Posts Tagged bulk orders
How Drop Shipping Can Increase Your Profit Margins
Posted by Wholesale News in Bulk Drop Shipping, Drop Shipping on May 28th, 2009
Profit, profit, profit. That simple six-letter, two-syllable word represents the pot of gold at the end of the rainbow for every online retailer, entrepreneur, and e-commerce venture. After accounting for all of your operating expenses and overhead, you can effectively calculate your profits. If this number discourages you or creates stress on your business, then it’s probably time to revamp your business model. By reducing your overhead costs, you can significantly increase your profit margins. Drop shipping reflects a practical and effective solution for trimming expenses and ultimately creating a more sustainable business.
If you’re starting extremely small, then at the most basic level, you’ll need a computer, virtual storefront, phone, and a handful of reliable drop ship supplier partnerships. As your product offering expands, your conversion rate increases, and your site matures in the search engine result pages, then your sales will inevitably increase. Given, of course, that you’ve launched a functional site with a product that will sell. In this capacity, drop shipping creates a way for you to gain capital from your customers while preserving the capital that you’ve already earned.
Selling other peoples’ products without having to house inventory represents a brilliant way to grow and develop an online business. Without having to invest in warehouse space, you relinquish your responsibility of keeping stock and tracking inventory. Drop shipping also alleviates the burden of packaging and shipping orders. These two elements alone can drastically reduce overhead and can positively impact your bottom line. Because you don’t need to allocate resources to fulfill warehouse capacities, you can invest your resources into more rewarding efforts. Hire a team of knowledgeable sales and service employees to help you effectively increase your average order size and number of sales. Implement a team of strategic marketers to help you analyze how to increase conversion rate and to determine where to add more products or product categories. Use your new profits to maximize your advertising efforts.
Since you will not be responsible for keeping stock, you reduce the risk of dealing with product that do not sell. Instead of finding a way to move discontinued product or poor sellers, you can either feature a limited time sale on your site or simply remove the SKUs from your product offering. Conversely, if you discover a top-selling item that you’re not currently carrying, you do not have to wait for a manufacturer to ship you a bulk order of the desired item. Instead, you can instantaneously add the SKU once you have the relevant information entered into your system, and you can then immediately capitalize on product sales. Lack of lag time and prompt additions can easily translate into higher profits.
While you certainly need to give or invest in order to gain and receive in the business world, drop shipping can help you to increase your sales and preserve your capital while maximizing your revenues and profits. Leverage the advantages of drop shipping in order to increase your profit margins, develop your business, and become a major player in a lucrative market.
How To Avoid the Drawbacks of Drop Shipping
Posted by Wholesale News in Drop Shipping on May 28th, 2009
While drop shipping offers many appealing advantages and convenient features for any start-up e-commerce company, there are inevitable drawbacks to consider as you iron out the details of your business model. However, as long as you are properly prepared to combat potential flukes and flaws that may come your way, then you will likely find yourself a part of an extremely lucrative business venture. From selecting a profitable niche of products to market to product management to working with reliable and reputable drop ship wholesalers, there are a number of factors to weigh prior to delving into a drop shipping business.
First things first: Invest your resources into marketing a niche of products that has the potential turn profitable. Because you’re not ordering items in bulk quantities and because you’re having individual items shipped directly from the supplier’s warehouse, you will likely experience an increase in costs. To compensate for your costs, retail and price your items strategically so that you still effectively gain margin points. Ask suppliers or sales representatives to conduct product trainings and demonstrations so that your service team is both knowledgeable about and comfortable with your virtual product catalog. Require that suppliers and manufacturers send along informative collateral and product-related materials that can serve as on-call reference points for your service team. Product familiarity may translate into fewer returns, and ultimately, more satisfied customers. Satisfied consumers can signify higher customer loyalty and retention rates.
