selling
copy, other suitable web graphics,
etc.
** A Customer Service Department
that will work with you to
develop the best selling situation
for you.
If you are a manufacturer
seeking to expand distribution
(or an inventor with a new
product ) you will find the
willingness to drop ship in
single units will give you
a strong competitive edge
while you carve out increased
market share at little cost.
If you are an online marketer
interested in offering high
profit products to your niche
market (your website visitors)
without incurring high front-end
development or inventory costs...
then drop shipping is for
you.
Internet marketers are uniquely
positioned to take profitable
advantage of the drop ship
arrangement and should give
this system a serious look.
