Drop Ship Fortune | How To Make a Fortune Drop Shipping

How To Make A Fortune Drop Shipping

By J. Stephen Pope

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Table of Contents

Chapter 1Drop Ship Your Way to Wealth

Page 8

Chapter 2Drop Shipping Increases Profits

Page 13

Chapter 3Top 7 Dropshipper Advantages

Page 16

Chapter 4Top 7 Dropshipper Disadvantages

Page 18

Appendix A What Is Drop Shipping?

Page 20

Appendix BYou Can Make Money As A Dropshipper

Page 29

Earn Money Rebrand This Report! Page 32



Chapter 1

Drop Ship Your Way to Wealth

Your customer sees a marvelous array of products on your website. After thoughtful consideration, she purchases the product she wants. Amazingly, you have never actually seen the product. That is because your supplier shipped the order directly to her.

1. Problems With Stocking Inventory

After deciding what products you will sell, you are immediately faced with many challenges.

First: “To stock my products, will I need to rent store or warehouse space? I was hoping to sell by Internet, mail order,or export, but I don’t have much storage space for inventory at home.”

Second: “Will the supplier even deal with me if I don’t have aretail location? I was counting on keeping my overhead downby operating from home.”



Third: “I know that many manufacturers and distributors havea minimum order, sometimes in the thousands of dollars. I don’t have that kind of money!”

Fourth: “Even if I did have the money, why should I tie it up in inventory? How do I know if the product will even sell?”

Fifth: “I guess I will have to add extra insurance coverage for my inventory. Maybe I better upgrade my security system while I’m at it.”

Sixth: “The shipping charges are going to kill me. First, I have to pay to get the goods here (freight-in). Then, I have to pay to ship the goods out to my customers (freight-out).”

Seventh: “If I expand and hire employees, how will I control the inventory? How will I know if my employees are stealing from me?”

Eighth: “How much time and money am I going to spend packaging and fulfilling orders?”

These problems can be reduced or eliminated by drop

shipping.



2. Drop Shipping to the Rescue

Drop shipping is a method of selling products without stocking inventory yourself. You don’t need to stock inventory, because you only order an item when a customer requests it.

With drop shipping, when you make a sale you contact the manufacturer or authorized distributor and make arrangements to pay for the order at your wholesale cost. Your distributor then ships the product to the customer with your invoice and shipping label.

For example, let’s assume that you have just sold a product to a customer for $100.00 plus shipping charges of $15.00. Having received the customer’s payment, you now need to fax or otherwise send your order to your drop ship supplier. You will need to pay your supplier, by credit card or other means, your cost of $50.00 plus $15.00 shipping. This leaves you a $50.00 gross profit. Your supplier will now ship the product to your customer.

With this arrangement of not having to stock inventory yourself, there are many advantages.



You eliminate the high costs of holding inventory. There is noneed for you to rent expensive storage space, finance high minimum orders, get stuck with goods that don’t sell, or pay other expenses associated with maintaining inventory.

Indirectly, you do pay inventory costs. Your drop ship supplier must maintain his inventory and pay all associated costs, including freight-in, storage space, insurance, accounting, shrinkage, and so on. To make a profit, he must pass these costs on to you.

The real advantage to this drop shipping arrangement lies in keeping your costs variable. Instead of being stuck with these expenses up front, whether you sell or not, you pay only whenyou make a sale.

3. Profit From Drop Shipping

Many legitimate drop ship suppliers may not require you to have a retail location, but they will want to see evidence that you are in business. They may require you to produce a resalelicense or retail sales tax permit.

To be sure, there are pitfalls to watch out for in drop shipping.



For example, some suppliers claim to sell at wholesale prices but are actually selling closer to retail. Also, margins are very slim in some competitive areas, such as electronics. However,with proper research and information, you should be able to avoid these problems.

Whether from your home, retail store, directly from your website or through an online auction, you can arrange to sell an item before you purchase it. That way you have nothing invested in inventory and won’t get stuck with stock that won’t sell.

Rather than financing and stocking inventory yourself, consider drop shipping your way to wealth.



Chapter 2

Drop Shipping Increases Profits

You would like to increase your income by selling other peoples’ products but you just don’t have the money to stock inventory.

On the other hand, perhaps you have lots of your own productand would like to increase your sales, but you don’t have a lotof money for advertising.

The solution to both problems may lie in drop shipping.

1. Sell Products You Don’t Own

You would like to sell a variety of products but you don’t have very much money. Don’t worry! Your customers will supply you with the necessary capital. You don’t have to stockinventory. You can drop ship orders.

