What is drop shipping?
If you are just beginning an online business or expanding your business and don't have the money or the space to maintain an inventory, you may be interested in the sales method known as "drop shipping".
This sales method allows you to begin your business without any cash outlay, without any inventory,
and without any risk.
Here's a brief introduction of how a company of your interest can help you earn a substantial income right from the comfort of home.
Please, review each individual drop shipper for their policies as these are just typical guidelines of how drop shipping works and may not reflect each company listed in our wholesale workbook.
Lets move ahead and assume your located a company in which you wish to sell their products..
The Source {Chosen Company or Companies}
Each company will have a set price for you.
This is not the retail price but wholesale price in which you will pay once you have received orders.
Do some investigating so you can be competive with the marketing the product.
.
Lets say you are selling art prints from company B. They are more than willing to dropship for you.
Each 8x10 framed print costs $6.99 plus shipping of $6.95 anywhere in the US.
You must now set your retail pricing for these products. If you have already compared similar sites and ebay, & the average print cost 16.99 per print you can then set your retail a bit lower.
Lets say you want to make it $10.50 per print.
This is still a nice profit for housing nothing but if you must add on your auction fee's that will need to be figured into your retail price. ~6.99+2.30 {auction fee} =8.29 your final cost~
Your competitors are paying the same & making a $8 + profit.
You can beat this but setting your retail price too: $13.50
Remember the buyer pays the shipping not you.
1.You post your items for sale on the online auctions, your own website, or offline where you have made available brochures.
Important: Always check in daily to update your sales. Do not let a customer sit and wait.
Have easy customer inquiries set in place & always do a follow up ~thank you~
Customer Purchase:
Place the order quickly.
You have already collected your full retail price & shipping now it is time to place the order.
You will only pay the dropshipper the wholesale price & shipping cost. The rest is your to keep!
The Dropshipper:
The dropshipper will receive your drop ship order into their database and begin to process it immediately and ship
the order direct to your customer usually with your return address on the label.
Note: It is important to know if you dropshipper is blind dropshipping or using your return address.
One is better than the other.
Blind Dropshipping:
The company sends your customer their products with a blank invoice. There is no mention of their company name & often no mention of your company. Just an invoice with the costs of the sale.
Most dropshippers offer you the availability of having the invoice with your company name and return address.
Always opt for this whenever possible.
Very Important:
Before choosing your drop company for the selected products of choice do make sure you understand their return policy. This is very important to your success using a dropshipper. Some companies only offer a limited time for returns. This means the customer has your return address and if they are not satisfied with the product will return it to you. And then you must return it to the company for the refund. It may takes a few weeks or up to 30 days. So as you can imagine it is very important to know your companies policies so you can set your own company policy.
Using dropshippers are a great way of making money with very little commitment, but it is not easy! You must be willing to start out from the get go with the frame of mind that you are now running a business. It can be a hobby but it is still a business and must be cared for in the same way as if you were working for someone else.
It is your reputation at stake!
How crafter's can take advantage of offering their services:
Offer your handmade products to those seeking products to resell.
Know how to price your work accordingly.
If you are offering dropshipping for your designer dresses's, the formula can vary.
There are companies out there that do not give exact wholesale pricing but most do.
Wholesale is at least 50% of the retail price. This means the manufacture sets the price x 3
Let me try to break it down..
Jenna makes hand dyed baby onesies..
Jenna has been selling them on the market to upscale boutiques.
Jenna has done her marketing research to see how to price them accordingly and stay competitive.
Jenna has agreed that the average price for her designer theme onesies are to be set at $24 per piece.
This means if Jenna is to offer wholesale she is willing to give a bit because she has set her wholesale
requirement purchases to buying in units of 6 pieces.
Jenna;'s wholesale price per piece is at $10.00 totally $60.00 per unit.
Jenna makes money and so can the retailer.
However, when offering dropshipping as a method of business. The figures are a little different.
Remembering the marketing research and product testing has already been done.
Jenna knows her products sell competitively at $24 so she is willing to offer dropshipping with a 30% discount.
Now the person using Jenna's product for resale can use the retail pricing & descriptions + pictures
to add to their own business.
They sell the item...Collect the money...and then pay Jenna.
They are keeping 30% of the retail price for the own business.
This is where a crafter can make good money, but you must have all you requirements established from the get go.
Retail price
Wholesale price {requirements like buy 3 per unit ect..}
Dropshipping price {percentage}
Product pictures and descriptions in place and available for the client to use.
What are you offering: Blind dropshipping or the clients business information on the invoice/return address
Becoming a qualified dropshipper is very easy but you can not forget the only way to get clients is to market yourself.
If you make a product and place it on you website without a marketing formula how will anyone find you?
Crafter's have to work even harder because they are now the manufacture + marketing agent. Do your work before
you decide to use this method of sales.
Apply what you now know to our ~World of Products~ Wholesale Workbook. Using our workbook for your home business will help you move quicker in the direction you want to make money working from home!
For more detailed information you will need to visit small business groups, ezines and related home business websites
Research before you leap. It is your reputation at stake..
Have a great day!
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