Don't Get Taken by a Fake Distributor!
By Chris Malta
"Don't Get Taken by a Fake Distributor!"
When you're a small business starting out on the Internet, or even when you're an established 'Net business, you NEED drop shippers.
Why? Because working with drop shippers eliminates the need for you to carry expensive inventories. You don’t have to rent a warehouse, hire employees, establish accounts with UPS and FedEx, etc. You can sell the best brand names on earth from your home computer, and make good money at it.
Distributors who drop ship send the products you sell directly from their warehouse to your customer, with your business name on it. All you do it take the order from your customer and pass it to the distributor. You keep the difference between the wholesale price the distributor charges you, and the retail price you sell to your customer for.
Of course, there are a lot of places out there that want you to THINK they are wholesale drop shippers. They’ll set up accounts with, say, 10 real drop ship distributors. Then they’ll call themselves something like “GetYerStuffHere.com”, and claim that THEY are the wholesale drop ship distributor. Then it’ll go like this:
GetYerStuffHere.com will place advertising all over the Internet proclaiming to be the greatest source that ever existed for all kinds of great products, and they’ll drop ship all those products to your customer.
You’ll get all excited because YOU can actually place everything from Sony electronics to Coleman Camping gear on your web site and sell it.
GetYerStuffHere.com will charge you an account setup fee, to cover their “processing”. (Note: REAL wholesale distributors almost NEVER charge you an account setup fee ).
GetYerStuffHere.com will send you a nice, shiny list of products and show you where to get the product images and descriptions to place on your web site.
You’ll get all excited, and put all this great stuff on your site, set your prices so that you can make a profit over what GetYerStuffHere.com.
You’ll launch your site, and you hardly sell a thing.
Huh? What happened? Nobody’s buying! You can’t survive on just a few orders a month!
Disappointed and discouraged, you start to go out and check other web sites that carry the same products. Maybe they have better images. Maybe they have cooler descriptions. Maybe their pages look nicer. You find that it’s none of those things. So what DO you find?
The other sites’ PRICES are lower. A LOT lower.
You just got nailed by one of the most popular scams on the Internet.
GetYerStuffHere.com took you for a couple of hundred dollars in exchange for a CD full of product images. They may have even locked you into a contract where you have to pay them every month to be a “member” of their “distributorship”.
Oh, GetYerStuffHere.com DOES ship the products they claim to. Of course they do. It’s just that when they get an order from you, they turn around and place your order with the REAL wholesale drop shipper, and take a profit. By the time YOUR price is calculated, you’re paying not only wholesale, you’re paying GetYerStuffHere.com’s extra markup of anywhere from 10% to 30%.
In order for YOU to make a profit, you naturally have to mark up the prices you get from GetYerStuffHere.com. By the time you do that, you can’t compete on the ‘Net. Your prices are just too high.
At this point, you can do one of two things:
You can lower your prices to the point where you’re making mere pennies on your products in order to compete.
You can bypass these jokers and go to the REAL sources.
I’ve been in Systems Engineering for 18 years. I’ve been involved in ECommerce since it began. In that time, I’ve seen this scenario played out over and over with companies I’ve done work for.
The real sources can be hard to find. They don’t market themselves as Internet drop shippers. They are established wholesale companies who have been supplying big chains like Sears and Kmart for a very long time.
Many of them are now realizing that a good part of their future lies in Internet sales, and they are establishing drop ship programs. There are even a few big name manufacturers who are beginning to drop ship right from their factories. That’s where YOU need to be. In direct contact with the actual wholesale distributor or factory source.
When you’re looking for a drop shipper, here are a couple of things to be careful of:
Any company that tells you that they’ll set up your entire web site AND PROVIDE THE PRODUCTS FOR YOU will NOT make you rich. They’ll make THEMSELVES rich on your setup and hosting fees, and you’ll piddle along with thousands of other small sites all selling exactly the same things at the same prices.
