Posts Tagged ‘Drop Ship Directory’

Separating the Rats from the Kittens

April 15th, 2011

a rat and kitten on a couchThe other night on my way to dinner with a friend I saw out of the corner of my eye an animal crossing the street from under a car. Oh, a cat  I thought. But, then I looked closer. It was too small to be a cat, so I thought it might be a kitten. I pointed it out to my friend and asked her what she thought it was. “That’s no kitten.” she said, “It’s tail is dragging behind it. It’s a rat.”

This rat was huge! It’s massive size fooled me. But as it climbed into the storm drain I shivered. Yuck! The differences between a kitten and a rat are innumerable. But the dark, the size, and it coming out from under a car like cats do, had contributed to my misjudgment.

Sometimes a lot like my “kitten” that was really a rat, deals cross our paths that look pretty common-place or maybe even appealing. As entrepreneurs we may even approach an opportunity with interest only to find out that the opportunity is a rat. It looked good, but up close was really something else, maybe even something sketchy.

This is a reminder to approach drop shipping with caution, there are a lot of rats out there.

So how do you find a legitimate company?

1. Be observant. Paying attention to details and your feelings will help you spot the rats.

Last night I was applying for jobs and spotted what seemed like a great job opportunity that paid well. It seemed too good to be true, but I really wanted it to be real. I began the application process, but using caution provided my junk e-mail address on the form. I filled out more of the form and they asked for my social security number.

That seemed like awfully personal information to be giving out on a form on a web page the looked ancient and possibly fake. Some of the information they wanted seemed to personal for a job application, so I left the site. I got an e-mail 5 minutes later that encouraged me to apply and listed an e-mail address that led me nowhere. That settled it for me. They were trying to scam me. I’m glad I trusted my gut and quit filling out the application.

Just as the dragging tail observation  made me reconsider what I saw in the street, the request for such personal information upfront caused me to question the trustworthiness of the site. Pay attention to how you feel about services and if something seems off, do some more investigation before proceeding.

2.Be willing to take a closer look. Are the costs associated  with the product or service fair? “What does their user agreement say? Thankfully most companies have user agreements you can review. Do yourself the service of scanning through it to see if anything sounds fishy. Think about the risks involved. Does it have strong enough benefit to counter balance the risk involved? What kind of profit margin exists for the product or how much will you make after you take out all the selling, shipping, and handling expenses? Does it seem fair?

There are several businesses built around drop shipping these days. There are services that act as a middleman and do almost all of the work for you, but then dip deeply into your profits to pay for their services.  Then there are complete scams that take your money and never provide a service. But there are also honest drop ship directories. These directories provide you with legitimate supplier information at a low cost. Beware of the directories that promise you information for “free.”

Look at the services a company really offers and then make your decision. You may want a middleman, but don’t pay for one if what you really want is a drop ship directory.

What is Drop Shipping?

March 7th, 2011
Drop Shipping Photo

Storing Merchandise

What is drop shipping? Can it be leveraged into a successful business?

As a senior at BYU-Idaho, I first heard about drop shipping when a successful online business owner came to speak to us. She got her start selling homemade baby blankets on eBay and then over time expanded her inventory by adding furniture. When she branched out into furniture she was nervous that she didn’t have the space to store the cribs and chairs.  With a little negotiation her supplier agreed to be a drop shipper solely for her. When someone drop ships it means that the supplier or manufacturer ships the product directly to the customer.

This drop ship deal was due to the good relationship she had built with her supplier. (since the supplier didn’t drop ship with everyone) The  drop shipper saw that she worked hard and thus was willing to put in a little extra work by agreeing to drop ship. Really it was a good relationship that made the deal possible.

Most businesses will tell you that a good business is centered around a good product. But, because suppliers largely control if you sell a product or not, it is so important to develop a good relationships with them. The truth is that for most manufacturers, drop shipping only a few items can be a hassle. Most manufacturers would prefer to sell to organizations that buy a product in bulk. But many will know drop ship thanks to relationship built with a good directory or seller.

Suppliers also control when a product gets to your customers. This alone is reason enough to stay on good terms.  After all,  quick shipping generally translates into customer feedback. And any eBay seller will tell you the value of good feedback on eBay.

But besides saving you the hassle of shipping a product to a customer, it can also help you put profits back into your pocket more quickly. You see once the customer pays, you have your entire profit right up front. You don’t have to worry about the fees associated with shipping and handling.

