Posts Tagged Home Based Business
What is drop shipping and can I use it? Part Two
Posted by Dan Blacharski in Bulk Drop Shipping, Drop Shipping on June 30th, 2009
One of the primary benefits of drop shipping that many newcomers fail to recognize, is that you can increase your product line with different drop shippers who offer different products, and often with different countries of origin. In this way, drop shipping can be a real boon. But it depends really on knowing your drop shipper, and going the extra mile in cultivating drop shipping relationships, whether they are local or international in origin.
And therein lies the negative in drop shipping for the online retailer. You have to make the effort to cultivate those drop shipping relationships–there’s really a lot more to it than just signing up online and picking products from a catalog. If you simply drop ship with someone based solely on the convenience factor, you might find yourself without product or even worse, you might find yourself without a drop shipper at all. This happens as a result of one of two things. First, if you are without product for a long period due to production delays (which will happen regardless of source, by the way), it means your drop shipping source didn’t tell you he was running low, or you didn’t make the effort to inquire as to his projected inventory or production that would affect your product lines. If you cultivate those relationships, drop shippers will tell you in advance when things are getting dicey, and they might even tell you without your inquiry. Always keep up to date on your product. Always.
Second, and even more importantly, drop shippers who have cultivated relationships with you might tell you if they are going out of business. Think of the drop shipper as your friend: a friend will tell you before he goes out of business when things are out of control, whereas the general public will not get notice until the business is already liquidated and gone. When you cultivate these overseas or local relationships, you can save a lot of headache for your business, and you can keep your product and cash flow running smoothly because you know what is coming down the road that others might not get wind of until it is too late to do anything.
Seeing the hurricane and watching the weather reports can save a world of pain long before the hurricane ever comes ashore. Take it from someone who has seen the hurricane and prepared, and from someone who didn’t plan for the coming storm and paid the price many times over.
How Tradeshow Attendance Can Fuel Your Business
Posted by Alex in Home Based Business, eBusiness on June 30th, 2009
If you’re in the business of wholesaling or an integral part of the e-commerce industry, then you’ve likely shown your face at a few tradeshows far and wide. Despite the type of product that you’re manufacturing or selling, there is almost definitely a tradeshow devoted to showcasing and highlighting your spin on an otherwise “common” product. From furniture to area rugs to tools, cookware, lighting and everything in between, many manufacturers and wholesalers set up shop in a dedicated showroom several times each year to demonstrate the value and versatility of their particular product offering.
Because product communities gather to market their updated lines and new additions a mere handful of times each year (generally quarterly), it can be a pivotal time for wholesalers and retailers alike to be caught up to speed in regard to product categories that are likely to experience significant growth trends. By attending tradeshows, you allow yourself to pick and choose from the best of the best in order to seek out a selection of products that will likely propel your overall business sales.
In addition to viewing fresh product first-hand, tradeshow attendance allows you to network with other industry professionals. Here is where you can not only catch a glimpse of product designs and ideas, but where you can also converse with experts and gain insight into styles and patterns that can positively influence your current or future product offering. These perks alone will enable you to effectively determine what is and what isn’t working for your target audience, and then allow you to capitalize on ways to capture potentially lost sales. Perhaps a particular manufacturer has designed a product that could work with a few modifications – use this opportunity as a chance to revitalize your product offering so that you can garner the interest and attention of a particular sector of your audience.
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Further, tradeshow attendance can be instrumental when it comes to branding. Getting your name out there in markets that are generally already quite saturated can help your cause significantly. Introduce yourself to prominent market players and try to solidify partnerships that boast the potential to drastically assist your brand or your goals. Showing legitimate interest in your business and in your competitors can help you to stand apart from the rest. Respect your competitors and allow their successes to aid yours. Don’t be short-sighted, look at how past mistakes have affected both your business and the industry as a whole, and work to remedy these issues.
