There you have it. You just made a $28.00 profit on one product. You never even touched the product, and you didn't have to pay for it up front.
Be careful! There are a LOT of people out there who want you to believe that they are real Drop Ship Suppliers, when they are not. We'll talk more about them a little later. These people are no better than the scam artists who want to fool you into buying a useless web site. You need to find REPUTABLE Wholesale Suppliers. A good rule to go by: a REAL Wholesale Drop Ship Supplier does NOT charge you an "Account Setup Fee" OR "Monthly Fee" just to open or maintain an account with them. (We'll talk about different fees that can be associated with drop shipping in a following Chapter).
Quick Commercial Break:Our primary focus here at Worldwide Brands is researching and identifying REAL Wholesale Suppliers. We publish OneSource; the Internet's premiere Source of Factory-Authorized Suppliers and Direct Manufacturers who will Drop Ship for YOUR Internet business.
The distributors we list are all genuine Wholesale Suppliers. They will NOT charge you a fee just to open an account with them. They will NOT force you to buy a minimum number of products. They WILL ship the MILLIONS products OneSource represents straight to your customers from their warehouses, one at a time.
You can Preview OneSource Here.
It's important to understand exactly what a "Drop Ship Fee" is, and how it works.
Remember, Drop Shipping has been around for DECADES; it's not something new just since ECommerce came along. There are standard practices in Drop Shipping that have been tested and proven over a period of MANY years, and the Drop Ship Fee is one of them.
What is a Drop Ship Fee?It's simple. A Drop Ship Fee is the "Handling" part of "Shipping & Handling".
When a customer buys a product from your Online Store or Auction, you're going to charge them your Retail Price, plus "Shipping & Handling".
You know you've seen it before! "Shipping & Handling" is attached to just about everything you've ever ordered from a catalog, a TV ad, or the Internet. Just what is that ever-mysterious "Handling" charge?
Consider this: Wholesale Suppliers usually sell products in bulk quantities. A case here, 30 cases there, a whole truckload somewhere else. They do not have to individually pack and ship each item...they just throw some cases of products on a truck, and off they go. That's what they do most often.
When a Wholesale Supplier Drop Ships one single item for you, they are doing a lot of extra work for you. They call that work "Handling".They are storing the product for you, in THEIR warehouse. You don't have to clean out your garage, or rent that extra space somewhere.
They are packing the product for you. You don't have to buy shipping boxes, envelopes, labels, etc. You don't have to spend the time packing the product. Your time is a very real expense to your business.
They are using THEIR UPS or FedEx Account to ship the product directly to your customer.
They will handle all returns and damaged goods replacements for you.
This extra work costs them money, and they have to cover their expenses somehow.
That's a lot of work that YOU don't have to do. That translates into money you SAVE. You not only have to consider your expenses for everything listed above, you have to learn that your time costs your business money, too. When you can get someone to warehouse, package and ship your products for you, you not only save all those expenses, you save time. Use that time to promote your business, instead of standing in your garage packing boxes!
So, the Drop Ship Fee is the "Handling" part of "Shipping and Handling". It's all the work done by the Drop Ship Distributor to prepare your single-item order to go out the door.Some Drop Ship Distributors charge a Drop Ship Fee when they fill an order. As I said, it's been a normal part of the Drop Shipping business method for decades.
You pass that fee along to your Customer as a part of your "Shipping & Handling". However, you may choose to simply include it in the price of each item you sell, to make your Customer's shipping cost appear lower.
Here's an example:
q Your Store's Retail price for the Cat Handcuffs: 29.95
q Your Store calculates Shipping to Mr. Bird's door at: 5.62
q Your Distributor charges a Drop Ship Fee of: 2.00
q If you're charging the Drop Ship Fee as "Handling", Mr. Bird's Total will be 29.95 plus 7.62 Shipping & Handling (5.62 Shipping plus 2.00 "Handling" [Drop Ship Fee]).
q If you're charging the Drop Ship Fee as part of your PRICE, then your Store's PRICE for the Cat Handcuffs will be 31.95, and Mr. Bird will only pay 5.62 in Shipping & Handling.
Internet customers are perfectly comfortable with paying Shipping & Handling charges. Some of the biggest Online Stores on the planet use Drop Shipping exclusively, and charge the Drop Ship Fees that THEY pay, right back to the customer, as a "Handling" charge.
Different Types of Drop Ship Fees:Drop Ship Fees are almost always charged on a "Per Address" basis.
