Chances are, if you have an online business, you have heard the term - drop shipping or dropshipping. So what is drop shipping and what can it do for you. Drop Shipping is a quite simple process of selling products without the hassle of carrying inventory or shipping the items yourself. It can be mistaken for an affiliate program, but is quite different. This article will tell you all about Drop Shipping.

In a nutshell, affiliate marketing is a referral service in which you use specialized made banners, buttons and website links to attract customers to a specific site. Affiliate programs will then pay you commission for either someone clicking on your specialized link or by a customer making a purchase. You are simple a referral service.

Dropshipping is very different. Dropshipping is for those with their own website and are looking for products to sell on their site. Drop ship programs allow you to sell as little or as many products as you would like without the worry of carrying inventory, hiring help, physically shipping out products or warehouse storage.

Here is a basic guide to starting your own business using drop ship programs.

Starting with your own website, you should begin be deciding what and how much you want to sell. After you have those details worked out, you should begin to search for drop ship partners that carry the inventory you would like to sell. This can be a little hard, but well worth it.

Drop ship programs may charge a monthly or yearly free and some offer their services for free. Free does not always mean better. Weigh the cons and pros before completely dismissing them. Do your homework whether it is a free service or not. Read the contract agreement BEFORE you sign up with a program. All drop ship programs are different and you don’t want to get involved in something that does not suit your needs.

There are certain things you should look for when choosing drop ship programs.

• How long the drop ship program has been around? - be sure they are a reputable company and they are experienced in drop shipping.

• Fees - Make sure to you know exactly what the fees are if any. - You don’t want to get hit with hidden fees later.

• Do they allow you to set your own prices? - This definitely helps, especially when it comes to shipping rates. (We will talk more about shipping later on)

• Do they give you professional product pictures and descriptions to use on your own site? This is extremely important to your business. If you can not supply great pictures for customers to see, they will not want to buy from you. Professionalism is key.

• Do they add your company name when shipping out to customers? This is key in getting return business and more reputable. If they item is being to a person other than the person who bought the item, than seeing YOUR company name is a great way to get a new customer.

• Do they display inventory so that you know what is available for your customers? Nothing will upset a customer more than picking the perfect item to then find out, it is out stock after they have paid for it.

• Provide tracking information to pass along to your customers
Other great benefits that a dropship company may offer, but not mandatory are:
• Allow you to start an affiliate program with their products

• Will add your business cards or other goodies into your shipped packages

• Have special sales for its drop shippers

• They provide thumbnails AND large pictures
Now that you know what drop shipping is, its time to move on to getting it working for you.
You have now established a product line, drop ship partnerships and a website. Let’s put it all together.

You should already have a website built; now let’s add your products. As we established earlier, a good DS company should provide you with professional pictures and descriptions. If you would like to use your own, be sure that grammar, punctuation and spelling is correct. But most importantly be descriptive AND informative. Also be sure that the DS company allows you to write your own description.

Navigating your site should be easy, so group similar products together. Try not to add too many items with large pictures on one page. It can make the page load slowly.

If you were lucky enough to find a program that gives you both thumbnail and large pictures, it’s an advantage. That makes your product pages easier to build and looks more professional. If they do not offer thumbnails AND large pictures, don’t worry. There are plenty of services that can create thumbnails for you. Look into photo gallery software.

Now let’s set the price. If strict pricing doesn’t allow you to set your own pricing, then go ahead and use the prices DS program has already established. If they do allow price changes, this can be beneficial, especially when it comes to shipping.

Cynthia Recommends - I recommend using either one program that already has established pricing OR using ones that allow you to set your own prices, NOT BOTH. It can get very confusing for you.

If the DS program doesn’t allow you to change prices, than chances are they do not allow you to change shipping rates either. As I said before, that is completely OK. However, this is best for those who wish to use this one and only particular DS program. If you choose to use several programs, shipping rates can differ and can become an issue. It’s best to use programs that allow you to set your own prices for this very reason.

Cynthia Recommends - I recommend setting flat shipping rates and adjusting your retail cost based on the shipping rates.

Adjusting pricing is a great way to set flat rates for shipping instead of having a different shipping price for item. If you site allows you to set a different shipping price for every item with minimal effort than go for it. For those who do not have that luxury, here is your solution.

