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The Online World of Drop Shipping When it comes to options for making money online, you would be amazed at the number of ways this is possible. One that many people are still not aware of is called "drop shipping". When done right, drop shipping is a fun and lucrative means for making money. Okay, so what is drop shipping? In summary, drop shipping is when shipping of merchandise comes directly from the manufacturer to the purchaser instead of a distributor. Your role with drop shipping is to market the merchandise. For instance, if you were to scour eBay stores, you would find many companies selling high-end, new, or large quantity items. This might be someone who focuses specifically on kitchen items such as coffee makers, deep fryers, skillets, bread makers, toasters, and so on. Typically, you would notice the items are available in a variety of colors, sizes, styles, and the seller has multiple items of the same kind for sale. However, most drop shippers would sell one brand, although they can sell multiple brands of the same item too. Let us say you were working with a drop shipping company that sold thousands of different merchandise items. You would pay a minimal fee, usually between $10 and $50 a month to be a member of that site. Then, you would use your own personal website or an online auction such as eBay or Amazon to list their items for sale. You would use the stock photo and description provided by the drop shipping company. In addition, the drop shipping company would provide you with the suggested retail price so you would know the price needed to make a profit. In this case, you might choose to sell a variety of power tools. If you had a chainsaw that you wanted to sell, you would look at the manufacturers suggest retail price or MSRP, again provided by the drop shipping company. If that price were $250, then you could list the chainsaw for $250 and above. The interesting thing about drop shipping is that you do not actually exchange any money with the drop shipping company. Instead, they list the amount they would need out of the sale for that chainsaw. For instance, if they needed $200 and the MSRP was $250, then you would likely start the bidding at about $250 or more. If the chainsaw were to sell for $275, the drop shipping company would take their cut from the customer's payment, leaving you with a profit of $75. As far as shipping, you do nothing since the chainsaw would be shipped directly from the manufacture, wrapped neatly and ready to go to the buyer. However, you also need to know the cost to ship that item, which would also be provided by the drop shipping company, thus becoming your shipping price. Drop shipping takes a little bit of learning to become proficient but when done right, it is a great way to make money online. If you have an item that the drop shipping company needs $200 for but you end up with a major bidding war, meaning the final price stops at $400, you would have just pocketed $200. Obviously, the key with drop shipping is choosing merchandise that will move and merchandise that will fit into the majority of people's budgets. Actually, drop shipping is fun but it can be challenging. The good part is that all you do is serve as the intermediary as far as advertising. This saves the drop shipping company tremendous money, while also allowing you to earn a nice income. |