While it’s true you can work with drop shippers without a directory, it can be extremely difficult to connect yourself to a legitimate drop ship distributor on your own. There are a lot of scams  out there but drop ship directories take the guess work out of finding trusted suppliers. They form relationships with these suppliers so that you’ll be connected to a friendly, dependable drop ship supplier. The supplier of the woman I told you about was a trusted supplier that helped the woman expand her business from a small eBay account, to an online store, and then into a successful brick and mortar store. While  this woman knows her hard work got her the trust of the supplier, she acknowledges that her dream business could never have boomed without an honest supplier that produces quality products and ships quickly to her customers.

Do you want more tips on how to jump start your online business?

Please follow us on twitter @gogodropship or read more of our blog articles.

 

New Suppliers Added in February

March 1st, 2010

In an effort to give you more dropshipping and wholesale options and make finding a dropshipper or wholesaler easier for you. GoGo Dropship’s Product Research team has been continually collecting the best suppliers they can find for your given niche. Here are some of the suppliers that were added in February.

Northeast Coffee Company
Nantucket Brand
Swimsuits for All
Fat Brain Toy Co.
P&S Fishing Tackle, Inc.
Tire Wholesalers
Bait N’ Hook
American Recreation Equipment, Inc.
Karate Depot
Handbag Crew
Bargain Wholesaler
Dog Supplies
RMF Scrubs LLC
Allegro Medical Supplies Inc.
All Authentic Sports Memorabilia
Wholesale Gifts Direct
Sport Supply Group
Puppia International Inc.
ATAFA
Alternative Healthcare
Vitamix Laboratories

For more information about dropshipping or to sign up for a package or a free trial (no credit card required), please visit GoGo Dropship.

ID Ideas | GoGo Dropship

January 12th, 2010



When you’re an up and coming business owner, you are going to be asked about two different forms of identification: the Employer Identification Number (EIN), and the Tax Identification Number (Tax ID #). Both of these forms are for identification purposes, and used to establish that you are a member of the trade, which qualifies you to work with dropship and wholesale suppliers.


Many people do not know the primary differences between these two forms of identification, and it is often a source of confusion. With that in mind, we’re going to walk through the primary differences between the two to help clarify things and alleviate some of the confusion.


The Employer Identification Number is a Federal number, which is used to identify your business, primarily for tax purposes. It shows that you are a valid, registered business with the United States federal government, but it does not necessarily show that you are qualified to be exempt from sales tax, or anything like that. You can typically obtain an EIN number from your state government website, and it is usually available for free, or for a very nominal fee. This identification form is sometimes accepted by a supplier when establishing an account with them, but many will request additional information as well.


That additional information is the State Tax Identification Number. This is a number assigned by the state government, rather than the federal government, and its primary purpose is to prove that you are a member of the trade, and therefore do not need to be charged sales tax when working with a supplier. As the legality or necessity of sales tax is very important to a supplier, this is the the most commonly requested form of identification when creating an account with a supplier. A Tax ID number typically comes with a higher fee to establish than an EIN number, and the fee can vary from state to state. When establishing a new business, this is the most important piece of documentation to obtain, as it is almost universally required by suppliers in order to work with them.


The suppliers require this information for legal and tax purposes; if you are not a member of the trade, they can actually lose their contract with a manufacturer to carry their products, and if they don’t charge you sales tax, although they should be, that will also cause problems for the supplier. It is for this reason it is of paramount importance to get things set up legally as you move in to starting your business, or else risk hitting a wall very early on.


It takes a little time, and it takes a little money, but in the long run, it is vitally important that you set your business up correctly, right from the get go, or risk running into legal troubles down the road, which will in turn cost more time, and more money that you don’t want, or need, to spend.

Money, Money, Money | GoGo Dropship

January 5th, 2010

Going back to our hypothetical scenario, we are a new business owner who has got his website up and running, only to find that everyone out there is able to sell their same products for far less. We aren’t making sales, and things are looking dire. We’re stuck in a bad situation… but how could we have avoided it?

The answer is simple, and one that you may be quite familiar with: research! Research is our best friend in business, and in this regard it is no different. Before we build a site, we want to see how our potential suppliers stack up compared to everyone else online. If our supplier’s wholesale price is higher than what people are selling for at retail, then we’ve got a problem.

Some of you might be wondering how a wholesale price could ever stack up poorly against retail price. We’d talked previously about this phenomenon, and this is definitely one instance where we’re seeing first-hand the effect this concept has with us and our business.

Without being willing to carry inventory, our only recourse is to research the effectiveness of our supplier prior to creating a website where we will utilize them. This way if we see that our supplier will not be effective price-wise, we can turn around and look for an alternate supplier, or even an alternate niche, before we’ve passed the point of no return and created a site.