Set flat rates and adjust your retail cost based on shipping fee. For example, you have a bicycle you want sell. Here is how it would break down:

Drop ship/Wholesale Cost - $35.00 (That is the price you would pay for the bike)

Drop Ship Shipping Price is $20.00 (What the drop ship companies charges you to ship the bike to your customer)

MSRP - $50.00 (Manufactured Suggested Retail Price - how much they think YOU should sell the bike for)

If you have a flat fee of $10 shipping for every item shipped through ground shipping, you would then adjust the retail price to $60 (instead of the MSRP of $50) and the shipping can remain at $10. You are still making the same amount of profit with the shipping price at a flat rate.

Why is this beneficial? Customers like when shipping costs are lower.

AND

You do not have to have a different shipping price for EVERY item. Every item that you ship out ground shipping can cost $10, no matter what the drop ship company charges.

Of course you can make the flat shipping rates whatever you choose. You can make it free and add the shipping charge to the retail price. So in the bike example, the bike would cost $70 and free shipping.

Customer Service is another big difference between affiliate programs and using dropshipping services. With affiliate programs, once the customer clicks on your specialized link as is taken to the designated website, your job is done. You do not need to do anything else. Drop shipping requires that you handle your own customer service and payments.

Once a customer orders and makes a payment on your site, it is your responbility to then visit the site of your drop ship supplier to purchase and have the item shipped to the CORRECT address. Here is a diagram explaining the process.

What you offer is what brings them in. Your customer service is what keeps them coming back. So you will be responsible for whatever happens, whether it is your fault or not. That can be the downside to the drop ship business. If they drop the ball, you still need to clean up the mess. That is why it is super important to know who you are dealing with and they are experienced with dropshipping.

So you have the site, the products, the price and the shipping! You are all ready to start making a profit. Here are few extra tips to being the best drop shipper you can be.

Drop ship supply companies are behind the scenes and should not have direct contact with your customer.
There are several reasons for this:

• Your customer may begin to deal directly with the drop shipper (if they retail as well) as opposed to you. This results in lost sales

• Drop ship companies should not represent your company. You should be responsible for your company’s reputation and customer service. A customer will not become a repeat customer if they do not receive proper customer service. Drop ship can assure the customer service you can.

• Customers may feel cheated if they deal with someone other than your company’s employees. Most consumers do not understand online business or drop shipping. DO NOT make the mistake of assuming that customers know the behind the scenes of online businesses. ESPECIALLY drop ship programs.

Offer a variety of products at various price points. This can come from using multiple drop ship programs.

Keep track of which items come from which drop ship company by using their sku codes or items #s. Make a spreadsheet that tells you what item #s and sku numbers belong to each drop ship company.

Keep invoices from your customers and invoices paid to your suppliers. This helps with taxes.

Read up on tax laws. Laws vary upon the state you live in.
99% of legitimate drop shippers require that you have a resale license and will require one in order to sign up. They are required to gather this information, because they are LEGAL drop shippers.

If you would like to see what you are selling, order an item for yourself to see the quality of the product you are putting your name on.

Keep track of the DS inventory to be sure you are not selling what is not available.

Drop Shipping- An Innovative Method to Add Profits from EBay many people are taking up selling on EBay as a means of alternative income. Over the years, Internet has developed into a medium of e-commerce and slowly it is being filled with virtual supermarkets. Today everyone wants a piece of the pie, which is the Internet.

Everyone wants to make quick bucks and get rich overnight. Sounds like right out of a fairy tale. Selling online has become the easiest way to earn money.

Websites like eBay, Yahoo Shopping and many others allow individuals to conduct online auctions and buy and sell products online.

Majority of sellers on eBay comprise of homemakers, college going teenagers, and even people who work fulltime but sell their products during their spare time. All this effort is for getting rich overnight!

The Story Behind
Selling on EBay is getting more popular because the costs involved for setting up your store on EBay are almost negligible.

The initial setup cost for a basic auction is a nominal as 25 cents and includes description and one picture. However, eBay charges a percentage of the final bid price. That is very less for the seller and the seller can charge buyer for this by including it in the shipping and handling fee.

With increasing access to Internet and millions visiting eBay everyday, this becomes the choicest and cheapest way to sell the goods and make a healthy profit.

Drop Shipping- Sell Products without the Hassles.

Since sometime, the term ‘Drop shipping’ has become a popular method for selling goods on eBay.

This method allows the seller on eBay to sell goods without the need to have an inventory or the necessity to ship the goods. Many companies also allow the user to purchase their goods and then have them blind drop ship the product to the winning bidder.