(NOTE: Don’t confuse this with companies who just offer to set up your ECommerce web site. There are a lot of great places out there that will build and host sites for you. It’s when they tell you that you HAVE to sell the products that THEY provide that you should run for cover.)
Any distributor who wants you to pay a “membership” or “setup” fee is probably not a true wholesale distributor.
If it sounds too good to be true, it’s too good to be true.
Chris Malta
WorldWide Brands, Inc.
For more information, visit http://www.YouCanDropship.com.
About the Author
Chris Malta is a Microsoft Certified Systems Engineer. He has worked with computer Systems for 18 years. He's been involved in eCommerce systems, networking and site design for more than 6 years. He's taught college-level computer courses in Western NY. He developed The Drop Ship Source Directory, and he and his partners at Worldwide Brands, Inc., publish the Directory and run eCommerce sites of their own using Drop Shipping as their only business method.
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What Everyone Should Know About How To Buy Wholesale
By: Melanie Burns
Finding a supplier for the product you want to sell, at a price that you can profit from, can be a big task. The best suppliers for your online sales or auctions do not advertise their services and often cannot be found online.
Those that you can find online tend to be middle-men. It is often difficult to get a good enough price to make any real profit online.
Let me tell you about my simple 2 step system to find an untapped source for wholesale suppliers. This is so simple that it's often overlooked as a source for product. This system involves thinking outside the box and not letting policy stop you. (continued below)
The First Step to find a supplier is to find someone that already sells or has access to what you want to sell. This could be a website, an eBay seller, a manufacturer, a wholesale outlet, or a regular store in your city. This is the easy step. You know what you are looking for and you can search on the internet, not for a wholesale source, but for anyone already selling what you want to sell.
Another valuable source for a local supplier is your local phone book. The yellow pages are the best way to find local sources. This should be the first place you look. Doing business locally with someone that you can meet face to face is a big plus for your business.
Another potential source for your product is to find a distributor who would be willing to private label a product for you. You could get a very high quality product for a much lower price than if it had the name brand label.
The Second and Key Step is to convince the source you found to become your supplier.
Manufacturers and wholesale sources often have minimum orders that might be beyond your reach if you are just starting out. Online retailers, eBay merchants, and retail stores may be your best bet. Try to find a small store who is looking to expand.
But remember, you are dealing with a human being and they can be convinced to do business with you. Just be sure to sweeten the deal for them. One way is to offer the person you are dealing with at your new found source, a percentage of your profits from the products he supplies you.
Be sure to project it out for him. If he can see the benefit of working with you even though it causes extra work for him, you can be successful in making a deal.
You could offer him 20% of the profit from sales of his products. For example you could show him that you project to make at least $100 profit from each product, and you expect to sell 40 of them per month. The $4000 a month means an extra $800 per month in his pocket. You still make a nice $3200 profit for the month in this example.
On top of that, he will be ordering more products from his supplier and may be eligible for a higher price break from them. This way, his reward for the effort to work with you, is making money on both sides.
There are many benefits you can offer your potential supplier, but no matter how you look at it, the main thing it comes down to is MONEY. What's in it for your potential supplier to do business with you? If can you show him that, you have a better chance of making a deal with him and starting your online sales.
NOTE: When looking for suppliers around your city, don't go trying to impress the big stores with your $800 or even $3,000 extra income per month proposal. Try going to the little stores that are looking to expand their business, they are the ones that are usually more open to new opportunities.
The big stores are making hundreds of thousands of dollars per month in profits, so an extra couple of thousand would probably not impress them the least bit.
So now you see that by thinking outside the box, you open the door to many possibilities and increase your ability to make money online with your products.
About the Author:
Copyright © Melanie Burns
This article is free for reproduction but must be reproducted in its entirety including live links and this copyright statement. Subscribe to the iBusiness How2 Newsletter to receive hot tips, how to's, internet business tools, and relevant product reviews by sending an email to: newsletter@internet-business-how-to.com
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