Have you been thinking of starting your own online business but felt the prospect of amassing large amounts of inventories would cost too much money?
The truth is that you really do not need to buy any inventory in order to sell products over the internet. That’s right – no upfront inventory cost.
Wholesale Drop Shipping
You may or may not have heard this term before. In the retail and wholesale industries, it refers to a shipment of product that leaves the manufacturer’s (or seller’s) warehouse and is sent directly to a customer rather than going through a middle man to receive it. The middle man will make money on every sale despite not having to touch inventory.
Wholesale Drop Shipping has long been in practice in many retail or wholesale business ventures. In the world of traditional bricks-and-mortar stores, it was ordinarily used as a way to speedily complete a customer’s special order.
If a person came in to a hardware store, for instance, and didn’t like any of the hammers on display, he or she could place an order for a special hammer. The store, rather than get the product in and then call the customer to pick it up, could simply ask for upfront payment and have it shipped directly to the customer’s home.
How It Works In Ecommerce
This same principle applies in modern, ecommerce enterprises that sell products over the internet. As the business owner, you set up an account with a company that can supply items you offer for sale. You earn a commission based on the sale happening. Many wholesalers offer you an affiliate code so that they can track sales back to your account.
Getting Started
The first step is figuring out what you want to sell. Do an internet search to find larger companies that can offer Wholesale Drop Shipping accounts.
The important thing to remember about selecting suppliers is that they need to be reliable, and offer terms of sale that are advantageous to you.
Next, set up your ecommerce site. A lot of people use eBay as their virtual storefront or reserve a space at another community-type site. You can also choose to start your own website or sign up for a site already made to plug in to a wholesaler site.
Whatever way you to choose to start up your ecommerce venture, know that it does not take a lot of money. Wholesale Drop Shipping makes the opportunity to build your own business a reality even if you don’t want to buy inventory or the space to warehouse it.
Have a most outstanding day.
Sean RasmussenAussie Internet Marketing
www.AussieSEO.com 2010
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{ 36 comments… read them below or add one }
Hi Sean,
Wholesale drop shipping is something that interests me. There is just so many ways to make money online. I feel like I have my hands full at the moment.
I want to be a successful internet marketer. I just feel like I need to master one money making technique before I move on to another. Is this the right approach or should I be trying different things to see what works for me? And then focusing on the things that work?
Jazz Salinger´s last blog ..Learn and Earn Competition – This is It
Hi Jazz
With drop shipping the critical aspect is having the reliability of supply as you have no control over it. It is even more essential if you are using a company in a different location to where you are.
Gee Hollings´s last blog ..Are Keyword Research Services Really Worth It
Hi Gee,
I’m not sure I trust myself to choose the right company to deal with. It’s also something I feel I would need to give my full attention to and right now I just don’t have the time.
Still it is something I will explore further in the future. Have you tried drop shipping, Gee?
Jazz Salinger´s last blog ..Finding Your Passion
Yes Jazz I have.
In my early days of internet marketing drop shipping and Ebay where suggested to me. I’ve got to say it’s not my best experience in the online world.
I was let down over supply pretty badly with drop shipping. However there are large companies that list products from a variety of vendors at a cost of course. I didn’t go down this road due to cash flow at the time.
Gee Hollings´s last blog ..Are Keyword Research Services Really Worth It
I suspect you are correct on both points Jazz. Focus and mastering one technique is right, but than we shouldn’t put all our eggs in the one basket.
Multiple streams of income are better – for all sorts of reasons – market fluctuations not being the least of them.
Hi Peter,
Yes, you’re right; we shouldn’t put all our eggs in one basket. It’s just that I’m still struggling to be successful. I’m worried if I try too many other things, I’ll never be successful with any of them.
I’m hoping that by focusing on one thing; I’ll be more likely to make that successful.
Jazz Salinger´s last blog ..Finding Your Passion
Yes, that is a danger Jazz. Too many and focus loses out. I think one answer is to have a main focus and also be slowly developing others, but not at the same pace or level of commitment until the first is well and truly established.
For example if you are focusing on a particular niche, you could also be doing part-time some article marketing to build up traffic and a list – which could either serve the main focus and or be developing your name in another area.
Jazz, I meant to say in that reply, you could say do drop shipping as a main focus, but also be developing a website etc to promote e.g. clickbank products, or a coaching course. The latter can be quite lucrative if it meets needs within a niche which isn’t well served. The Drop shipping can give some immediate income to fund the other etc.