That means that if your distributor's Drop Ship Fee is 2.00, and your customer orders ONE item from your store, the drop ship fee that you charge them as "Handling" will be 2.00. It ALSO means that if your customer orders SEVERAL items, and they all come from the same distributor, the Drop Ship Fee for the ENTIRE order is STILL just 2.00, since it's all shipped from the distributor at the same time to the same address.
SOME Drop Shippers charge Drop Ship Fees on a "per box" basis. It's rare, but does happen sometimes. Now, that does NOT mean that there is a separate Drop Ship Fee for each ITEM; it's for each BOX. Most of the time, with multiple-item orders, the distributor can put several items into the SAME shipping box, and you STILL only pay the Drop Ship Fee ONCE.
In conclusion, there are several legitimate ways to Source Products for your Home-based Internet Business. Using Drop Shippers is one of them, and should be a part of your Product Sourcing effort, but NOT all of it.
Another method of Product Sourcing for your Home-based Internet Business is to buy "in bulk" from Wholesale Suppliers. This means, of course, that you find a Wholesale Supplier, and spend some money up front buying a few cases of products from them. The Wholesale Supplier ships those products to you. You stash those cases of products in your garage or spare room, and re-pack and ship each product individually to your customers.
The advantage of this method is this:qWhen you buy anything in bulk quantities, you do get better Wholesale Prices. This gives you a better competitive edge when you sell in price-driven markets like eBay. Keep in mind that eBay is what is known as a price-driven market. When people are buying products on eBay, they're looking to spend as little money as possible for those products.
So, many eBay Sellers prefer to buy products in bulk, because they do get better wholesale pricing, and have more room to make a better profit in a price-driven Auction market.The disadvantage of this method is this:
qMost real Wholesale Suppliers won't work with you.
It's unfortunate, but true. Most of the real Wholesale Suppliers out there do not want to sell bulk orders of products to small, Home-based Internet Businesses. Why? Because we don't have the money to order thousands of dollars worth of products at one time.
You see, a Wholesale Supplier's business is based on volume sales. They don't make very much of a profit on the products they Wholesale. That means that they have to sell a lot of product in order to make money. So, a Wholesale Supplier's main business is selling truckloads of products to large retail chains, like Sears, Target, KMart, etc. They simply won't sell to anyone who can't afford to place a minimum order ranging from $5,000 to $25,000 or so. They don't consider it to be worth their effort!
Worldwide Brands comes to the Rescue!Yes, I'm going to talk about my company again. I know I've said it before, but I really want to stress that the purpose of this EBook is to help you with genuinely free information. It is not meant to be a commercial for my company.
However, what we do here is to create real solutions to some of the problems you're going to face when starting your Homebased Internet Business, and it would be silly of me to not tell you about those solutions!
The Problem:
q Most real Wholesale Suppliers will not work with Home-based Internet Businesses, because as a small, Home-based Business, you can't afford to spend between $5,000 and $25,000 to buy the minimum quantities of products required by these Wholesale Suppliers.
The Solution:q Over the years, my company has become very well known in the Wholesale industry, because we've not only helped small business owners to connect with Suppliers; we've brought a great deal of business to many Wholesale Suppliers from small businesses.
Because we have that reputation, we are able to go to large Wholesale Suppliers and say, "Look, there are a lot of small businesses out there who want to buy in bulk, but can't afford your high minimums. If you're willing to lower your minimums to an affordable level for us, we will get your company's name out to many Home-based Internet Businesses that want to buy from you.
Well, the Wholesale Suppliers know us, and they like the idea that we can bring them your business without costing them any advertising money on their end. It's truly a win-win situation for everyone."Light Bulk" Wholesaler is a term that we created to describe a real Wholesale Supplier that will:
q Sell New, Factory-Warranted Products, at Wholesale Pricing, to you; the Home-based Internet Business Owner.
q Sell to you in Affordable Quantities, with minimum orders under $500. That's why we call it "Light Bulk".
q Our Research Team has spoken personally with each and every one of the hundreds of Wholesale Suppliers in this Directory. They are all willing to do business with you on the terms above. Their contact information is updated constantly, and our Team adds new Wholesale Suppliers on a daily basis.
Anyway , thousands fully pre-verified and legitimate Light Bulk Wholesale Suppliers are available in OneSource, our premiere Product Sourcing Tool, available on our web site. So, enough with the commercial. Let's talk some more about how to actually pack and ship products from your home.
Using Light Bulk Wholesalers