Web
Gatorz.com is a premium source for High quality Low
cost HTML website template customization service.
We have an extensive collection of web templates
(8000+).
Thank
you very much for the work that
you have done on our website. We
are very pleased that we now have
a very professional looking website
at a very reasonable cost. I also
liked the way you worked as you
were very responsive and friendly
in all your dealings with us.
Mike
Higgins
Partner
Fusion
Corporate Finance
Independent
Corporate Finance Advice For Acquisitions,
Company Sales, Management Buyouts,
Management Buyins and Fundraising.
Specialism In Venture Capital and
Private Equity and Business Valuation
Many
thanks to 2Brothershosting / Webgatorz
for a job well done! By sheer luck we
were recomended by a friend, & on
that note put our trust in them. we were
amaized by the quality, & value for
money. I only gave Chris@2Brothershostings
a few surgestions of what our requirements
were, and he did so much more which has
made our website what it is today. Do
bare in mind we are a new company on a
budget, just imagine what they could do
for you, & your buisness! Take a few
minutes of your time to look threw our
website, & judge it for yourself.
We
were quoted by one company £11,000 for the website we wanted, I know it's
a big website, but I just about fell over.
But then WebGatorz gave me a quote of
just £1,040.
I don't have to tell you, who we went
with.
Many
thanks again for your cooperation and input,
keep up the good work. I feel you will do
well at this web site stuff. Because your
prices and quality are far better than anybody
else.
Use
Drop Shipping To Set Up A Successful
Online Store Selling Name Brand
Products... Without Spending A Dime
On Inventory!
Let's
face it: Not everyone wants to develop,
design, and manufacture their own
products. You may be more interested
in finding great products that already
exist and then using your online
marketing know-how to build a successful
business.
But
what if you DON'T want the hassles
of things like tracking your inventory,
setting up warehouse space, and
maintaining a confusing shipping/receiving
infrastructure? Wouldn't it be great
if there was a way to set up a business
online WITHOUT having to deal with
all these issues?
Well,
there IS a way to avoid these headaches:
a technique known as "drop shipping."
This model lets you sell
quality, brand-name products on
your web site for a hefty profit, and the drop shipper takes care
of fulfilling the order. They warehouse
the stock, pack the orders, and
ship it out to your customers.
But
be warned: There are both advantages
and disadvantages to this model.
Keep reading, and I'll tell you
how to steer clear of the
scam artists and identify
great partners who will ship brand-name products for
you... on your behalf... all while
generating solid profits for you!
How Drop Shipping Works:
"Drop
shipping" is simply an arrangement
between you and the manufacturer
or distributor of the product you
sell whereby the manufacturer or
distributor -- NOT YOU -- ships
the product to your customers.
Here's an example: Let's say Mary wants to set
up a site that sells skin care products.
Instead of filling her basement
with cases and cases of stock, and
then going downstairs each time
an order comes in, Mary puts together
a drop shipping arrangement with
a manufacturer who ships the products
to her customers directly.
And the best part is that the manufacturer will
happily ship the products using
shipping labels with Mary's company's
name, address, and logo instead
of their own. The product arrives
at the customer's house a few days
later, and they never know that
the product wasn't shipped directly
from Mary's warehouse!
Let's say Mary has a product called the "Total
Skin Care Package," priced at $97.
A customer visits her site, places
an order, and is billed $97 plus
$11 for shipping and handling. Mary
then sends her distributor an e-mail
with her customer's order and shipping
information. The manufacturer packs
up the customer's order, puts Mary's
shipping label on the package, and
mails it out via UPS or FedEx, usually
within 48 hours.
The distributor then bills Mary for the WHOLESALE
price of the "Total Skin Care Package"
-- in this case, $64 plus $11 for
shipping and handling. Since Mary
has passed the shipping and handling
fee on to her customer, she has
just netted a profit of $33. And
all she had to do was send her manufacturer
an e-mail!
Drop Shipping Advantages:
There are a few huge advantages to this model. First, it saves
you the cost of building
your own inventory. If you're like
most people starting a small business,
you don't have a ton of extra money
lying around. The last thing you
want to do is tie up your cash in
inventory that you may or may not
be able to sell.
No inventory also means no leftovers. If the
product you sell suddenly becomes
outdated, obsolete, or just plain
un-trendy, you aren't the one with
a house full of stock that nobody
will buy. Many online retailers
find themselves having to offer
deep discounts -- and taking
huge losses -- on old products
just to get them out of their homes
to make room for more inventory!
You'll also be able to skip the hassles of shipping your products. Unless
you've already set up a shipping
account with someone like FedEx
or UPS, you'll be heading down to
the post office every day to buy
stamps and mail out your products.