Hi Sean
I like the idea of Drop Shipping and is something I think about doing, once I find a product.
My concern would be not having any control over the product and having to rely on a company to fulfill the promises that I make to my customer.
However, I would thoroughly research the company and look for customer feedback and delivery performance etc before I made a decision. It’s a bit like buying real estate or a business. I would have a check list and go out and do my due diligence.
Elly´s last blog ..
Hello Elly,
I have looked at Drop Shipping and have even contacted a drop shipper, but like you said I was concerned about not having control of the product. I did a bit more research on the company and they had trouble with keeping up with supplies and too much demand.
I guess because I am a perfectionist I get concerned about the quality of the product/time its delievered in plus many other aspects……but I guess if I found a product that I trusted and a company that was realiable then all systems go
Its something to sure think about.
Cheers
Lisa
lisa wood´s last blog ..Follow Your Heart
In the past I’ve looked at a couple companies that were drop shippers. However, I’ve never taken the time to research them in depth and make a commitment to trying to sell product available through them. “Wholesale Drop Shipping” is another avenue that I’ll have to investigate more fully.
Don White´s last blog ..You Cant Throw That Out-
Hi Don
I have been down the wholesale drop shipping road.
I did all the due diligence on the company and it all checked out. On my first sale it all went smoothly and every one has happy. Great I thought. However then the problems started.
A whole series of out of stock and no longer available issues. Thankfully I was able to advertise for no cost.
Having said that there are large companies that act as hubs such as Doba.com that are worth looking into. In my case it was with an individual company.
Gee Hollings´s last blog ..Are Keyword Research Services Really Worth It
How dependent on traffic and having a list are you with drop shipping? With affiliate marketing traffic and a list is vital.
Peter
The requirements will be the same no matter what avenues are being used.
Gee Hollings´s last blog ..Are Keyword Research Services Really Worth It
I’ve been practicing the art of Wholesale Drop Shipping for years – first with Regal Greetings in Canada and now all of North America through my new company. I do find, however, that in today’s economy the sales have slowed a bit but I’m still putting copious amounts of effort into making it the best site I can.
I still think information through ebooks is more popular, especially the ones that help you decide if working from home is right for you. So many people think they want to do it and when the opportunity arises they do nothing about it.
This year, these next couple of months, I’m all about setting myself up for full time income from home.
Sarah Butland´s last blog ..Asking the Universe
Hi Sarah
It’s great to find someone that has been successful at drop shipping.
My experience is the opposite.
Any tips you would like to pass on?
Gee Hollings´s last blog ..Are Keyword Research Services Really Worth It
I too would be interested in learning of your postive input on drop shipping. What is your website? How do you get traffic etc
Sorry Peter, I didn’t include my website. It’s available for shipping to Canadian and American addresses and it’s http://www.ItsRainingGifts.com.
I get traffic through a previously established list, affiliates, newsletters, refer a friend options, etc. The only trouble I have is keeping up with the thousands of products we have available.
Sarah Butland´s last blog ..A House of Straw
Customer service – respond to all inquiries like they will be the customer who makes you a million dollars year after year.
But the main ingredient – find a great company to work for. We spent many years and many agonizing hours dealing with one company and, even though we were our countries best seller of their items, realized the money wasn’t worth the hassle. You need to find a company you trust to provide good products , reliable shipping and see you as a person. If they are not willing to work with you why should you work for them?
When we found the new company to work for our potential doubled immediately as we were able to sell to Canada and the USA whereas the original company allowed only sales within Canada.
Research – keep looking for a company to work with, order a couple of their products to test delivery and quality and go from there.
Hope this helps.
Sarah Butland´s last blog ..Asking the Universe
That’s helpful information on Drop Shipping Sarah.
It seesm the companies reliability to have enough stock etc is a key component or you get stuck.
Can you recommend any companies to check?
As we’ve dealt with this same company for a couple of years I wouldn’t know how to start looking all over again. I can tell you not to work with Regal Greetings and Gifts but other than that I would now consider myself new to the researching drop shipping scene.
Have you looked at http://www.dropshipaustralia.com.au/ or http://www.australiawholesalers.com/?
I do recommend looking into something local to you first. That way you’re familiar with the areas you can get the items drop shipped to and you can order whatever you need yourself. Order something for yourself when you immediately sign up so you can be your first customer and be able to know how they are to deal with.