While drop shipping eliminates the need for warehouse space and shipping docks (at least as you begin your business), it can pose potential problems in regard to product management. When you establish a drop shipping relationship, you virtually relinquish control on a number of levels throughout the buying cycle. You may not always be aware of back-ordered items or discontinued product. In order to minimize the chance for miscommunication at this level, request weekly inventory sheets from the supplier so that you’re both on the same page. Although you have opted to leave the supplier with the responsibility of packaging and shipping the product, you are inevitably held responsible for the quality of the product. From packaging to delivery, you will be the point of contact for your customer. While the entire delivery process can be concerning, there are several precautions that you can take in order to measure the credibility of the supplier. Do a few test shipments with the supplier to gauge potential damage ratings or the likelihood of shipments being lost in transit. Have the supplier send you various products, so that you can see first-hand how different types of items are packaged.
Pay close attention to the nuances of particular drop ship wholesalers, including monthly fees and lead times, so that you can preview the future of your potential partnerships. Create a black and white terms and conditions agreement that clearly outlines how and by who returns, back-orders, and lost or damaged items will be handled. As with any large undertaking, careful research and focused planning will dictate the success of your business.
While drawbacks are virtually inevitable in any situation, they can be easily avoided with proper preparation. In regard to getting involved in a drop shipping business, you must first ensure that your product offering has a chance at being profitable and appealing to a large audience. From here, work to establish legitimate relationships with credible drop shipping wholesalers and sales and profits will inevitably follow.
How Drop Shipping Can Reduce Inventory Issues
Posted by Wholesale News in Drop Shipping on May 28th, 2009
Storage space, warehouse tracking, shipping costs. Each of these represents a concerning angle that brick and mortar retailers and e-commerce companies alike may entertain as they prepare to start a new business venture. Investing resources like money and time into getting a business off the ground can be quite costly, especially if you haven’t thoroughly explored different avenues for accomplishing your tasks as efficiently as possible. Drop shipping can be an extremely beneficial means of finding a way to reduce, and virtually eradicate, inventory issues. Watch your revenues and profits increase as your overhead costs substantially decrease.
Housing inventory can be a monstrous undertaking in and of itself. Finding warehouse space close to your headquarters or office operations, expanding your budget to accommodate your new found space, and investing the time into planning the size and scope of your housing project can drastically drain and quickly sabotage your bottom line. Drop shipping quickly erases any immediate inventory housing issues. Sending products directly from the supplier’s warehouse to the customer’s doorstep is a practical way of minimizing your cost investments throughout both warehousing and shipping processes. While you may have to either directly or indirectly deal with back-orders and discontinued product scenarios, you relieve yourself of the burden of having to find homes for products that may have out-lived their life cycles.
Warehouse tracking is another challenge to consider when you’re debating housing your own inventory. In addition to allocating resources toward hiring additional employees to maintain your warehouse, you’ll have to account for time spent tracking, ordering, and re-ordering product. By leveraging the practicality of drop shipping, you eliminate the need for extra hands as well as the potential for incorrect inventory calculations and the investment in specialized warehouse tracking systems. Drop shipping puts the responsibility of inventory on the supplier, manufacturer, or distributor instead of on your own manpower. This can free up both time and resources, and may translate into additional funds for marketing and advertising campaigns.
In conjunction with the two elements mentioned above, drop shipping and the lack of housed inventory helps to reduce shipping costs. By shipping product directly from the supplier’s warehouse, you alleviate your business of freight-in and freight-out costs. In order to compensate for the proportion of shipping charges that you’ll inevitably incur, you can strategically incorporate such costs into your pricing tactics. Again, these “extra” monies can be fueled into more worthwhile efforts for your team and your business, like product demonstrations and trainings, marketing and advertising efforts, and team-building activities.
Dealing with inventory can be an unnecessary headache. It’s a process that can compromise valuable amounts of time, and that can stunt the growth and development of an otherwise promising business venture. Utilizing drop shipping as a way to reduce inventory issues can do more than just that; it can positively impact company revenues, profits, resources, and morale. Afford yourself and your company the opportunity of streamlining productivity and of reaching new levels of success by reaping the benefits of drop shipping.
How to Find Good Dropshipping Companies
Posted by Wholesale News in Bulk Drop Shipping, Drop Shipping, Home Based Business on May 20th, 2009
So you want to open a business from home but you don’t know where to start. You might want to consider dropshipping. What is dropshipping? Simply put, it’s a business arrangement where you sell other people’s wares without worries over shipping or packaging issues. Your only duty is to market the product. And, once you generate sales, the dropshipping company you’re working with takes care of mailing the package out.
