Business blog

Not having the money to stock your inventory is unfortunate because you would like to increase your income by selling other people’s products. Then there’s the chance that you may not have a lot of money for advertising but you have lots of your own product and would really like to increase your sales. The solution to both problems may lie in drop shipping.

Selling Products that aren’t Yours

You would like to sell a variety of products but you don`t have very much money. Don`t worry! Your customers will supply you with the necessary capital. Stock inventory is no longer necessary. Instead, what you can do is drop ship orders.

For example, you receive a credit card order for a product retailing for one hundred dollars plus five dollars shipping. The next thing you need to do is either fax, email, or phone your order to your dropship supplier. You pay the fifty dollar wholesale product cost plus five dollars shipping using your own credit card.

Your dropship supplier now ships the order to your customer. There is no investment in inventory so your gross profit equals fifty dollars.

Selling Your Own Products

Having more sales of your own products is what you may like to happen. If so, have you considered drop shipping your products for other dealers?

Let’s say that you have a product that you can sell for one hundred dollars plus shipping. You will have a sale of one hundred dollars each time that you sell the product yourself. But how many one hundred dollar sales you can personally make is what you need to figure out.

Now consider the situation where you offer your dealers a wholesale price of fifty dollars. It’s possible that there are hundreds or thousands of people selling for you.

Only bringing you fifty dollars in sale is each product sale and this is a sad fact. But then again, these sales are what you wouldn’t have otherwise. If you obtained these sales through traditional advertising channels, what would it cost you? Are you positive that your advertising will bring you the results you desire?

Keep in mind that with this drop shipping arrangement, you pay only for results. When a dealer retails your product for one hundred dollars, he is really receiving a fifty dollar profit for selling your product; you could view it as a sales commission. You get to sell way more than without drop shipping even if you only receive fifty dollars per product sale. You ship directly to the customer for your dealer.

So, whether you sell other peoples’ products or your own, drop shipping can increase your sales, preserve capital, and maximize business profits.