For example, you receive a credit card order for a product



retailing for one hundred dollars plus five dollars shipping. You now turn around and fax (or e-mail or phone) your order to your dropship supplier. You pay the fifty dollar wholesale product cost plus five dollars shipping using your own credit card.

Your dropship supplier now ships the order to your customer. With no investment in inventory, your gross profit equals fiftydollars.

2. Sell Products You Do Own

Would you like more sales of your own products? Consider drop shipping your products for other dealers.

As an example, you may have a product that sells for one hundred dollars plus shipping. Every time you sell that product yourself, you will have a sale of one hundred dollars. However, how many one hundred dollar sales can you make personally?

Now consider the situation where you offer your dealers a wholesale price of fifty dollars. You could have hundreds or thousands of persons selling for you.



It is true that each product sale now only brings you only fiftydollars in sales. However, these are sales that you wouldn’t otherwise have. What would it cost you to obtain these sales through traditional advertising channels? Would your advertising even bring you the desired results?

Keep in mind that with this drop shipping arrangement, you pay only for results. When a dealer retails your product for one hundred dollars, he is really receiving a fifty dollar profit for selling your product; you could view it as a sales commission. You receive only fifty dollars per product sale but sell way more than without drop shipping. You ship directly to the customer for your dealer.

So, whether you sell other peoples’ products or your own, drop shipping can increase your sales, preserve capital, and maximize business profits.



Chapter 3

Top 7 Dropshipper Advantages

Here are seven reasons you should consider being a dropshipper.

1. Low Capital Requirement: Instead of paying to stock inventory, your customer finances the order. For example, if an item costs fifty dollars from your dropship supplier, you might charge your customer one hundred dollars for the product plus applicable shipping charges. When you receive payment from your customer, you will then send fifty dollars plus shipping charges to your dropship supplier. You have justmade fifty dollars gross profit entirely financed by your customer.

2. No Inventory Required: You will not need to worry abouthow to finance high minimum orders of wholesale

merchandise, getting stuck with stock that won’t sell. or extra costs for warehouse space, insurance, shrinkage, and so on.

3. Expanded Product Line: In addition to your own products



and services, you may increase your sales and profits by selling other people’s products.

4. No Product Fulfillment: Your dropship supplier picks, packages and ships the orders to the customer.

5. Keep Expenses Variable: Instead of having a high fixed overhead, more of your costs will be variable. You don’t pay for inventory, for example, until you have a sale.

6. No Minimum Order Requirements: Dropship as little as one item.

7. Increase Sales of Your Own Products: On the other side of the coin, have you considered the advantages of drop shipping your own products? In return for giving your dealersa wholesale price, you may sell significantly more product than you could on your own. You would have to ship the products on behalf of your drop shipping dealers.



Chapter 4

Top 7 Dropshipper Disadvantages

Don’t get me wrong; I love drop shipping too! However, I would be remiss in my duty if I didn’t tell you about the pitfalls as well as the advantages of being a dropshipper. Here, then, are seven disadvantages of drop shipping.

1. Merchant Account Violation: The terms of your Internet merchant account require that you not charge your customer until the order has been shipped. Your dropship supplier might take a few days to get your order out.

2. Inadequate Product Knowledge: Since you’ve never even seen the products you sell, how will you be able to answer customer questions about the product? Sometimes youcan obtain sales literature or samples from your supplier to assist you in your product knowledge.

3. Increased Customer Support: When customers request information about a product, you will have to phone the supplier for product data and then contact the customer with



the information. This can be very time consuming.

4. Responsible for Dropshipper’s Actions: If your dropship supplier runs out of inventory, sends the wrong item, is slow in fulfilling the order, or experiences similar problems, you are the one who is responsible. You are the one that will have to apologize and straighten matters out with the customer.

5. Increased Competition: If you are not the exclusive source of the product, others can and will sell the same product from your dropship supplier.

6. Dropship Supplier Scams: Some suppliers claim to sell atwholesale prices but actually sell to you much closer to retail. Sometimes shipping and handling charges extracted are exorbitant. This, of course, leaves very little, if any, profit margin for you.

7. Loss of Control: If you maintain your own inventory, you have much more control over how quickly and securely your inventory is shipped.



APPENDIX A:

What Is Drop Shipping?

By Chris Malta To understand Drop Shipping, we should first understand product distribution.

People have been distributing products since before the first mastodon skinner traded a fur coat for a flint axe.

Here’s how it works.