Of course, there is a downside to dropshipping companies. In order to take advantage of them you’re going to have to pay more for your products in general. This could translate into a lower profit margin depending on how you market your wares.
This is why you want to make sure you’re using the best dropshipping companies to begin with. And you can do this by researching existing dropshipping listings whether it’s in the phone book or through dropshipping directories. Or, you can go with companies like Doba which is considered a ‘middleman’ dropshipping company.
How does Doba work? Basically, you pay $49.00 a month to have access to their database of products. There are hundreds of different products available ranging from food to video games. And, like any other decent dropshipping enterprise, you have regular stock reports as you sell off their inventory. You can also call or write them as they have listed all of their contact information right on their website.
Yet, what if a person decided to go in the other direction… which would involve working with ‘traditional’ dropshipping companies that are not in the middleman category? Basically, they would need a business license because traditional dropshipping companies don’t like working with enterprises that haven’t developed a name for themselves or their company. But other than that, everything else would be the same only better. There would be no monthly fees and they could mail off items without worrying about the shipping expenses.
Speaking of shipping expenses, you might be wondering which tactics you could use to offset your profit margin, (at least in a positive way). The first could involve charging more for your items.
For example, say a dropshipping company charged $10 for a gold chain. This price includes the shipping expenses. Try to offset your profit margin by charging $20. If you do so, you will get a $10 profit despite having to contribute maybe $3.00 or so to shipping.
Another option could involve a psychological trick. Up the price just a little bit and tell your consumer that shipping will be included with the item. They will think they are getting an excellent bargain, especially if it’s a product that they really wanted.
Lastly, you could use a different psychological tactic… one that is more common. This involves showing the shipping as a separate price and including it towards the end of their shopping experience. If your shipping is less expensive, (which it may be even if your competitor is Amazon), they won’t be so intimidated. If it’s something they desire, it won’t hurt to pay $5 extra for shipping.
In conclusion, finding good dropshipping companies is not an easy battle but it’s not impossible either. If you have no business license, you might want to go with a middleman dropshipping company. But if you do have one you might want to go with traditional dropshipping companies since they don’t charge you any monthly fees. Either way, take note that once you have signed up with someone you’re going to need to be somewhat creative in how you market the company’s wares. Do it right and you’ll get rewarded tenfold. Do it wrong and you’ll lose out on your dreams.
A Good Drop Shipping Relationship Can Make Your Business Prosper
Posted by Wholesale News in Bulk Drop Shipping, Drop Shipping, eBusiness on May 12th, 2009
Ecommerce and internet retailers are a multi-billion dollar industry, and growing right along with the internet businesses are the drop shipping companies that get the products out to the customers. Establishing solid relationships with companies that will drop ship for you is critical to the success of your business, and finding just the right drop shippers can help your business grow and prosper.
Finding drop shippers begins with knowing what products you want to sell on your website. It will be helpful to stay within a particular product genre such as computer parts or office supplies, but it is extremely important to create a list of the products you want to sell in order to find the right drop shipping companies.
Once you have established a list of the products you want to sell your next step is to decide on which manufacturers you would like to have on your store. At this point you are not worried about the ability to get the products by certain manufacturers; you are simply putting together an outline for what you would like to sell on your site.
Once you have your list of manufacturers it is time to get on the phone and make some calls. Always start your search for drop shipping companies with the manufacturers because if the manufacturers do not drop ship the products themselves, then they will supply you with a complete list of drop shippers that you can talk to.
When you are talking with a drop shipper there are many questions you need to ask and a few things you need to check out as you are investigating whether or not you want to do business with them. The first question to ask is if they blind drop ship. Blind drop shipping is when the drop shipper sends out the product to your clients, but your company name appears on all of the paperwork. Using blind drop shippers will allow you to rightfully claim that you ship from several locations from all over the globe and it can help your company seem a lot more formidable.
Another question to ask is if there is a minimum order size for each drop shipment, and if there are any extra charges that apply to smaller orders that do ship. If there are any restrictions on smaller orders you will have to pass those restrictions on to your customers, and the same goes for any charges associated with smaller orders.
