Auction Information

Dropship Your Way To Ebusiness Success


Q: I would like to start my own eBay business, but I really don't want to invest in a ton of inventory until I can get a better handle on what might or might not sell. I read another column about dropshipping, but I'm still a little fuzzy on how the whole process works. Do you think using dropshipping is a good way to start an eBay business and if so, how do I get started? -- Candace M.

A: Dropshipping is a topic that I first addressed in my column way back in April, 2003, which is decades ago in Internet years. But with the continuing growth of eBay and it's positioning of itself as a viable way for anyone looking to launch an ebusiness, the topic of dropshipping is now hotter than ever. It is also now more misunderstood than ever.

Dropshipping has been around since Sears first started selling goods from its mail order catalogs over a hundred years ago. However, the idea of dropshipping still confuses many people who don't understand exactly how the process works.

By definition, dropshipping is a method of selling and distributing goods wherein the distributor or supplier of the product (the dropshipper) ships the product directly to the end user (your customer) on the retailer's behalf (that's you).

The process of dropshipping involves three parties who take a product from manufacturing to market. They are a manufacturer, a distributor, and a reseller.

Let's use a blue widget as a sample product to demonstrate the process: Blue Widget Manufacturing (manufacturer): This is the company that manufactures blue widgets. Blue Widget Manufacturing does not sell directly to the public or supply the retailers who ultimately sell the blue widgets to the end user. They prefer to use distributors to handle the task of taking their blue widgets to market. Blue Widgets sells blue widgets by the truckload to distributors who pay $5 per blue widget.

A1 Distributing (distributor/dropshipper): A1 Distributing is the company that purchases blue widgets in bulk from the manufacturer and supplies them to resellers at a cost of $7 each. The distributor does not ship blue widgets to the reseller, but ships orders directly to the reseller's customers as the widgets are sold.

Big Bob's eBay Widget Store: Big Bob sells blue widgets to the public from his eBay store. Bob orders the blue widgets from A1 Distributing as he sells them (usually one at a time) and has A1 ship the blue widget directly to his customer. Bob sells blue widgets to the public for $10 each, which means that for every blue widget sold he nets $3.

How The Process of Dropshipping Works

Here are the seven steps involved in starting a dropship ebusiness:

STEP 1: Choose A Product To Sell

The very first step in any sales process is deciding what product to sell. There are many factors that should be considered before deciding on a product to sell, but for now let's say that you decide to sell CD players on eBay.

STEP 2: Locate A Supplier Who Will Dropship For You

Using a research tool like Google, Thomas Register, or an industry-specific resource like The Ultimate eBay Dropship Power Pak, you search for and find a company who will dropship CD players for you. The company offers you a 35% mark up over cost, which means that they will supply the CD players to you for $100 each and you should be able to retail them for $135. You make sure that the dropshipper has a good stock of CD players on hand so you don't end up selling a product that must be back-ordered.

STEP 3: Set Up An Account With The Dropshipper

You contact the company that can supply the CD players and set up a reseller account with them. This can often be done online or by phone, but some companies will require that you complete and return a reseller application to open an account. Some companies may also require a tax ID and business license.

STEP 4: Advertise The Product For Sale On eBay

Now that you have your supplier lined up and know that the product is in stock, it's time to make a sale. You advertise the product using an eBay auction. Since you know what you must pay the dropshipper for the product, you know what the minimum amount you will take for the product. In this case you start your auction at $100 since that is your cost. If you are confident that you can get more than $100 for the product you can start with a lower price, but remember that if the product goes for less than what it costs you to fill the order, you will lose money. Also remember that the dropshipper will charge shipping, so you should figure that into your sale.

STEP 5: The Product Sells

Great news: your CD player sells for $135 and your customer pays you with a PayPal instant payment. I highly recommend that if you are selling on eBay you use PayPal or some other online processor to accept instant payments. This allows the customer to pay you faster, which lets you place the order with the dropshipper faster, which gets the product to your customer faster.

STEP 6: Place The Order With The Dropshipper

After your customer pays you, you should contact the dropshipper immediately to order the product on your customer's behalf. The dropshipper then ships the order to your customer under your company name and address.

STEP 7: Follow Up After The Sale

This is where many new ebusiness people drop the ball. Just because your customer has paid you and you've placed the order with the dropshipper does not mean that you are out of the loop. Quite the contrary, if there are problems with the order you are the one that will be held responsible in the eyes of your customer.

Be proactive in your customer relations. Follow up with your customer to let them know that the item has been shipped. Offer yourself as the personal contact for any issues that may arise. This is also a great way to sell that customer more products. Invite them to check out your eBay store or website if you have one.

Many people are afraid to use dropshipping as a method of sales due to the horror stories that fill the Internet about unscrupulous dropshippers who take the money and don't fill the orders, merchandise that is eternally back ordered, unscrupulous middle men posing as dropshippers, etc. Make no mistake, the dropshipping industry - like most other industries - does have its share of shady characters who would rob you blind given the chance, but there are also hundreds of honest dropshippers who can help you build a profitable eBay dropship business.

