Home
>
Online Auction
>
Drop Shipping Your Way to Increased Profits

Drop Shipping Your Way to Increased Profits

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.

Thom Reece is CEO of Online Marketing Resource Center [] and publisher of "Thom Reece's Web Marketing Strategies & Techniques Newsletter". You may subscribe free at: , mailto:thom@e-comprofits.com

In The News:

Minneapolis Star Tribune
President Ronald Reagan's blood for sale on auction site
Washington Post
An online auction site is hoping to find out by selling a vial that it claims was used to draw President Ronald Reagan's blood as he recovered from the gunshot wound that nearly killed him in 1981. To top it off, the auction site says, â€œdried blood ...
Reagan blood sample vial for sale, controversy includedLos Angeles Times
Auction claims it's selling vial with Reagan's bloodMinneapolis Star Tribune
Reagan's son says auction of vial purportedly containing late president's ...Fox News
The Atlantic
all 760 news articles »

CBS News
Disputed dinosaur fossil auctioned for $1M in NYC
BusinessWeek
By JENNIFER PELTZ A dinosaur dispute is brewing between the Mongolian government and an American auction house, which sold a fossil of a fearsome T. Rex relative despite a court order not to. The 8-foot-tall, 24-foot-long skeleton of a Tyannosaurus ...
Dinosaur Auction: Tyrannosaur Skeleton Fetches $1 Million Despite ObjectionsHuffington Post
Dino fossil sold in controversial auctionWTAM.com
Dinosaur Dustup: Auctioneer, Mongolia Battle Over $1M BonesABC News
Bloomberg
all 303 news articles »

Hamden police auction rids department of old items while adding to town's ...
New Haven Register
By Ann DeMatteo, Register Staff HAMDEN â€” Some chairs and desks, three coat racks, six doors, three telephones, a chalk board and an electric pencil sharpener are no longer town property as a result of an auction held at the old detective bureau ...
NHR: Old Hamden PD Stuff to be Auctioned TuesdayPatch.com

all 3 news articles »

Bloomberg
Treasurys fall as stocks gain; auction on tap
MarketWatch
Last month's auction came at a yield of 0.27%. Yields on shorter-dated securities haven't fallen as much as longer-dated ones in recent weeks because they are more closely connected to interest-rate expectations â€” and the Federal Reserve has given no ...
Treasuries Fall Third Day Before European Summit, Note AuctionsSan Francisco Chronicle
Treasury Auctions Set for This WeekNew York Times
TREASURIES-Prices fall on profit-taking in new debt salesReuters
Bloomberg -BusinessWeek -Investor's Business Daily
all 92 news articles »

Spanish, Dutch Funding Costs Move Opposite At Auctions
Wall Street Journal
By Emese Bartha Spain's borrowing costs rose further at Tuesday's Treasury bill auction, underlying the market's unease with the country's funding sustainability as bank recapitalization needs, frail finances in some of its regions and an upwardly ...

and more »

New York Daily News
Babe Ruth jersey fetches a 'Ruthian' $4.4 million at auction
Chicago Sun-Times
By MIKE FITZPATRICK AP Sports Writer May 21, 2012 9:58AM This undated photo provided by SCP Auctions shows a circa 1920 New York Yankees baseball jersey worn by Babe Ruth that sold for more than $4.4 million at auction, Sunday, May 20, 2012.
Babe Ruth's jersey sold at auction: Piece of Yankees' history has mighty price tagnewjerseynewsroom.com
Babe Ruth's Yankees jersey sells for record-setting $4.4M at auction; Lawrence ...New York Daily News
Babe Ruth jersey sells for a record $4.4 million at auctionFox News
USA TODAY (blog)
all 424 news articles »

Pocklington to auction off Edmonton Oilers' Stanley Cup rings
Edmonton Journal
EDMONTON â€” Peter Pocklington, former owner of the Edmonton Oilers, is once again putting his Stanley Cup rings up for online auction, meaning some deep-pocketed fans get another shot at buying the last remnants of the Oilers' glory days.

and more »

Brazil Central Bank Calls Foreign Exchange Swap Auction
Wall Street Journal
SAO PAULO (Dow Jones)--The Central Bank of Brazil on Tuesday called a foreign exchange swap auction, offering contracts valued at the equivalent of $2.47 billion. The auction offers investors the opportunity to exchange paper linked to interest rates ...
Brazil Rate Futures Yields Rise on Stimulus; Real Extends DropBloomberg

all 9 news articles »

Guitar World Magazine
Beatles' 'Backwards' Abbey Road Photo Fetches Thousands at Auction
Spinner
A photograph of the Beatles walking "backwards" across the Abbey Road pedestrian crosswalk has just sold for Â£16000 (about $25000 US) at auction. The photo shown above was not used for the band's Abbey Road album cover and was therefore unseen by many ...
Backwards Abbey Road Image sells for $25000NBC Bay Area
Rare Photo of The Beatles Walking "Backwards" on Abbey Road Sells for $25000Guitar World Magazine
Crossing with The Beatlesbrand-e.biz

all 30 news articles »

Keno Auctions announces Important American and European Paintings Sale
Art Daily
On June 12, 2012 Keno Auctions will offer an exceptional selection of 74 works by important American and European artists from the 16th through 20th centuries. The sale will take place at Keno Auctions Manhattan office at 127 East 69th Street at 10:00 ...

Google News

Drop Shipping Your Way to Increased Profits

Online Auction