Something that many internet retailers forget to ask is how many different shipping companies a drop shipper deals with. If you are dealing with selling products to businesses, you may find that certain clients can only accept shipments from certain carriers. It sounds like it is a strange way to do business, but you want to be prepared to handle any customer request and offering multiple shipping options is definitely a request to consider.
Finally, it is important to check out the customer service department of any drop shipper you are planning on doing business with. Call them and ask to speak to someone about their customer service policies, and then see if those are policies you can work with. The connection between you and your drop shipper is of no concern to the client, so if your business is held up by a bad customer service department then your business could suffer.
The Successful Handling of Drop Ship Returns
Posted by Wholesale News in Bulk Drop Shipping, Drop Shipping on May 12th, 2009
Drop shipping could be a very nice advent for retail companies that save time and money when distributing orders to their consumers. There is one downfall to the availability to this option and that is product returns. Product returns can be routed back to the manufacturer, but restocking fees and return shipping fees may need to be covered by the retailer and can become costly with defective products and normal returns. There is, however, some simple ways to combat this nuisance of returns that any online retailer can put into use.
Customer Rerouting
There are two simple ways to go about customer rerouting. The first requires you to receive the package to make sure the product are not open and that it can be packaged and shipped to another customer that wanted the same product. The second requires a risky but useful return label that sends the package to the next customer in line. If the previous customer opened the product or used it, this method may prompt negative feedback or customer complaints that cost even more money to send replacements and the like. This is an effective way to save money on costs for restocking by redistributing them to other customers and keeping everyone content with customer service at the same time.
Reselling and Clearance
Having the items routed to your office can easily be a way to make extra money for the items carried in your store normally. They can be used to make listings on eBay or Craigslist or be listed on a personal site for sale at a discounted or clearance pricing. This is especially useful when the item has been opened and it is not suitable to be sold as new, but simply discounted or repackaged as “refurbished” for people who do not mind products previously owned but restored.
eBay has become a major buying and selling outlet for unusual, unique and used products and people are willing to pay near retail price and even more for certain popular items. Even if the product has been opened or has never been used, they can fetch a variety of values depending on how well they fare on the auction market. This is similar on Craigslist or other types of classified listings for products and services and can usually be sold at near retail price. These options certainly reduce the costs of restocking and can even bring in more money than they were intentionally supposed to through retail in many cases.
Personal resale on personal sites or directly through retail is possible when listing as clearance at reduced price. Many consumers do not mind having items at clearance pricing, especially if it is usable and has minimal damages. This is even more common when popular products are returned in working condition for whatever reason but cannot be resold otherwise. Small aesthetic flaws can make a product unsatisfactory for one customer, while another customer will only care that the product functions correctly. Having individual listings for used merchandise is also helpful to list what may be wrong with the product and advise potential recipients about these flaws to prevent second or even third returns.
Getting Pictures of Drop Ship Items for Your Online Store
Posted by Wholesale News in Bulk Drop Shipping, Drop Shipping, eBusiness on May 12th, 2009
Drop shipping is one of the most profitable means of getting products to sell in an online store. It allows you to have many items without having the need for storing or warehousing items, and it gives you the ability to have many different items without actually purchasing a quantity of them up front. When putting a drop ship item on your website or other merchandising site such as eBay it is best to have a quality picture of the item. Customers like to see what they are buying before they invest any amount of money on it and since they can’t be there in person to physically touch or inspect it like they could in a traditional brick and mortar store, a picture is the next best thing.
For that reason it is wise to have the best pictures you can manage. It is possible to use the stock photo of an item listed on a drop shipper’s website. However that only gives you a very limited picture that is usually not of the highest quality. A better way to achieve a good presentation is to actually purchase one of each item you are planning to offer for sale. This is still a very cost effective way of beginning an online sales site but having the item on hand gives you several benefits.
The first benefit to buying one item of each piece of merchandise you plan on selling from a drop shipper is that you will be able to actually inspect the item for quality and performance. The biggest benefit to a single purchase is that you can take your own pictures. You can photograph each item from a variety of angles, open it up if it is packaged and show it in various positions. You can even come up with unique methods of visual marketing such as creating videos showing the product(s) much like the infomercials you see on TV. Having pictures that are exclusive to your site will set your site apart from others. Be sure to watermark your images before they are taken from your site and used on other sites.