Tradeshow attendance is critical to the overall success of a given market. These venues help to spark new ideas, new partnerships, and new market players. Wholesalers are generally looking for credible retailers to help them with their sales while retailers are seeking the same benefit. It’s this type of mutualistic relationship that enables product markets to effectively and efficiently continue to grow and develop over time.
Selecting a Wholesale Product Category
Posted by Alex in Home Based Business, Wholesale, Wholesale Sources, eBusiness on June 30th, 2009
While the business of wholesaling can result in tremendous profits, there are a number of factors to consider prior to simply beginning your company. From surveying and understanding your potential market to weighing cost factors and margins to finding a product niche that suits you and your competitive needs, there are a plethora of elements to analyze as you get started.
With so many product markets seemingly becoming increasingly over-saturated, it can be challenging to find a niche that has the bandwidth to accompany yet another fresh, new idea. However, this shouldn’t deter up and coming wholesalers from overcoming potential obstacles. Do your research and get a firm grasp on your competitive landscape. Closely monitor what competitors are doing, including concepts that have worked as well as those that have not. See if you can modify any of the less successful ideas and transform them into top-selling products. Investigate ways that will enable your line of products to stand apart from the rest. Understand what your target audience is looking for and how you may be able to modify existing products so that they more effectively appeal to your consumer base.
Does a particular product category boast more potential in terms of margin, revenues, and profits? If you’re fortunate enough to have the option to choose among several various product categories, then profit margin is what you should use as your determining factor. Because it can be difficult to differentiate your product offering from those of competitors, you’ll want to ensure that you’re earning money with the items that you’re able to sell – particularly with those items that virtually sell themselves. Further, ensure that your total costs are significantly less than the amount of which you can realistically sell a high volume of product.
While you may not be able to create a totally unique product, it’s important that your offering boasts distinct features unique to your mission. Find products that can be and distributors that are willing to drop ship so that you can reduce your overhead costs. Moreover, ensure that there is substantial demand for your products and services. If there isn’t a distinct market need for what you’re hoping to sell, then cut your losses immediately, and develop an alternative business plan. Adding a new facet to a standard, convenient product can add to its resale value.
Despite your specific financial goals, it’s important to understand your market before you move forward with developing your business plan and just jumping into a product category. Make sure that you can identify potential pitfalls and drawbacks and immediately strategize ways to prevent these issues from affecting your future successes. Perhaps most importantly, refrain from spreading your resources too thin. While you may see potential in selling a vast variety of products, it’s best to start with one targeted niche and to work on expanding from there.
What is drop shipping? Part One
Posted by Dan Blacharski in Bulk Drop Shipping, Drop Shipping on June 29th, 2009
Drop shipping has garnered quite a lot of attention over the past few years, presenting an easy way to become an Internet retailer. Is it just another get-rich-quick scheme? Multi-level pyramid deal? Flash in the pan? Not really. Like anything, you do have to put some energy into it. When you first consider the concept of drop shipping, it seems remarkably simple. You don’t have to carry any inventory, and you don’t have to do any shipping. You just put up a web site, send the orders to the drop shipper, and collect the checks.
Well, it’s not really that easy, folks. Successful drop shipping involves successfully doing two things: Making a good product selection, and marketing. On the product selection front, it’s easy to just load up everything the drop shipper has to offer into your virtual catalog, but a more effective method is to create a niche for yourself—specializing in one particular area. Don’t try to be everything to everybody, because the customer will just get lost. Specialize in one area and position yourself as the expert in that area. On the second front, marketing—again, it’s easy to just put up a web site, but will anybody see it? How many web sites are out there today? With no marketing, again, it will get completely lost.
That said, drop shipping can be an effective management technique, especially for handling inventory.
Drop shipping, for the uninitiated, is a form of inventory control whereby the retailer sells his items to the customer, but instead of having a supply of the item on his shelves for immediate delivery, the retailer orders his items directly from the manufacturer or the wholesaler, who then ships them directly to the retailer’s customer. In this way, there is no need for the burden of carrying inventory. The retailer still retains his profit margin as a difference between the wholesaler’s or manufacturer’s price and that of the retailer.