The company uses the eBay seller’s name or company details as the return address to make it appear that the item actually came from them and not the true goods supplier.

The true supplier will however, handle the packaging, the shipping, and any return of items.

Drop shipping has gained popularity because in this method of selling on EBay and other auctions, you do not have to pay for the product upfront until the auction has closed and the buyer has paid.

One the buyer makes the payment, the order is sent to the drop shipper and they would complete the procedure including sending the tracking number for the shipment, which is then forwarded to the buyer.

This method ensures that you earn money and risks are minimized for the sellers.

If you are thinking about starting your own business, the eternal question of where to get your inventory is probably always on your mind. Doing some research about where to get product always leads you to three options. You either buy it from a wholesaler, you import the items or you have another company drop ship it for you. There is one option here that I did not mention and that is you can also make your own inventory. This option is usually not explored in the first portion of building your business.

So if you are debating between the drop shipper and the wholesaler there is a small discussion you need to have with yourself. Obviously you will want to know if the wholesaler you are thinking about using is really a wholesaler instead of a middle man. The next question is the one that most people miss since they are worried about supply. That question is, “does this supplier sell a product that I want to put my name on?”

When you think of your business you want to build a brand and to build authority. If the product line is questionable in regards to quality, is that something you want to be working with? Most people will only give you one chance since there is so much variety to choose from out there. If you get recognized as a seller with lesser quality items, it will be hard to shake that title. Starting right is crucial. Using well known brands is a good way to circumnavigate those problems. Better known brands have already worked through the glitches of design and have engineered most problems out of the product. It’s hard enough to deal with shipping problems, customers who change their minds, customers who are missing “the common sense” gene and the challenges of marketing, without adding brand or product problems. Leaving that problem out of the equation calms the entrepreneurial spirit. The essence of being in business or starting a business is usually uncertainty and it does not make sense to add more problems to think about.

So now when you are thinking about drop shipping, look and see who your competition is for that particular product. Do your competitors buy from this company? Do they appear to move some volume? Do they have good search engine results? If so chances are they are a good vendor. The same goes with wholesalers, check around. Go to forums and ask some questions. People that have had a bad experience are the first to speak out against a company that did them wrong. It’s usually the only way they can get back at them. You can find out a lot of information without revealing the details or your business plan. Just keep in mind the question of “Do I want this company to represent my good name?” I have a saying that I live by, I never let someone else have control of my success. I cannot and will not let another company make or break me. I would much rather go down in flames because of my own doing that allowing some other vendor ruin all my efforts. I think most people would agree.

I talk to a lot of people who are doing business online everyday (no surprise given my industry). Come to think about it, almost every single one of my conversations are with Internet business owners and 90% of them ask me the same question; "Would you please take a look at my website, and give me any ideas on how to improve it?" Besides helping business owners find products to dropship, I own my own business online and have been where these people are. I love to help in every area that I can, or have time for.

I have narrowed down what I think are the top 6 ideas to improving a dropshipping website -

1. Site Structure - Make sure your site loads fast, and that the code is clean. If you built the website yourself, or had someone else build it, did you make sure (you or) they used CSS, and that it validates. When using CSS you make sure that everything on the site is uniform. The font size, style of font, colors used etc. You will lose more customers then you realize by having a site that looks like it was designed by a 6th grader in a computer class. I know you have seen them. Text that is a rainbow of colors. First paragraph green, second paragraph red, next yellow and so on (just repeat any color you can think of and you get the point). Creating a site like this is very unprofessional and you will not be taken serious.

2. Images, graphics and banners - Make sure that you are using the cleanest looking, fastest loading and most optimized images you can. There are several programs out there that will help you optimize your images for the web. You may even have some software on your computer and not even know it. Most programs like Photo Shop, or Paint Shop Pro (even the basic operating system photo programs) have image optimization programs that can help speed up the load time and clarity of the photo. The more images that can help describe the product you are selling, the better. Remember the saying that a picture is worth a thousand words.

3. Site Navigation - If your potential customers can’t browse through your site easily, or feel they are lost, you will lose them 80% of the time from my experience and website analytics tracking. I try to follow the "3 click rule", meaning that it will not take people more then 3 clicks to get to your shopping cart. Also make sure you add an html site map and a universal search engine site map so the search engines can know about the pages you are offering and when they are updated. Doing this will help you have the freshest content from your site on the search engines.