Let’s say ABC Manufacturers makes a product called Mom’s Ankle Wax. We’ll say that Mom’s Ankle Wax has been



around for years. It’s a very well known brand name product. It will without a doubt give you the shiniest ankles on your block, and everybody wants some.

ABC Manufacturers makes Mom’s Ankle Wax, but they don’tsell it directly to the public. They’re a manufacturing operation. They’re far too busy melting paraffin and waxing test ankles to go around building stores all over the place. They need distributors; companies who will take their productand distribute it to the places that will sell it.

For years, ABC Manufacturers has sold Mom’s Ankle Wax to a company called DEF Distributors. The founder of DEF Distributors knew Mom herself, back in the old days when she made her Ankle Wax by hand, out in the turkey barn.

Today, DEF Distributors buys Mom’s Ankle Wax by the truckload. They pay $5.00 a case for it, which is a very good price. It’s such a good price, it has it’s own name: the Manufacturer’s Wholesale Price.

However, DEF Distributors does not sell it to the general public either. They are a distributor. They distribute Mom’s Ankle Wax.



DEF Distributors works with a chain of retail stores called Wax R Us. This place was founded by a retail business visionary who saw the incredible potential of Mom’s Ankle Wax a long time ago. Today there are Wax R Us retail stores on every street corner in every major city in the country. Wax R Us buys truckloads of Mom’s Ankle Wax from DEF Distributors for $10.00 a case.

So, DEF Distributors makes $5.00 on every case of Mom’s Ankle Wax they sell to Wax R Us retail stores. This makes DEF Distributors very happy.

Cases and cases of Mom’s Ankle Wax arrive in the stockrooms of Wax R Us stores everywhere. The Wax R Us employees open those cases, and pull 12 cans of Mom’s Ankle Wax out of each case. With their pricing guns, they stick a price of $4.50 on each and every can.

Wax R Us stores make a total of $44.00 on each case of Mom’s Ankle Wax. (12 cans x 4.50 per can = 54.00, minus the 10.00 they paid for the case = 44.00).

Wax R Us is even happier than DEF Distributors.

However, the happiest people of all are the people who can



stroll into Wax R Us and purchase a can of Mom’s Ankle Waxfor only $4.50. They think this is a great price, and they’re walking around with the shiniest ankles in town.

Well, that’s it -basic product distribution. The manufacturer sells to the distributor, the distributor sells to the retailer, and the retailer sells to the end user (the customer). The manufacturer, the distributor and the retailer all make money because the customer is willing to spend money for the product.

Drop Shipping has been around for a long time, too. Probablyas long as mail order catalogs; maybe longer. If you want to use a buzzword to impress a corporate type, call it “second party addressing”.

Above, we talked about the manufacturer-distributor-retailer relationship. When you use drop shipping to sell products on the Internet, (or anywhere else), YOU become the RETAILER in that relationship.

For our purposes, there are two kinds of retailer. There is the retailer who stocks products, and there is the stockless retailer. Drop Shipping means that you become a stockless retailer.



Retailers who stock products

Let’s imagine that you want to open a retail store on the Internet. You have to have products to sell, right? Let’s also imagine that you like to suffer. Mental anguish is your favorite pastime. You aspire to financial ruin. In that case, youwill want to stock products for your Internet retail store.

To stock products for your store, you will have to rent warehouse space, or at least clean out your garage. You will have to have to pay for a shipping account with UPS or FedEx, unless you want to saddle up and trot down to the postoffice every day. Worst of all, you will have to pay for those products up front.

Yes, that’s right. Money. Probably lots of it. For example, if you want to sell Mattel Toys, you can contact Mattel and they will be happy to set you up as a retailer. I know -I’ve talked tothem. We had a nice conversation about setting up an account,placing orders, and all the other wonderful things business persons discuss with each other when beginning a relationship. Toward the end of our conversation, this nice woman said to me, in an offhand manner, “By the way, your minimum first order must be at least $100,000.” That’s One Hundred Thousand Dollars, folks.



I nearly choked on my bagel. Needless to say, I do not stock Mattel products. Or anyone else’s, for that matter.

Stocking products costs money, that’s the bottom line. No matter what you sell, if you carry stock, you pay first, and then hope you sell later. If you don’t sell the products you buy, there are going to be some very happy people at your next garage sale, and your bank will be sending you an amazing amount of undesirable mail.

There’s a much better way.

Stockless Retailers (Drop Shipping)

It should be noted here, if only to keep the Punctuation Policehappy, that if you use the method of drop shipping in your business, YOU are not the “drop shipper”. The company(s) who supply the products to your customers for you is the dropshipper. YOU become a “Stockless Retailer”.