Often, the final customer never knows that the retailer is drop shipping his merchandise because the retailer chooses not to disclose this up front, thereby hiding his inventory control from view. There are several ways to hide the drop shipping from customers. The best way to do this is to have the manufacturer or wholesaler ship the product with the retailer’s name and logo on the packaging slip.
The benefits are obvious: no inventory means less cost can be passed on the retail customer, and the retailer retains positive cash flow throughout the entire process. The potential downside is that it may take longer for the customer order to be fulfilled, since it’s going through a third party, there may be a backorder that the retailer is unaware of, and the retailer’s markup will not be as high as if they were sourcing, warehousing, and shipping the product direct.
In part two of this article, I will explain a few of the positives and negatives of drop shipping in more detail, and how the retailer who drop ships can benefit in the end. To be sure, there are negatives to the drop shipping idea, but they are manageable if you know how to navigate the drop shipping maze.
Choosing A Niche For Your Wholesale Business
Posted by Bob in Bulk Drop Shipping, Drop Shipping, Home Based Business, eBusiness on June 25th, 2009
If you’ve been thinking about starting a business that uses wholesale suppliers to drop ship products to your customers, make sure you don’t miss the first, and most important step. You need to decide, in the beginning, what niche you want to choose for your business. The niche you choose will impact everything about your business, from the wholesale suppliers you choose to the type of marketing plan you decide to implement.
You see, an entire market is too broad for all but the largest of companies to try to take on. For a small business, especially one that’s just starting out, it’s best to divide the demand in the market into smaller, more manageable niches. By operating your wholesale business in a specific niche, you can focus your efforts on a specific type of buyer who’s looking for certain specialized goods.
One of the most important components in choosing a niche for your wholesale business is doing a market survey. You need to do a market survey in order to understand what products are being sold in a niche, as well as the areas that your competitors are already entrenched. By taking a look at the market, how much product is being sold and who is selling it, you can figure out where you belong. Ideally, you’re looking for an arrangement of factors including price, service, quality and product type that will maximize your sales while facing the least amount of direct competition.
You also need to consider your own interests and abilities when you’re choosing a niche for your wholesale business. For example, if you have no interest whatsoever in consumer electronics, it probably isn’t a great idea to start a consumer electronics drop ship business. The fact of the matter is that your desire and passion are a key element in being able to see your business succeed. Choose a niche that you know something about, and that you have some interest in.
As you go through the process of finding a niche, try to avoid thinking only about wholesale suppliers and costs. You might be able to buy products at a wholesale price that’s extremely competitive, but if you can’t find someone to buy those products or you can’t effectively market those products, your business won’t succeed. In addition, low wholesale prices also mean that your competition probably also has access to that kind of pricing, meaning you’ll have to find another area, whether it’s service or marketing, in which you need to offer something to your consumer that your competition can’t offer.
Why Your Drop Ship Business Needs a Business Plan
Posted by Bob in Bulk Drop Shipping, Drop Shipping on June 25th, 2009
Many people who enter the drop ship business do so with plenty of motivation, but with very little in the way of planning. The fact of the matter is that a drop ship business isn’t all that different from any other business, in terms of what it takes to succeed. One of the most important steps in starting a small business of any type is to develop a solid business plan.
It’s important, first, to understand exactly what a business plan is. The business plan is a document you create that defines the goals of your business, and that outlines the procedures your business will follow in order to achieve those goals. A business plan is essential if you need to raise capital for your new business. In addition, the business plan acts as something of a blueprint in the areas of management and finance for starting up a profitable business venture.
Why do you need a business plan to start a drop ship business? A business plan does several things for you. As we mentioned earlier, it helps in the process of trying to raise capital. Any investor that you want to ask to help your business get off the ground is likely going to want to see a solid business plan before she lays out that capital. This is especially important in the drop ship business realm, as many investors may not be entirely familiar with what a drop ship business is or how it works.