4. Amazing Unique Keyword Rich Content - The more information you can provide the better. People get on search engines to look for what? Information. If you are not providing information that is at the very least better then your competition, then you might as well give up. For example, if you are working with a supplier, and so are 1000 other people, how many of those people do you think are just copy and pasting the product descriptions and not doing anything they can to make it their own using the keywords they want to target? Most of those people are not doing anything to make their content better (from my experience) so even just changing things around a little and making the content better by being more descriptive and using more keywords will put you ahead of the competition 100%.

5. Make Me Feel Safe - If you do not have any kind of SSL certificate, BBL logo, or "hacker safe" logo on your site, then you need to research these out and do whatever you can to get at least one of these added to your site where visitors can clearly see. With all of the talk going on about identity theft people are very weary these days about giving credit card info online. So, anything you can do to help people feel safer on your site (even a little bit) will help increase sales.

6. Contact Info - People are curious by nature, and the thing that runs through my mind more then anything when I am visiting a site is - "Who is the person behind this?" I want to know that I can talk to a human if needed and that someone will be there to actually answer my email or return my call. Make sure you have a phone number where people can contact you, email address and mailing address. When people know they can contact you they feel safer and will be less hesitant to purchase from you.

I have blogged a lot about these topics in the past, but i wanted to do a new post and talk about what I believe are the most important things you can be doing right now to improve how things are going on your website. These are not hard or costly steps, but will take some time and planning. If you get started implementing them now it will pay off in the long run.

With all the hype surrounding dropship wholesale products and using those products to run a successful home business, it’s important to know the following tips which will make your life easier as a home based entrepreneur.

First we’ll describe what dropshipping is and how it can be useful for a home based business. Dropshipping uses three entities: you, the customer, and the dropshipper. You advertise products that the dropshipper offers, and when customers would like to buy the product, they contact your. This can be done through traditional means such as newspaper or the more current trend with mediums such as web sites or auction sites. You never actually purchase the inventory until the customer pays you for it. This gives you the capital to buy the product and take your cut of the profits before the dropshipper. Once the dropshipper receives the order, they ship the product directly to your customer, with your return address listed. The customer thinks you shipped the item and usually has no idea the item was dropshipped.

Now that you have a better understanding of what dropshipping is, the tips below will help you avoid some of the pitfalls that usually occur when using dropshipping in your home based business.

Check the Inventory

You definitely don’t want to sell a product from a dropshipper only to find out the dropshipper doesn’t have the item in stock. This is one of the most common problems in the dropshipping business. Some dropshippers use an available stock field in their product description allowing you to see how many items they have available for immediate delivery.

Careful With Shipping

Most people new to the dropshipping business don’t think much about shipping costs and how it can cut into their profits. Remember your shipping charges and be sure to pass them on the your customer. Some use a flat rate shipping charge that can cover most and provide a small profit when more shipping charges are collected and not used.

Dropshipping Charges

Different dropship companies have different fees for dropshipping. Each individual item may have a dropshipping charge even if the order is for more than one item. Others charge a monthly or annual fee. It’s important to know the fees associated with using each dropshipper.

Saturation

When choosing a dropshipper, you don’t want to choose a dropshipper that has a saturated market. The supply and demand principle is still true even in the online world. If hundreds of people are selling the exact same product as you, you’ll need some sort of incentive for them to buy from you. Or find a niche dropshipper that can provide unique products at good prices.

Beware the middleman

Finding dropshipper that provide the products you want to sell maybe your biggest challenge. There are plenty of middlemen just waiting to soak up all your profits. Most true wholesale dropshippers will require a tax id. They are inexpensive to obtain and can help lead your home based business to success

My name is Kevin and I’m 24 years old. This is the true story of how during the summer of 2001, I made $40,000 selling dropshipped goods on ebay only to lose it all and end up with $4,000 of debt. Read my cautionary tale to prevent yourself from making the same mistakes that I made.

I first found out about dropshipping back in June of 2001 a little after I started a not-so-profitable business on eBay selling cell phone accessories and such. I saw dropshipping as an all profit method of business. You don’t pay for shipping. You don’t pay for inventory. You basically just advertise the product on auction websites such as eBay, take orders, collect the money, and pay the set amount for each item to the dropshipper keeping the remaining amounts for yourself as profits. I now realize that it is only that easy when you’re dealing with the right person.

