Dropshipping, for those who are not familiar with it, is a system whereby you sell the products of a particular manufacturer or supplier, accept orders directly, and the manufacturer/source handles all of the inventory and fulfillment process for you personally.
In a nutshell, here is how the drop-ship system works:
==> You generate and accept the order.
==> You keep your profits from the sale price.
==> You transmit the order and the wholesale price to the drop shipper.
==> The source warehouse ships directly to your customer.
The advantages of this arrangement are probably simple: No inventory cost for you.
- Substantially higher profits for you over what most regular affiliate programs allow.
- The ability to quickly set up low-priced, highly targeted, niche or mini-sites to check and promote diverse products.
This method 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 already been using this system to increase profits for many years. If you have ever ordered a high-priced item from a mail-order catalog and been told that the merchandise had been shipped from the factory… you then have experienced drop shipping first hand.
Dropshipping is, I really believe, a virgin un-tapped storehouse of profits for today’s affiliate marketer.
There are online directories that contain essential drop shipper contact information for over 2,000,000 products and 4,000 brands. Most legitimate drop ship sources require you to have a tax reseller number in certain circumstances in order to approve you to market their products and provide you with the wholesale prices that you are interested in.
Beware of dropship sources that require you to pay a fee to become a drop-ship seller… or that require membership. These are usually organizations that make their money selling “drop ship licenses” … and are mostly scams. Legitimate drop shippers and factory sources will never charge you anything other than the actual shipping cost of the goods you sell.
Another caveat… always make sure that you have a written agreement with the drop-shipping supplier that you possess the customer! The warehouse or drop-ship source should commit in writing not to solicit your customers in virtually any form. This is very crucial to you. Your customer list is the most important asset of your dropshipping business. If the factory you are coping with balks at this request… use another source who’ll agree.
Nearly every thinkable kind of product is available from a drop shipper ready to ship products in single units under your business’s name. Choose your interest field… electronics, consumer products, agricultural & industrial products, office equipment & supplies, hobby gear, recreational / shoe, clothing, furniture, etc. The set of available products from drop shippers is almost unlimited.
The product’s original source is invisible to your consumer. The seller (you) will be able to create a database of customers that he/she owns and controls (by agreement with the manufacturer) and has all of the direct marketing advantages that accompany that arrangement… while abolishing the need for maintaining expensive inventory.
This system offers maximum flexibility and cost savings for the seller. If a product will not sell well online you can pull the advertising (web page or mini-site) instantly with very little cost for you outside of the actual time it needed to develop and test the web marketing effort. Or, since this kind of page/mini-site is indeed inexpensive to maintain and host… you can merely leave the pages online and take whatever orders trickle through… when you move to the testing and promotion of new dropshipping products.
The manufacturer benefits from this relationship by obtaining a legion of active sellers promoting their products… at little or no cost (other than those small costs involved with supporting the promoter with online marketing materials like product images, sales materials, etc).
As a seller you need diverse key components in improving 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 stuff like product images (gifs, jpegs, etc.), selling copy, other suitable web graphics, etc.
- A Customer Service Unit that will work with you to develop the very best selling position for you.
If you are a manufacturer willing to expand distribution (or an inventor with a new product ) you will find the desire to dropship in single units will provide you with a strong competitive advantage when you carve out increased market certainly are at little cost.
If you are an online marketer focused on offering high-profit products to your customers (niche market) without experiencing high front-end development or inventory costs… then dropshipping is the best strategy for you.
Internet sellers are well-positioned to take profitable advantage of the dropshipping system and really should give this system a significant look.