There are many creative things you can do to showcase each item and they are easily accomplished with today’s digital cameras, many of which can produce video images as well. Going the extra mile to get the best pictures will pay off in the long run with heightened customer appeal that produces more sales.
If you cannot afford to purchase the items, the next best step is to visit the manufacturer and take pictures of the items. You will be more limited in how you can take pictures. You won’t be able to take them out of their packaging, or create interesting videos, but you will still get higher quality images, and will be able to take a variety of shots at different angles to give your customers a better idea of what they are getting from each product. Plus visiting manufacturers is a warm welcome that strengthens your vendor relationship.
Using these tips will help you get the most out of your drop shipping experience and be on your way to a profitable business solution for online merchandise.
How to Choose a Drop Shipping Company
Posted by Wholesale News in Bulk Drop Shipping, Drop Shipping on May 12th, 2009
Drop Ship Bulk Quantities
It stands to reason if you want to maximize your income from a sales oriented website you need to be able to sell more than one item at a time. This can get very expensive if you have to purchase merchandise. It becomes cumbersome if you have to find a place to store all of those items too. You either end up with a room bursting at the seams with product, or you have to rent warehouse space to store it, and then hope that it isn’t stolen, spend hours every month inventorying it or paying someone else to do the job. If you have real dreams of being able to produce a livable income from an online store it helps to have more than one item to sell too—so multiply all of the above by tens or hundreds.
There is an answer to the dilemma of product cost and storage—drop shipping. There are wonderful companies online that have all the merchandise you need to start a full-sized web store offering a wide variety of products and you will never have to actually see the merchandise first hand. In fact, you won’t have to pay for it up front either. Drop shippers make starting up a web-based storefront easy, fast, and best of all affordable.
How to Choose a Drop Shipping Company
Look for drop shippers with both quantity and quality. You need a drop shipper that has a wide variety of items that you can sell on your sites but they must also be of decent quality so that customers are happy with their products.
Look for drop shippers that have a broad spectrum of articles in various price ranges. Your online customers are likely to be from varied income levels and having something for everyone is the fastest way to get the most sales.
Look for a drop shipper that does not put their name on packaging. Most drop shippers will allow you to customize a shipping label and packaging so that items look like they are coming directly from your store, not their warehouse. This is important so your customers feel like they are purchasing directly from you, not being directed to someone else, or feeling like they’re being pawned off on a different company.
How Drop Shipping Works for You
When you select items from a drop shippers catalog of items you then place those items in your store and mark up the price to reflect your cost and desired profit. When you complete sales make sure shipping is added to the price of each item. Your drop shipper should provide exact specifications regarding the costs of shipping from their site so you can determine what a good mark up is.
Use pictures directly from the drop shipper’s site to show items in your store. Customers will never know you do not have the items in your possession.
You can decide how you want to market a drop ship item. You can either invest in a store front with shopping cart that is drop shipper friendly or develop an eBay store as well as other online auction type stores. Usually the best method is to combine multiple methods of marketing your drop ship items for maximum exposure. Using companies like eBay to attract customers to your store’s website is another valuable method of getting traffic to your drop shipping store.
Drop shipping is a very efficient way of getting the most out of your online selling experience and starting out on the way to financial success.
Pump Up the Sales Volume: Bulk Drop Shipping Instead of Retail Drop Shipping
Posted by Wholesale News in Drop Shipping on April 20th, 2009
We’re seeing drop shipping e-business boom all over the digital world. Ebay stores, Yahoo! Stores, even private e-commerce web sites– who doesn’t love a business model with very low risk and easy maintenance? As a drop shipper you don’t have to store any inventory, hold very low overhead (if any), and just concentrate on advertising your popular items and providing great customer service. Eyes go wide when e-business owners realize orders come in and ship out without any interference or work from them!
But why only drop ship retail goods in ones and twos when there is an entire business to business market willing to buy in bulk? There are so many headaches in drop shipping at retail prices to an end consumer. An initial problem is finding retail customers in the first place. The Internet is an instant cost comparing tool– if your wholesale feed is available elsewhere on the web you will be competing in a race to rock bottom prices. With so many web retailers drop shipping in similar circumstances, there is just no wiggle room in the price to entice customers and keep e-businesses in the black.
