Hi everyone, I hope you’re doing good. I get a lot of questions asking me to explain drop shipping. So today I thought I would explain some things about drop shipping. Drop shipping is a great way to start your home business. You don’t need to buy anything up front. You don’t have any overhead because you work right out of your home. Drop shipping is probably the easiest and best way to start up a home business without any money. The definition of drop shipping is: Drop shipping is a management technique in which the retailer(you) does not keep goods in stock, but instead transfers customer orders and shipment details to wholesalers, who then ship the goods directly to the customer . The retailers make their profit on the difference between the wholesale and retail price.

There are a few things you need to know before you get started with drop shipping. First, you need to find a niche product to sell. Finding the right product is very important. Products may vary in popularity, depending on how new or old the product is. For instance, Velcro is out right now, but 15 years ago it would have been very profitable to sell. When you look for a drop shipper, you need to know exactly what you want to sell. Don’t look for a general drop shipper who sells everything; they are usually middlemen posing as wholesale/drop shippers. Once you find out what product/s you want to sell, your done with the hard part.

Once you find out what you want to sell, you need to search for a real drop shipper/wholesaler. You may have to find more than one drop shipper if you want to sell multiple products. If you have a problem locating a real drop shipper/wholesaler, check out my post about how to find them here: http://thehomedropshipguide.com/blog/?p=254

When you find a drop shipper give them a call and check them out. If the drop shipper doesn’t have a phone number to contact them; DON’T USE THEM. You will surely run into big problems if you can’t contact your supplier by phone. Professional businesses who drop ship have phones to contact them. Go by the simple moto, no phone, no business. When you find a drop shipper that you like, you will have to set up an account with them. You will need to fax your business license and tax id numbers as proof that you are a retailer. If they don’t require a business license or tax id numbers, avoid them, they are not a real wholesaler/drop shipper. Some drop shippers will email you some forms you need to fill out to complete your account setup process. Try and avoid drop shippers/wholesalers with a minimum order requirement. You shouldn’t need to buy a certain amount of product to do business. This is just another way a company can make extra money from you.

Now you need to list and advertise your products. List them on your website or favorite auction marketplace. Do some research online and see what the products you have usually sell for. The price for an item online and in storefronts greatly varies. For instance, stores like Best Buy and Circuit City have huge overhead costs. Home businesses have very low overhead costs, if any. So, online prices tend to be much lower than retail stores. Since you will probably be promoting your products online, I would sell them for the average online price. Now that you have done your price research, list your item with a price that will compete with your competition. If you are buying the product for $50.00 each and they are selling for an average price of $100.00, you have a good product to sell. You make profit for being a middleman. After all, the retailer(you) is the middleman. Your normal, everyday, person, can’t get the products at the same prices you can get them for. These are the benefits of having the right to buy wholesale and resell at retail prices.

Once your items sells, the customer will pay you. When you receive your payment, you can call or email your order to your drop shipper. Remember, you don’t have to pay for anything out of your pocket. The customer pays you, then you pay the drop shipper to send the item to your customer. If you have a good drop shipper, they will send the package with your business name and address on the label. This way, the customer will never know that you drop shipped the product to them. They will think you mailed it from your business residence. This is why drop shipping is so useful when you start a home business. You get paid to advertise a product and give a drop shipper your customer address. The drop shipper does the rest and your business gets the credit.

Drop shipping is very easy and very self explanatory. You do need a business license and/or tax id numbers to work with real wholesalers/drop shippers. But the money you save by doing it the right way and not going to middleman is enormous. If anyone has any questions about drop shipping, feel free to email me. Thanks for reading my blog everyone!

LP@thehomedropshipguide.com