And you'll be able to add new products
almost instantly. Since
you don't have to worry about ordering
inventory, you can add products
to your web site within a few hours.
If you find that your customers
are eager to buy a certain product,
you can have that item up on your
site in almost no time.
Choosing The Product:
Have you ever noticed that there are literally
hundreds -- if not thousands --
of sites selling huge mish-mash
selections of inexpensive gift items...
things like plastic gnomes and porcelain
figurines?
That's because there are a few HUGE drop shipping
companies that import these items
and then recruit web sites to sell
them on their behalf. These companies
have massive product inventories
and make it very easy for people
to get started selling their products
for them.
Unfortunately, this is NOT the way for you to
go if you are getting started with
drop shipping. There are already
a lot of giant gift sites out there
-- and way too much competition
for you to reasonably expect to
be successful at it.
Instead, spend some time researching different
kinds of products that you might
want to sell. The products you choose
should be in demand but not widely
available online. As usual, I highly
recommend targeting a niche market
rather than trying to find a product
that EVERYONE wants to buy.
Once you've found a product that you think may
be the right one for your business,
you'll need to do a little "competitive
analysis." This simply means finding
out what potential competitors are
charging for the products you want
to sell and calculating how much
of a profit you'll be able to make.
Choosing Your Drop Shipper:
So
how do you go about finding a reputable
drop shipper for your business?
Well, here's where doing your homework
will pay off. Whenever possible,
you'll want to set up drop shipping
arrangements directly with the manufacturers
of the products you want to sell.
The fewer middlemen you have to
go through, the bigger your
profits will be!
Let's
say you want to sell wooden toys
on your web site. After spending
some time combing through the search
results for "wood toys," you'll
have come up with a list of manufacturers
of wooden toys that you might want
to carry. From there, you'll want
to contact the manufacturers directly
and ask them if they drop-ship their
products.
Some
will let you know right away that
they are set up to drop ship for
you. Others will tell you that they
simply don't offer drop shipping.
Smaller manufacturers may never
have heard of the concept!
If
the manufacturer of the product
agrees to drop ship for you -- GREAT!
You can be fairly confident that
you'll be getting the best price
possible. However, if they don't
offer drop shipping, you'll have
to keep looking for another alternative.
This usually means tracking down
a distributor. (A distributor is
simply a company that maintains
a large inventory of another company's
products and distributes those products
to smaller companies.)
The
best way to locate a distributor
is to simply ask the manufacturer
of the product to recommend one.
Most manufacturers have established
relationships with at least a couple
of distributors, and they should
be happy to put you in touch with
one of them.
Another great way to find a distributor for the type of product
you wish to sell is by looking through
related trade magazines. You'll
often be able to find listings of
manufacturers and distributors advertising
in the back of these publications.
A couple of resources to check out
for listings of trade magazines
are SmallBusiness101 and Yahoo!'s listing of trade magazines. In addition, Drop-Shipping-News.com sells a "Consumer Products
Source Directory" that claims to
provide listings of dozens of trade
magazines.
You may also be able to find distributors and
manufacturers using the Thomas Register. They provide listings for thousands
of companies broken down by product,
brand name, and company name. It
takes some time to get used to navigating
through this site, but it can be
a great resource.
What To Expect From Your Drop Shipper:
Once
you've tracked down a few manufacturers
and distributors, you'll need to
get on the phone and contact them
directly. Before you start dialing,
though, you'll need to have a few
things in order, including your
official business name and your
Tax ID or Resale number.
Your Business Name and Tax ID Number
Take the time to set up your business as a legal entity
before you get started.
The U.S. Government's Small
Business Administration
maintains a web site that
has all the information
you need to get your company
up and running and explains
how to apply for a Tax ID
or Resale number in every
state. You can search for
the requirements in your
state by clicking here.
The process of setting up your business legally is actually
a LOT easier than most people
think. In many states, you
can get all the paperwork
done in about a day, and
it shouldn't cost you much
more than a few hundred
dollars if you do everything
yourself. Of course, there's
no shortage of lawyers and
accountants to help you
incorporate your business
if you'd rather not deal
with the paperwork.
Some
companies will also ask for a credit
reference... but don't panic! A
manufacturer will probably only
require a credit reference from
you if they will be billing you
monthly. Since most manufacturers
will bill you at the time of purchase,
this shouldn't be a problem. If
they do require credit references,
though, you can usually just provide
them with the name and telephone
number of your bank.
IMPORTANT NOTE FOR NON-U.S. BUSINESSES
Drop shippers based in
the U.S. are generally NOT willing
to drop ship internationally. There
are simply too many hassles with
customs -- especially since September
11th. Also, companies like FedEx
and UPS charge a fortune to ship
internationally. The cost of the
shipping can often be more than
the cost of the product!