Once you have a retail customer buying from your drop shipping web site, rarely will an end consumer want more than one item. Therefore, retail drop shippers are forced to carry the higher end products just to make a profit. Higher end wholesale products come with hefty shipping fees, either due to weight or value, and end consumers are conditioned now to expect free shipping on most orders over $50. No big deal, you will just lose shipping costs out of your profit margin right?
What happens when the customer also expects impeccable customer service by demanding a return? You’re now wasting man hours on resolving the issue trying to avoid a return– one that is completely reasonable to the customer but completely unreasonable to your business. The customer doesn’t like the color of the item, it doesn’t look right, it arrived too late as a gift (because they ordered it at the last minute) so they bought something else, or any other excuse in a long list of worthless complaints. Bottom line the product works, but the customer doesn’t want it anymore. Now, they not only want a refund on the order, but you are also stuck with the shipping costs of getting the item back.
Retail drop shipping only one or two items per order means each transaction is typically smaller than a business to business bulk drop shipping order. This is a problem for any e-commerce merchant as transactions have costs. There are administrative costs, whether it’s your time or an employee’s, fees from banks or Paypal, shipping costs, and insurance and business operations costs as merchants protect themselves against fraud. As a retail drop shipper you just can’t compete with any low priced single items available at a store.
So how can we make selling a $1.00 kitchen spatula work in a drop shipping model? Easy, sell them in case lots of 20, 50, or even 100! Where the retail drop shipping market is very over-saturated with every person able to buy and sell on eBay, the business to business (B2B) market is still in need of quality bulk drop shipping web properties. Wholesale vendors and even direct from the factory suppliers are usually too busy to trifle with selling on the Internet. But they’re more than willing to take your orders if you are willing to develop and run the web site and deal with the customers!
Or it may be smart business move for the wholesale supplier to protect their prices by selling through a third-party: YOU! There is so much that goes into pricing a durable good– how many is the buyer purchasing, what additional items will the buyer also procure from the same company, how often is the order to be filled? Large wholesale distributions don’t have the time or expertise to deal with smaller business buyers. Bulk drop shipping for B2B purposes protects wholesale suppliers from selling goods on various complicated contracts at the same price.
If you’re a drop shipping e-business owner used to only thinking retail, you’re probably wondering who on earth will buy from a drop shipping web site specializing in business to business? Easy, tons of people! Here are just a few:
1. Small Brick-and-Mortar Retail Stores
You know these as specialty stores or “Mom and Pop” companies. Often these are the small stores in malls or shopping centers. These business owners can’t afford to run around town to gather business inventory, they have a shop to run! Buying direct from a big time wholesale distributor doesn’t work either as they usually only need a case lot of two of an item in the stock room.
2. Swap Meet, Flea Market, or Online Auction Sellers
Even in a booming economy, there are always those customers looking for a bargain. They can be found at local public swap meets, flea markets, or bidding at online auction sites. The small business owners running these stalls or virtual auction houses need inventory to sell! Take a local trip to the flea market and give out information about your wholesale business to business website.
3. Offices, Nonprofits, and Charities
Most of these entities use a super store card or bulk membership to stock the break room, office supply closet, or any other needs. The employee responsible for buying in bulk at the local mega store will be thrilled to just point, click, and ship directly to the office!
So why don’t all of the online business men and women running retail drop shipping web sites diversify into business to business (B2B) transactions? Some don’t even know the market exists; others don’t want to take on a completely different web property. There is a saying “If you always do what you’ve always done, you’ll always get what you’ve always got.” There are eBay and Yahoo store owners out there satisfied with their e-business earnings and dealings. They don’t want to rock the boat.
History has shown truly successful business men and women are always after that next mountain top so to speak. Running a B2B bulk drop shipping e-business isn’t any more difficult than a retail one. In fact, it so much easier in many ways. A business customer is usually more reasonable to deal with than an individual end consumer. B2B customers are repeat customers, eventually little effort is needed to bring in new customers. Compare that to one-time retail customers you have to replace with other first-time customers! Orders are also larger on a B2B bulk drop shipping site, meaning more profits per transaction. B2B bulk drop shipping is just a better e-business investment by far.
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