Sarah Butland´s last blog ..Asking the Universe
This is replying to your comment of the 6th Sarah as there was no reply button under it.
Thanks for the information on drop shipping. I will certainly look into it for locals.
I did read somewhere that drop shipping isn’t that well received here Down Under, but that needs more research on my part to confirm or not.
BTW – do you need a list – or how do you get customers? The usual traffic generation thing?
Because I started with a company that was already well known in my country customers simply “googled” the company name and we were the number one site found (above the company themselves). When we parted ways from this company we brought our customer base with us.
It has, mind you, been difficult to grow our customer base as there’s a lot of competition for “gifts” and as it’s not a blog site it is a challenge to use the keyword in a needed sense.
Sarah Butland´s last blog ..So Absolutely Thrilled I’m Shaking-
Hello Sean,
I feel for me that Drop Shipping is not suitable….unless I knew that the product is top quality and that available for the customers.
It sounds like a great way to start a business with, because Drop Shipping requires no outlay….but unless I was convinced that with 100% success – that customers were going to receive the product and in a timely manner….. I know that I could not be passionate about the business.
I guess Drop Shipping works for some, and not for others. Sure is a great one to look into.
Cheers
Lisa
lisa wood´s last blog ..Follow Your Heart
The best way to figure out what you’re getting into is either finding a representative for that company or ordering a small amount of items for yourself. That way you can see for yourself what the product quality is, what their customer service is like and the time it takes for delivery.
I’ve dealt with two entirely different drop shipping companies and had horrible experience with one but am having tremendous experience with the other.
Sarah Butland´s last blog ..A House of Straw
Hi Sean,
I like the idea of selling by Wholesale Drop Shipping. Are the principles similar to Affiliate Marketing or is the structure very different?
Jill Brown´s last blog ..Couples Marry at Common Law
Sean may think differently but as a dabbler in both I have found them to be very similar. You want to ensure you’re offering a good product, on time while maintaining your own integrity and customer service levels.
Whether it’s a physical or virtual product the results should be the same – smooth process, spectacular delivery and fantastic product.
Sarah Butland´s last blog ..So Absolutely Thrilled I’m Shaking-
What you say applies to both for sure Sarah. I am still intrigued by the concept of drop shipping – and noted down to check on those links you provided above.
I still would like to know – is it dependent on first building a list? That is a base key for success with affiliate marketing, and that’s what my problem is – a wee little list.
Building a list would be one way Peter. There are many other ways to sell products, like organic rankings, PPC and Ebay for example. There are lots of ways to skin a cat
Thanks Sean – perhaps I am being obtuse or just plain thick. I think I mean free traffic generation – which includes SEO, social media promotion etc – is this what you mean by organic?
PPC – yes, but costly. Ebay – again how does this generate the traffic?
I don’t believe you need the list before you have your product. Finding the company you want to deal with for drop shipping should come before you start taking names as the names you take now may not be appropriate for what you decide to sell later.
Find your products, test the company, build the site and then your list (in my opinion). Best of luck.
If you do want to concentrate on selling in the US let me know and I can set you up as a drop shipper for my company.
Sarah Butland´s last blog ..A House of Straw
Sarah, I am very interested. I had thought about drop shipping before this comp, but was uncertain bout going it alone – sight unseen type of thing. What is the best way to work with you?
Very similar setup to affiliate marketing really Jill. The same basic principles apply.. you are selling someone elses product and you make commissions on sales. You can market the product in similar ways to marketing affiliate products. It’s important to find a reliable merchant that will actually keep the buyer happy by dispatching the goods on time etc.
I guess Wholesale Drop Shipping would have to be easier and less expensive than you having to have products in storage, and either way the customer is the one paying for shipping, so it looks to me to be a win win situation.
Finding a reliable merchant would be the first thing to do before marketing any products
Absolutely drop shipping is the best way to get into a business that’s almost hands-off. We started our experience with getting items to us and then having to personally ship it. The benefit? We could include our own personalized letters etc but it took up all of our time.
Now it’s a matter of spending an hour or so to place the orders, answer emails and collect money. Drop shipping is definitely the way to start off and keep your house clear of product.
Sarah Butland´s last blog ..A House of Straw
By organic, I mean free traffic via organic search results (ie: non paid search engine rankings). As for Ebay, it generates its own traffic, if you have products for sale on there, you will get buyers looking at your product. I only mentioned Ebay as this is one of the places many people use for drop shipping products, it’s not something I use personally.