A Drop Shipper is a wholesale company or manufacturer of real products that only sells to real-legitimate businesses. (I.e., a business that is registered with a Tax ID. Cost? About $65, depending on which state you live in).
What I mean when I say “sell to legitimate business” is this:
You take an order from your Online Store for a nice set of wind chimes or maybe a power drill. You sell your product for $70.00 plus shipping and handling. You then contact your Drop Shipper or Drop Shippers (You can have as many as you want to cover a wide range of product types). You buy the product that you just sold Online for $40.00 from your Drop Shipper for $70.00, and then the real magic happens.
The Drop Shipper SENDS THE PRODUCT DIRECTLY TO YOUR CUSTOMER!
The Drop Shipper also puts YOUR COMPANY NAME directly on the shipping box that they send to your customer.
How about that!
Drop Shipping is truly wonderful. There are literally thousands of Drop Shippers out there with, at last count, around 500,000 different products. The products range from Blood Pressure monitors, to Gift Baskets, to DVD players to Oriental Rugs to Patchwork Kitty Statues. You can find just about any name brand, just about any category, at just about any price point.
First, you need to become a real business in order to work with a Drop Shipper. That means you go to your local courthouse and register a business name. Then go to your local IRS office and get a Tax ID number. This whole process can cost as little as $25.00 to as much as $75.00. This is, of course, for a sole proprietorship or partnership. If you want to incorporate or form an LLC (Limited liability corporation), check out this site The Company Corporation. There are lots of advantages to being incorporated, including liability and asset protection, but it costs a bit more and takes more time to get started.
Once you have all of the requisite certificates, you then contact a Drop Shipper and create a relationship with them. They have you fill out an application, sign you up, and send you a catalog of their products, which you then sell on your website. Some Drop Shippers may also have a website where you can go and download their images and sales material directly and put it right on your website.
The Drop Shipper sets the price that you pay.
You set the price that your customers pay – The difference is your profit!
It’s really a great way to start an online business in a few short days. You can even do it within a week if everything slips into place.
Having a relationship with a Drop Shipper is FREE! And if you look more than casually, you can find some really niche products (meaning less competition for your store)
And, when the holidays roll around, your set for BIG DISCOUNT GIFT BUYING for the WHOLE FAMILY!
How Do I Figure Out What Products Will Sell?
The $64,000 question. When I first evaluated the vast amount of products available for me to Drop Ship, I was overwhelmed. Visions of Huge Virtual Shopping Malls with my name on the marquee swirled around in my head. And me, swaying in my hammock counting my money with MS Calculator…
Even though you will be tempted to sell absolutely everything – DON’T!
Know this now; you cannot compete with www.Amazon.com
Maybe you will someday if the fates have blessed you and you have unlimited cash. But if you don’t get blessed and have a fixed income – DON’T WORRY! You will not need to compete with Amazon in order to be successful!
The key for those of you that want to succeed in online Retail is to SPECIALIZE! Have a boutique mentality. Not Boutique as in Knick-Knack crap. But boutique as in NICHE Market.
If you have a personal Passion for your Harley – Sell Harley Stuff! Like NASCAR – SELL NASCAR STUFF! Why? Not just because you like it, but also because you can TALK ABOUT IT! You can’t win a price war and don’t have to if you can offer something to your potential customers that the other Hoo-Has can’t. VALUE – ADDED INFORMATION about the product you’re selling will set you apart from the noise, and your customers will trust you for it!
For Example, your hobby is Astronomy. You know all about the Heavens and Star Gazing in particular. USE that knowledge to help your customers make informed buying decisions. Show them how a Refractor telescope is superior for Astrophotography than a Reflector scope. Organize a subcategory of your telescopes into a section called “Astrophotography Ready”.
Ask yourself, when was the last time you asked a sales clerk for advice? Did they answer you? Did they answer you knowledgeably? If they did, did you feel more comfortable about the product? About you’re buying decision? About the store? All of these feeling and emotions apply here in your Online Store! There are hundreds of examples of e-stores that sell less than 30 products, and they are doing really, really well!
I can’t say this enough – Specialize!
Sell what you know. Especially if it’s a product that you have researched and found to be in “In-Demand”. In addition to making your store stand out vs. the competition, it also helps you zero in on your target market! And remember, the more focused your audience is, the better conversion rate you will have when it comes time for the shopper to become a buyer.