A good business plan also helps you know where you’re going. The business plan should include, for example, financial projections. It should be able to project when the business will go from becoming a start up business to actually becoming profitable, for example. While a business plan isn’t a magical crystal ball able to tell you what happens in the future, you can use the business plan to identify at what stages the business truly starts to make money.
A final area that a business plan can help your drop ship business is in the area of the market. Part of what goes into a good business plan is a market analysis. This allows you to identify your competition from the start, and figure out how you can get an advantage over the competition. A solid market analysis is essential to knowing whether or not you can expect your drop ship business to succeed, and how soon you can expect it.
Drop Shipping Wholesaler Tips for Retailers
Posted by Bob in Bulk Drop Shipping, Drop Shipping on June 25th, 2009
One of the best way for retail establishments to expand their offering of products is to utilize drop shipping wholesalers. Utilizing drop shipping wholesalers also helps the retailer to reduce their on-hand inventory, thereby lowering some of their overhead costs.
For a retailer to make effective use of drop shipping wholesalers, you need to first understand the process. Drop shipping is a different sort of business process from traditional retail sales. In a drop shipping arrangement, the retailer markets the product, collects payment for the product from a customer, and then orders the particular item from the drop ship wholesaler. The wholesaler then ships the supplier directly off to the customer.
The profit margin is different when you’re using this type of process than with the traditional retail supply chain. Your profit on any given product is the difference between the amount that you collect from your customer and the amount you pay the drop ship wholesale company. You don’t hold inventory, and you are not involved in the shipping process at all.
One of the great benefits to this arrangement is that it doesn’t require a large cash flow. The retailer is paid by the customer before they have to purchase the goods . In a traditional retail arrangement, you have to purchase the goods prior to being paid by the customer.
One of the key components to success is choosing a reliable, reputable and dependable drop ship wholesaler. There are several ways you can find a good supplier. You can start with your current list of vendors, and see if they offer drop shipping. You can also go directly to the manufacturer, to see if they drop ship. An online drop ship wholesaler directory is one of the best places to find reliable suppliers, as the directory does much of the legwork for you .
It’s also important to choose your product or products wisely. You should use the same kinds of criteria for selecting drop ship wholesale products that you would use when you were finding products for your retail stores. You want to choose a product that will be on demand, and you need to choose a product that you can sell at a profitable mark-up.
You’ll also need to plan for returns and other customer service problems. While some drop ship wholesalers will handle returns, many do not. These issues are easier to deal with when someone walks out of your retail store with a product, but become more complex when using a drop ship wholesaler. Make sure you know the supplier’s policies in regard to returns before you commit to doing business with them.
Find Great Drop Shippers And They Will Come
Posted by Bob in Bulk Drop Shipping, Drop Shipping, Wholesale, Wholesale Sources on June 25th, 2009
The success of your business relies, ultimately, on how good your drop ship supplier is. If your drop ship supplier is completely unreliable and provides products that aren’t of a sufficient quality, your customers are not going to be satisfied and your sales will drop like a lead balloon. Knowing how to find the best vendors is integral to the success of your business.
Before you can find the best drop ship suppliers, of course, you need to know what products you are going to sell. You need to figure out what products are in demand, an what products you can sell at a profit. It doesn’t hurt to also have a good idea of how saturated the market is for those products, as high competition usually means smaller profit margins.
Once you have selected a product, you need to start looking for a vendor. Finding the right best drop ship supplier can be a challenge. Fortunately, there are some shortcuts you can take. For example, one of the best ways to find a vendor is through word of mouth. You can talk to other small business owners, for example, who may be able to make recommendations. Obviously your competitors may not be able to give you this kind of information, but you might be able to get it from people selling products in a niche that’s similar to yours.
Another great way to find the best drop ship suppliers is through a directory. There are many online directories of drop ship suppliers. Of course, not all of these directories are the same. Some are more current than others, for example. Some are more extensive than others, too. Choosing the right directory is key if you’re going to be able to trust the information in that directory.