If
your target market is in Australia,
for example, you'll want to locate
manufacturers or distributors based
in Australia so that you can avoid
the hassles of international shipping.
You -- and your customers -- will
end up with a LOT fewer headaches
this way!
Questions You'll Need To Ask
Most
companies that you contact will
be more than happy to speak with
you -- after all, you are going
to be selling their products for
them. When you call, simply ask
to speak with someone about becoming
a vendor for their products. Once
the switchboard puts you through
to the right person, they'll be
able to answer any questions you
have, including:
What is the wholesale price they can offer you on
their products?
You'll need to make sure that
the wholesale price they offer
is low enough that you will be
able to generate a good profit
based on what you will be able
to sell their products for.
Do they charge a handling fee for drop shipping?
If so, how much?
Most companies who drop
ship will simply add the cost
of UPS or FedEx shipping onto
your wholesale price, but some
will also charge you a handling
fee (generally between $1 and
$5). This is to offset their cost
of picking, packing, and processing
the order for you.
Do they have a monthly minimum OR maximum of products
they will drop ship?
Some companies will require that
you sell a minimum dollar amount
of their products each month (usually
around $100 per month). A few
will also have a monthly maximum
of units they will ship for you.
If you think that you will be
selling more than this number
each month, they'll refer you
to one of their distributors.
How do they ship their products?
Almost every company that drop
ships products will use a major
nationwide delivery service like
UPS or FedEx. Ask them to include
tracking numbers with the order
confirmations they send. This
will save you many potential problems
when customers ask, "Where is
my order?"
How do they bill you?
Most drop shippers will bill your
credit card the wholesale price
of the product plus shipping and
handling as soon as they receive
an order from you. With others,
you may be able to set up a monthly
billing cycle where you submit
payment for all orders at the
end of each month.
How do they deal with product returns?
Be sure to find out what their
policy is regarding returns.
Most reputable companies will
offer some kind of guarantee
or warranty on their products
and will deal with returns for
you. This way, if a customer
contacts you with a return,
you can simply tell them that
the manufacturer will be happy
to speak with them directly.
If your manufacturer doesn't
accept returns, look out! You
will be the one stuck replacing
defective merchandise for your
customers.
You'll also need the manufacturer to send you product information,
such as descriptions and images
of the products for you to put up
on your web site. Many companies
will simply tell you to take the
images directly from their own site.
Others will e-mail you a link to
their product information. Companies
with large inventories may want
to mail you a CD-ROM of their product
images and descriptions.
When
setting up an account with a distributor,
ask lots of questions about shipping
and order fulfillment, as these
are the two areas that can potentially
cause you the most problems. Make
sure that they are able to confirm
your orders quickly, and that they
can provide you with tracking numbers.
You need to be confident that you
will be able to deliver your customers'
orders promptly.
Avoid These Common Drop Shipping Scams
Wow, all of this sounds great, doesn't it? And
the truth is, there ARE lots of
people making tons of money using
the drop shipping model. But there
is also no shortage of crooks
and scam artists just waiting
to take your money in exchange
for the promise of "Instant Drop
Shipping Riches" or "Ready-Made
Online Drop Shipping Stores."
Here are a few things to watch out for when you're
researching drop shipping:
Companies offering to sell you lists
of drop shippers for $3, $4,
$7. The old saying
about "You get what you pay
for" applies here. Spend $4
on a drop shipping list, and
you'll get an e-mail listing
200 company names, addresses,
and maybe phone numbers. A few
calls to out-of-service numbers
and you'll realize that the
list is years old and basically
useless.
Companies charging you a "monthly fee"
to be your drop shipper. Think
about it: Why would a company
charge you to sell you things?
Answer: Because their products
are either worthless junk or
they're marked up WAY too high.
In either case, they know your
online store won't be able to
sell any of them, so they need
to make their cash from you
through a monthly fee.
Companies offering you a turn-key online business, complete with web site, wonderful products
(that can ONLY be purchased
from them), and a merchant account
that allows you to accept credit
cards. The strategy here is
to get you to spend YOUR money
advertising and selling their
products that they are buying
from REAL wholesalers, marking
up, and selling to you. These
companies usually also charge
a one-time and/or monthly fee.
Here's the bottom line: No one is going to do your work for
you. If you want to set up a real
online business, you're going to
need to do some legwork. Any company
that seems to be making your job
easier by providing you with lists
of products to sell or setting up
your site is just going to be eating
into your profits! As always, ask
yourself if their offer seems too
good to be true. If it does, you
can be sure that they'll be taking
their cut!