I first started dropshipping with a guy named Chris. I was selling Nike Air Jordans on eBay. I saw that Jordans are real popular on eBay and people pay huge amounts for them. I’ve seen some pairs go for $1,000+. Chris only charged me $67 a pair. So, I basically just doubled the price and sold them on eBay for $134 a pair. I sold about 20 pairs of shoes within a week giving me a profit of $1,340. I suddenly became happy with the success I had because obtaining over $1,000 in a week at the age of 19 is pretty rare. So, I wanted to start putting up way more auctions so that I could make way more money. Unfortunately, this is when Chris became unreliable. He never returned any of my e-mails and never got back online. Plus, he only had shipped half of the 20 orders I had. So, I decided that I needed a replacement quick before I started to have some unhappy customers on my hands.

This now brought me to dropshipper #2. I talked to the guy about the situation and he said that he would be able to handle it. I paid him for the remaining 10 orders I had left and he shipped the shoes off to my customers. I respected the fact that he picked up right where my previous dropshipper had left off at and took care of business. So, I assumed that this guy was all about business and was a very reliable and legitimate dropshipper. So, I started to put up more buy it now auctions and these shoes were selling faster than I could put them up for auction. This is the unbelievable part. I had sold 250 pairs of shoes in a matter of 4 days. I collected over $40,000 in 4 days. That’s $10,000 a day! This came as an amazement to me especially since I was only 19 at the time. I’ve made some people’s yearly salaries in a matter of only 4 days. Little did I know though that I was in over my head. I got a little too greedy and started to splurge on money that wasn’t even mine yet; buying clothes, shoes, and even put a $1,000 down payment on a new car. My dropshipper shipped my first 30 orders only to find out that he had shipped off nothing but all wrong sizes and wrong colors. So, I had a lot of complaining customers. Some even went straight to PayPal to complain causing PayPal to limit access to my account. So, now I had over $40,000 sitting in my PayPal account that I had absolutely no access to and over 200 orders that need to be shipped off. So, my only option was to refund everyone their money back to get my PayPal account back to regular standing, which brought me to my next dilemma…

I spent almost $4,000 of the $40,000 I thought would be mine to keep. So now, my Paypal balance was negative $4,000 and I needed to come up with that $4,000 quick before PayPal took legal action to get that money. I thought the only way to get me out of this mess was by the same way that got me into this mess. This is what brought me to dropshipper #3.

I stumbled upon a guy named Jarell. I found him through a legitimate business website so I decided to sell enough pairs of Jordans to make up the $4,000 and then I’d call it quits because this was too much for someone so young. Everything went smooth and I was able to make the $4,000 using my girlfriend’s PayPal account. Unfortunately, PayPal then limited access to her account also finding out that she was linked to me. This then aggravated me because now I had 15 orders that I in no way could pay my supplier. If I had shipped to my customers it would bring more complaints and negative feedback which was very bad for business. That was then, this is now.

After reviewing my whole experience with dropshipping in hindsight, I realized all of the mistakes that I had made. For anyone who is looking into working with dropshippers, please pay close attention.

1. Before going into business with someone who is going to be dropshipping merchandise for you, be sure to get to know the person really well. Don’t go by instinct. Have a few converstations with the person before you start anything. Collect all methods of contact of the dropshipper for emergency contact.

2. I suggest that you do not start off having the dropshipper ship the merchandise to your customers. Order some of the merchandise for yourself and examine it thoroughly before you go into business. I started to recieve e-mails from angry customers stating that the Jordans were of terrible quality when I was told by my dropshipper that they were of authentic quality.

3. Don’t bite off more than you can chew. As stated previously, I sold 250 pairs of shoes in 4 days. Within those 4 days, I had to deal with about 600-700 e-mails which is almost impossible for only one person to deal with that also has school to worry about. Patience is the key to success.

These were a few of the mistakes that I made dealing with dropshipping. I had a price to pay for my mistakes. I owed $4,000 to PayPal and I had a $2,000 eBay bill that I ended up working during the summer to pay off. My purpose in writing this is for everyone considering going into business with a dropshipper to take precautions and use the tips I provided. I would also like to say that even though I had a bad experience dealing with dropshipping, that is not always the case. I know there are some people who have become successful and wealthy off of dropshipping.

Five years have passed since I began my journey in this industry. I finally did pay off all of my debts that summer and have made it my mission to educate and inform people of the scammers out there waiting to ambush the inexperienced and naive. I wrote this article because I don’t want anyone else to go through the experience that I did. There were times where I felt hopeless and bitter for falling into a trap that left me feeling depressed. Needless to say, I have learned from my soul-crushing mistakes and now make a decent living selling on ebay.