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Drop Shipping Basics For Beginners

Sep 1, 2008
Drop Shipping is a term used when products are generated through a particular method. The products itself generate at a low wholesale price due to increase from manufacturer, to distributor, to retailer, and ends at customer purchases. Retailers buy at a low wholesale price and highly increase their profits. Business and Individual Retailers sell products to end users(customers) without running a huge inventory. The distributor takes care of all the inventory work.

So you've decided drop shipping could be your next work-at-home opportunity or side-job, great choice! Especially during this time around. Research Analysts predict-- online sales by holiday season to reach $22 billion, a 19 percent increase from last year. 73 million holiday purchases were made online last year. 86 million online purchases are expected to come this year climbing up to 18 percent from last year. Drop shipping is global business. Imagine the years to come. An ideal product to sell during holiday season is electronics. Start-up costs for drop shipping is very little and you don't need much money to invest.

A big mistake new beginners regret when drop shipping is selling a product and seeing weak results. The best sellers always do research.

You should ask yourself, is this something people want or need? If yes to both, then the chances of selling it will succeed. Any type of product people buy can be found and bought online. People buy things online because they can contemplate between prices easily. When selling a product, keeping the price lower than the outside world brings great results. This makes drop shipping affective.

Selling a "hot product" during its highest peak is not a good idea. Entering a niche when it is packed with sellers who sell the same product make it harder to sell. Go into a moderate niche because few competition is better than too much or no competition at all.

Don't be discouraged too easily in your first try. Maybe you need to configure the products or revise your descriptions. You're probably selling a product that has potential but maybe selling it more expensively than fellow competitors. This indicates that it would be a wise decision to lower your price in that marketplace. So research the competition and profitability within the marketplace. You'll always have the option to configure your products by upgrading, trading or switch to other products.

Before investing on too many products at once, test a few products in the marketplace to determine weather you'll try to sell more of it afterwards.

Here are simple steps involved in drop shipping:

1) In order to buy products at wholesale price, you must get a Wholesale License or provide Proper Documentation. A Wholesale License can be obtained by visiting your state Department of Revenue to maintain a sales tax account.

2) Open an account in a marketplace or auction to sell your products. You can start with Ebay, Amazon and much more. When you reach a comfort level, you can develop an online store and promote products. You can eithier hire a web designer or create your own website using web design softwares like Macromedia Dreamweaver, Microsoft Frontpage, Adobe Go Live, etc. Many online services like http://Ruzbiz.com allow you the tools to create powerful web stores.

3) Find a distributor in order to Drop Ship the products you want to sell. Research the products they offer and start promoting. You can get products for very cheap from online-international-suppliers like Alibaba, Ecplaza, Rusbiz, Trade-India and much more. For North American manufactured products, the best source is Thomas register.

4) When customers buy your products, confirm the orders to your distributor and everything is set. Enjoy more leisure time once your promotion does its job as you watch your profits grow.
About the Author
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