Based
on our research, I'm NOT going to
recommend spending money on any
of the "drop shipping resources"
that are for sale online; anyone
should be able to locate potential
drop shipping partners by doing
a little research and making a few
phone calls.
Common Drop Shipping Problems -- And
Simple Solutions
Of course, no business model is without disadvantages
-- and drop shipping your products
can lead to some serious problems
if you aren't careful. Below are
a few of the most common problems,
along with some tried-and-true solutions
to help you save some serious time
and money:
Problem #1:Shipping
Delays
Remember how I told you that the
best thing about drop shipping is
that you don't have to worry about
shipping your products? Well, this
can occasionally create issues.
Let's say you send an e-mail to your drop shipper
asking them to send an order to
your customer, and it just so happens
that they are sold out of that item
at the moment. The longer it takes
them to let you know that the item
is unavailable, the longer it will
be before you can pass that information
on to your customer, and the worse
you'll end up looking.
Solution: Insist on
prompt order confirmation from your
drop shipper. Ask them to send confirmation
e-mails or faxes to you when they've
processed your order, letting you
know that the order has been shipped.
If they find that they're out of
stock, make sure they let you know
IMMEDIATELY.
Problem #2:Tracking
Shipping Status
Your customer calls you up a week
after ordering a product and asks
what the status of their shipment
is. Unfortunately, since you didn't
ship the product, you have no idea
what to tell them. And if your customer
is demanding a refund for an order
that has already been shipped, YOU'LL
be paying for it when your drop
shipper sends you the invoice!
Solution: Most of the
nationwide delivery services (like
UPS or FedEx) now offer online tracking
services. If a customer calls to
check the status of their shipment,
you can instantly tell them where
their package is by entering their
tracking number at the UPS or FedEx
web site. Better yet, include the
tracking number in your confirmation
e-mails to your customers and let
them track their orders themselves.
Just be sure to ask your drop shipper
to provide you with tracking numbers
once your orders have been shipped!
Problem #3:Drop
Shipper Backs Out
Occasionally, a manufacturer or
distributor will simply back out
of their drop shipping agreement
with you. They may decide that the
work involved in packaging and shipping
their products for you simply isn't
worth the trouble.
Solution: Unfortunately, you'll never really know how reliable your partners
will be until you've placed a few
orders from them. When
you are setting up your agreements
with your drop shippers over the
phone, you should be able to get
a good sense of how reliable they
are based on how they answer your
questions. This is one of those
areas of your business where you'll
have to follow your instincts!
Problem #4: High
Shipping Costs
Finally, you can
run into problems with shipping
costs if you work with a number
of different manufacturers and distributors.
For example, let's say a customer
orders 6 products from your web
site, with each one being drop shipped
to them by a different manufacturer
or distributor. They'll have to
pay shipping and handling costs
on each individual item, and that
can add up to a lot of extra money.
If your customers see that they'll
have to pay $40 to ship $80 worth
of goods, they'll abandon their
order every time.
Solution: You'll avoid
those abandoned orders by just using
one manufacturer or distributor
on your web site. Keep in mind that
many distributors deal with thousands
of products (usually related to
each other), so you can usually
source all of your products with
one distributor. Of course, your
site may never run into this problem.
If you take my advice and focus on selling one
or two niche products (like toasters),
you can reduce the likelihood of
customers ordering more than one
product in the first place. (Who
needs six toasters?)
Final Thoughts:
Drop shipping can be an easy way to get started
selling online. Since the manufacturer
or distributor takes care of warehousing
and shipping, you'll be able to
concentrate your efforts on building
your web site and marketing your
products. And this is what most
entrepreneurs are good at!
As an experiment, we decided to contact several
manufacturers to set up a drop shipping
arrangement. When asked, we told
the manufacturers that we had no
previous experience running an online
business. This didn't present a
problem to any of them. Basically,
a company will be glad to have a
potential vendor contacting them...
After all, it can only increase
their sales!
When searching for a product to drop ship, don't
spend money on "drop shipping directories."
Think about it: Not only is their
information frequently out of date,
but the companies listed in these
directories are the ones that everyone
who buys the directories will be
contacting. That means more competition
for the products you'll be selling.
And take the time to choose your products carefully.
Make sure there aren't already hundreds
of sites selling these products
at prices that you can't afford
to compete with. Products that are
aimed at a niche market will sell
better online than products aimed
at the general population. And remember
to ask yourself: Is this a product
I would buy myself?
Most importantly, remember that drop shipping
isn't a magic formula to make you
rich. Building a business DOES take
a certain amount of hard work, and
this is no exception. The real "magic"
is that drop shipping allows you
to invest your money in marketing
rather than inventory, and a well-planned
marketing strategy is what will
ultimately help you build a lucrative
online income!
