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What is Drop Shipping, The Perfect solution
By: Developer Shed
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    What is Drop Shipping? The Perfect Solution
    by Palyn Peterson

    Drop shipping one of the greatest business innovations since
    products. Seriously, don't laugh! I'm not joking! With
    what other service can you use another company's products,
    their warehouse, their shipping department, and have them
    provide you with all the information you need? Do you see
    what I mean now?

    Every entrepreneur who is looking for the most efficient way
    to sell products over the internet should be very
    enthusiastic about drop shipping. It finally allows you to
    sell nearly anything you want, be it computer equipment,
    toasters, billiard tables, even planter pots, all without
    having any inventory. And do you know what zero inventory
    means? It means less risk! The only time you ever buy any
    products from the wholesaler is when you have already sold
    it to a customer! And the best thing is (or should I say,
    another best thing), the wholesaler packages it up and ships
    it out to the customer for you, and usually your business
    name is on the box! As far as the customer knows, you have
    a warehouse full of products.

    When you sign up with a wholesaler, they will most likely
    ask you for your tax license number, or a faxed/emailed copy
    of it to prove you are a legitimate business. If they don't
    ask you for this, they are either a very small wholesale
    company with a specific niche of products and just want to
    make the process easy for their clients, or they are not a
    real wholesaler at all.

    If you ever come across a "wholesale" company that carries
    tons of items, ranging from Barbie's to hair dryers, and
    they say that you don't need to have a tax license to deal
    with them, then be very skeptical, because 99 to 1, they
    aren't a wholesale company at all.

    That sort of company will just take your order only to turn
    around and order it from the real wholesale company at a
    much lower cost than you paid for it (and they did have to
    get a tax license to do this). It doesn't stop there
    either. Since you bought it at a higher price, you will
    need to pass this on to your customers by marking it up
    higher than you need to. And if you ever needed or wanted
    to, you would have less margin when lowering your prices to
    match or beat your competitors. And your competitors would
    probably have a tax license, so they would be dealing with
    legitimate wholesalers.

    Seriously, be very careful about this, there are many wolves
    in sheep's clothing out there. So skip the middleman, get
    your tax license, get legitimate and you will save yourself
    a lot of grief and money.

    Once you make an account with a wholesaler, some will mail
    you a wholesale catalog and price list in the mail with a CD
    full of product images to use on your website. The smaller
    companies will just allow you to copy the pictures and
    descriptions off their website. With this product
    information, you can post the products to your online store
    and wait for orders. It's as simple as that!

    Then, when a customer places an order, you either call,
    email or fax your contact at the wholesaler and give them
    the customers name, address, and the items they want,
    including any other miscellaneous information the wholesaler
    may want. The wholesaler then charges you for the cost and
    shipping of the order at wholesale price, then packages it
    up and sends it off to the customer. All you have left to
    do is turn back around and charge the customers credit card
    for the items with your profit margin markup.

    The reason this is growing in popularity amongst wholesalers
    is because they get to have many other companies market and
    sell their products, thus reaching more people and selling
    greater volumes. The wholesale company is still able to
    sell their products for the price they want, and you get to
    keep the profit margin as a reseller. It's a win/win

    Drop shipping is enabling the average person to be able to
    run a successful, full service online retail store from the
    comfort of their home. Zero inventory, no shipping
    department, only buy when you have already sold -- this is
    the perfect affiliate program.

    Copyright 2003 by Palyn Peterson

    Sign up for Palyn Peterson's FREE 13 day intensive email
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    DISCLAIMER: The content provided in this article is not warranted or guaranteed by Developer Shed, Inc. The content provided is intended for entertainment and/or educational purposes in order to introduce to the reader key ideas, concepts, and/or product reviews. As such it is incumbent upon the reader to employ real-world tactics for security and implementation of best practices. We are not liable for any negative consequences that may result from implementing any information covered in our articles or tutorials. If this is a hardware review, it is not recommended to open and/or modify your hardware.

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