Here’s how drop shipping works.

1.) You open an Internet Store, with a shopping cart and the



ability to accept credit cards.

2.) You find a distributor who is willing to drop ship the products you want to sell. The best place on the Internet for this is www.DropShipSource.com. The Drop Ship Source Directory is recognized as the best source for legitimate wholesale drop shippers on the Internet.

3.) You establish an account as a retailer with the distributor you choose.

4.) You receive images and descriptions of the products you want to sell from the distributor, and post them on your Internet Store.

5.) A customer surfs into your Internet Store, and falls in love ith a product that you have priced at, say, $80. They purchase the item with their credit card. Your Store charges their credit card $80 plus your shipping fee.

6.) You turn around and email the order to your distributor, along with the customer’s name and address.

7.) The distributor sends the product directly to your




customer, with YOUR Store’s name on the package.

8.) The distributor charges you the wholesale price of, say, $45.00, plus shipping.

9.) Your customer gets a cool product from your store shippedto their door, and they tell all their friends about you, and you make even more money.

There you have it. You just made a $35.00 profit on one item. You didn’t have to buy a whole bunch of the product and keepit in your warehouse, hoping you would sell it. You didn’t have to pay to have it shipped to you, and then pay to ship it to your customer. All you did was send an email to your distributor.

That’s the drop shipping process in a nutshell, and we’ve placed information in the Drop Ship Source Directory about everything from setting up your store to accepting credit cards.

Author Bio

Chris Malta is the founder and CEO of Worldwide Brands,




the Internet’s leading authorities on Product Sourcing for Home E-Biz, and the publishers of OneSource, the World’s largest Source of eCommerce Wholesalers. Chris spent many years as a Microsoft Certified Systems Engineer, designing and building corporate and eCommerce server platforms, working for several large companies, and managing major installations for Fortune 100 businesses. With over thirty years experience in wholesale, retail, and entrepreneurial ventures, Chris was hand-picked by eBay Radio as their exclusive Product Sourcing Editor, and is responsible for managing the eBay Radio Resource Center. He co-writes and hosts Product Sourcing Radio, one of the top rated shows in the wsRadio Business Network, and has authored numerous books on E-Biz and product sourcing, including “What to Sellon eBay and Where to Get It,” published by McGraw-Hill.



APPENDIX B:

You Can Make Money As A Dropshipper

The distribution of products has been around for a verylong time. When a product is created it needs a distributor to get it to the stores that will sell it. A manufacturing company creates a new product, sells itto wholesale distributors, and the distributors then sellthe product to the retail stores that will sell it. Each company makes a profit of their own. Otherwise, none would be in business.

However, what if we were to take out the distributor and the stores? You would then essentially become the dropshipper, selling products to the public via the Internet straight from themanufacturer.

Why Become a Dropshipper?

There are so many benefits to becoming a dropshipper. Here are a few of the benefits you will have as a dropshipper:

1.You will have no inventory to store.2.You do not have to ship the products sold.



3.You create the markup, which determines the profits you will receive.

The only things you need to become a successful dropshipper are an entrepreneurial spirit, a good business sense, ability to research a good dropship supplier, set up Internet stores, and market your products as well as you can.

Dropshipper Hazards

1.Finding a bad dropship supplier. Research your dropship supplier before you decide to do business with them. Check them out as much as you can before you make your decision.

2.Ask for tracking numbers when an item is shipped. If they can’t provide them, it might be better to choose another dropship supplier.

3.Ask a potential dropship supplier how long their estimated delivery times are. Customers will want to know how long it will take for them to receive their order.

4.You shouldn’t have to pay a fee to access a dropship supplier’s product line.

You can make a successful business out of dropshipping



online. You can create more than one website, and work with more than one dropship supplier to optimize your results. There are probably more businesses and websites online that you have visited and didn’t even know that the owner was using a dropshipper.

You choose the products from the dropshipper’s product line that you want to sell, set up a website, market your products, and start selling. It can be that simple. The best places to start selling are Ebay and Yahoo Merchant Stores. However, you should also create your own websites that showcase your products and allow people to purchase them there as well.

Ebay and Yahoo will help you a lot with marketing if you use their website stores to their greatest advantage. Utilize keyword-targeted articles for your websites so the right people can find you easily.

The best part about being a dropshipper is that you can sell products that you are passionate about, and make money! Youwill be more happy with your businesses if you are selling something that you truly care about, and that passion will show through to your customers.



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