You may also be able to find drop ship suppliers at trade shows in your niche. Most market segments have some form of trade show or another, whether it’s a regional meeting or whether it’s something on a much larger scale, such as the E3 Electronics Expo that takes place in Las Vegas each year.
Ultimately, the success of your online business relies heavily on your drop ship supplier. If you have a good drop ship supplier, it doesn’t guarantee that your business will be successful; however, if your vendor is unreliable, your business is almost certainly doomed to failure.
Drop Shipping – Beware of Scams
Posted by Bob in Bulk Drop Shipping, Drop Shipping on June 25th, 2009
Unfortunately, one of the realities of the world we live in is that there are scammers out there who hope for nothing more than separating you from your money, and who offer nothing in return. This is as true in the world of drop ship wholesalers as it is in any other type of business. Whether you’re just starting your drop ship wholesale business or whether you’re considering changing suppliers, knowing how to avoid drop ship wholesale scams is essential.
The key here is being both cautious and skeptical. Regardless of how well designed a website is, for example, it could be a drop ship wholesale scam. Just because you’re more comfortable looking at a larger, well-designed site doesn’t mean they’re any more legitimate than the poorly-designed two-page site.
In this regard, one of the most helpful resources you can have is a drop ship wholesale directory. A reliable directory will not only help you to find wholesale suppliers, it will help you to weed through them. Some directories offer reviews of specific suppliers. Other directories have a feedback sort of rating system set up that allows members to rate the various suppliers. In most cases, the vendors listed in directories are free from wholesale scams because the directory is able to weed out the scammers.
You can also do some legwork on your own. For example, a reliable wholesale supplier will be able to provide you with a street address and a phone number. Look up the street address, to make sure it’s legitimate. Call the phone number, and talk to the supplier directly. Make sure you also check the phone number and address online, to verify that there aren’t reports of the business scamming people.
Word of mouth is another great way to weed through wholesale suppliers and avoid scams. You can talk to other business owners about their experiences. Find out what wholesale suppliers have been reliable, and which ones haven’t been as reliable.
You might consider checking with the Better Business Bureau, as well. While not every company has a listing with the Better Business Bureau, you can bet that companies that are scammers have probably had complaints filed against them. In some instances, you might also be able to check with the attorney general in the state where the wholesale supplier is located to see if there are pending cases against the supplier.
Trusting Your Wholesale Drop Ship Supplier
Posted by Bob in Bulk Drop Shipping, Drop Shipping, Wholesale, Wholesale Sources on June 25th, 2009
If you have a business that relies on wholesale drop ship distributors, then you know how important it is to choose the right one. It’s your reputation that goes on the line with each sale, and every customer that is unhappy with the product sent by the wholesale drop ship distributor is, ultimately, unhappy with you. To insure the success of your business, there are some things you need to keep in mind when trying to find the right vendor to deal with in your business.
One way to find a wholesale drop ship distributor is with a simple web search. You simply put in the name of the product that you want to sell and then put “dropship” or “wholesale” after that product name. However, this is one of the worst ways to find a distributor. When you find a vendor in this fashion, you do so without any context. You have no references and no information from previous customers. All you have is whatever the company says about itself on its website. This information is limited, at best.
Another way to locate wholesale drop ship distributors to work with is by checking out online classified ad sites. Sites like Craigslist often have ads for these kinds of companies, as well. Here again, your frame of reference is limited. Unless the company is involved in an outright scam and has been banned from the online classified ad site, you again have no way to know how reliable they are.
Word of mouth is one of the best ways to choose a drop ship distributor. The difficulty here is that you don’t always have access to someone who’s dealt with a given supplier. Other businesses who are selling the same products as you probably aren’t going to readily give you supplier information. You can, of course, get information from businesses who deal with a supplier in a related niche, in hopes that the supplier will also have products that you’re hoping to sell.
An online directory of drop ship distributors is often the best way to go. With a directory, you are able to compare drop ship distributors side by side. Many directories offer a ratings system, so you can see what other customers’ experiences have been like. Make sure you choose a directory that is reputable, and that has all of the specific features that you’re looking for.
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