Dropshipping is a complex topic that can't be completely addressed here. For that reason I have written a detailed report on dropshipping that is available to Entrepreneur.com readers for free.Small Business Q&A is written by veteran entrepreneurand syndicated columnist, Tim Knox.Tim's latest books include "Small Business Success Secrets"and "The 30 Day Blueprint For Success!"Related Links:http://www.smallbusinessqa.comhttp://www.dropshipwholesale.net


MORE RESOURCES:
This RSS feed URL is deprecated, please update. New URLs can be found in the footers at https://news.google.com/news


Blue Mountain Eagle

Foreclosure auctions considered a success
Blue Mountain Eagle
Grant County earned about $168,000 from an open auction held May 17 to sell tax-foreclosed properties and about $155,000 on a silent auction with bids opening June 15 for the remaining properties. Thirty-one tax-foreclosed properties were deeded to the ...



ECM Publishers

Two Large Collection Auctions
ECM Publishers
July 1 • 11:00 AM. 460 Cokato St W, Cokato, MN. 20+ Gas Engines (hit & Miss), Maytags, alum. trailer, fire fighter collectibles, home furnishings, mower & snowblower, bike, collectibles, gun shop collector retirement, guns parts, wooden duck decoys ...



Nasdaq

China plans to introduce anonymous bond auctions system
Nasdaq
In a notice confirmed by the sources, the China Foreign Exchange Trade System (CFETS), also known as the National Interbank Funding Center, said that the anonymous bond auction system would apply to bonds with high-yield and low-liquidity ...



Minnesota Monthly (blog)

Minnesota's First Fine Arts Auction House
Minnesota Monthly (blog)
Last year, Sean Blanchet and Robert Snell met at the Minnesota Antiques Dealers Association's Antiques and Decorative Arts Show. This year, they came back, young kids in tow, and set up a huge booth together under the name Revere Auctions.



Deadspin

NBA Auctions Off What J.R. Smith Wore When He Lost What Was ...
Deadspin
A token of J.R. Smith's eternal shame is up for sale on the NBA's auction site. “He played 38 minutes and registered 10 points with 2 assists and 6 rebounds,” ...
NBA Auctions JR Smith's Game-Worn Jersey From Game 1 of NBA FinalsSports Illustrated
JR Smith Game 1 jersey up for auction; how much would you bid?cleveland.com
JR Smith's jersey from his infamous Game 1 gaffe in the NBA Finals is up for auctionCBSSports.com
NESN.com -WKYC.com -NBA Auctions
all 54 news articles »


Ridgefield, CT Estate with Award-Winning Gardens Scheduled for Luxury Auction® June 29th
PR Newswire (press release)
RIDGEFIELD, Conn., June 19, 2018 /PRNewswire/ -- Following the successful sale of a 10-acre country home in Redding, CT, Miami-based Platinum Luxury Auctions has announced another, upcoming real estate auction in the town of Ridgefield. On June 29 ...

and more »


HelloGiggles

People are bidding tens of thousands of dollars for this single Dorito
HelloGiggles
It's an experiment gone oh-so-right and delicious. Late last week, Doritos unveiled a dinosaur-sized nacho cheese-flavored chip in partnership with Jurassic World: Fallen Kingdom (in the collaboration of our Jeff Goldblum dreams). And now, for a ...

and more »


FOX5 Las Vegas

Jerry Lewis and movie memorabilia auction at Planet Hollywood
FOX5 Las Vegas
Planet Hollywood Las Vegas Resort & Casino is scheduled to host an auction where famous pop culture items are up for bids, as well as Jerry Lewis's former belongings. Items once owned by Marilyn Monroe, Elvis Presley and Lucille Ball are expected to ...
Jerry Lewis' Daughter Shows Off Her Dad's Personal Items Going ...Inside Edition
Jerry Lewis auction preview: From 'The Nutty Professor' to personal ...News3LV
'Star Wars,' Jerry Lewis, Trump items on auction in Las VegasLas Vegas Review-Journal

all 8 news articles »


Hurriyet Daily News

Turkish Treasury borrows over $1.4B through auctions
Hurriyet Daily News
The Turkish Treasury borrowed a total of 6.72 billion Turkish liras ($1.42 billion) from domestic markets on June 18, according to an official statement.
Turkey's Treasury holds auctions to borrow over $1.5BAnadolu Agency

all 4 news articles »


ColorLines magazine

Family Auctions Rosa Parks' Restored Detroit Home
ColorLines magazine
The Associated Press reports today (June 14) that Guernsey's, an auction house in New York City, plans to sell a house once occupied by Rosa Parks in July. The auction represents the latest chapter in a saga that started when the racial justice ...
Why Buffett's son bought Rosa Parks archiveCNNMoney
Rosa Parks' home has been rebuilt in Berlin - CNN Style - CNN.comCNN.com
Rosa Parks exhibition canceledThe Brown Daily Herald

all 85 news articles »

Google News

home | site map
© 2006