Drop Shipping Your Way to Increased Sales &
Profits
Thom Reece
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 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 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.
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.
(c) Copyright 2005 Thom Reece All rights reserved
Thom Reece is the CEO of On-Line Marketing Group, a direct response
marketing agency with headquarters in Hawaii. He is the creator of the
Online Marketing Resource Center
http://www.e-comprofits.com
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