There are a few website tools that we can utilize to do this. First and foremost we have the Google Product Search, a tool powered, aptly enough, by Google that will allow us to see what people are pricing our specific item on online, utilizing the power of the Google search engine to give us a very good picture into all the available products out there. Conveniently accompanied by images, and with the ability to sort by price, Froogle is one of the easier ways to see what our competitors are pricing their same items at, to see if there’s room to be competitive.

A second resource I like to utilize is PriceGrabber. This website functions quite the same way as Froogle, but it gives us a different system for pulling their results, which in turn gives us an even more complete view of what our competitors are doing.

This is all well and good, you may be thinking, but how do we make sense of all this information? We can see the prices, big whoop. How does this help us? Are we supposed to try and see if we can be the lowest price? Do we just want to see the highest price and price our items accordingly?

Our goal in doing this research using these sites is to see where the price extremes are, both high and low, and find a median fair price. We don’t want to try to be the lowest; someone can always get a better discount than us, and someone is always willing to undercut us, even at their own peril. We can briefly flirt with being the lowest price out there, but it simply isn’t something feasible to try to sustain.

At the same time, we do want to make sure we’re not the highest. If we’re the highest, than it is quite probable that people will utilize many of the same tools that we can to see that there are cheaper alternatives out there, which they will most likely go with. For that reason, our goal is to find a fair price that lies between those extremes, and price ourselves there.

However, this is not so simple a thing as seeing where our supplier’s price is, and just gauging things that way. We want to make money after all, so we need to make sure that we are basing these numbers off of our supplier’s price plus our profit margin. Typically a new business owner should try and shoot for a 30% profit margin, which roughly translates into a $15-$20 per item profit.

This may seem like a lot of extra leg work, but if we can find out whether or not our supplier is effective before creating our site around them, we can be much more confident moving forward with the knowledge that we can be priced effectively, and expect many more sales as a result.

For more information, please visit GoGo Dropship.

Dollars and Sense | GoGo Dropship

January 5th, 2010

One of the biggest steps in finalizing your dropship website is finally mapping out the potential earnings. Its a step that is intimidating to some, but it is vital that we go through this process as a prelude to the actual creation of our site, rather than after we’ve gone through all the sweat and elbow grease to get our website up and running.

The reason for this is simple; if we do not see if our supplier or niche is going to be competitive before creating the site, we put ourselves in a very bad position if we’re now finding this out after the fact. For the sake of example, let’s say that we’ve found a great supplier that’s going to provide us with all our remote control car needs. They have a ton of available products, and they’re bursting at the seams with variety. Sounds like a slam dunk so far.

We figure that the variety speaks for itself, and the price is probably right, so we move forward, spend a few weeks making a great website to complement the supplier and the products… weeks go by, and we still haven’t seen hide nor hair of a sale. The products are great, the website is solid. Why aren’t we getting a sale?

Needing to know what we’re doing wrong, we decide to take a look at one of our competitor’s websites. Their site is pretty good; ours might be better… but their retail price is our wholesale price! This could be a fluke, we say, and we look at another site. Uh oh, their retail price is a little higher, but still lower than ours by a fair bit.

One time is luck, two times may be coincidence… so we take a look at a third site. Lo and behold, this one has followed suite; its lower than all the rest! All of these are sites we found just looking up our product. Chances are very good that our customers who are looking around can see these as well.

Now we’re stuck with a site all complete, but a supplier that just doesn’t seem to compete. We either have to market really aggressively, or cut into our profit per item; either way we look at it, the only way to make things work at this point is to take some losses, and hope for the best.

But how do we avoid this situation? There are a few techniques that we can utilize to avoid landing ourselves in such a pickle, which we will discuss in our next article!

For more information, please visit GoGo Dropship.

GoGo Dropship | Holly Jolly Holiday Happenings

December 21st, 2009

The holiday season. The holy grails of the retail experience, Black Friday and Christmas… Its a great time to be in the business, but it doesn’t come without its problems. If we’re just getting started, trying to get in on the Holiday rush is going to come with its fair share of frustration. Suppliers are quite busy, and your application, through no fault of your own, may just plain fall through the cracks while they’re rushing to try and keep their heads above water with all the inbound orders. And even if we are already set up with our supplier, that does not mean we’re home free. Things get busy, and even the best supplier can drop the ball, and put us in a bad position if we’re not ready for it.

Christmas and Black Friday are the poster children of this phenomenon, but they are not the only holiday offenders out there. Even ignoring the big ones, like Halloween, or Easter, we’ll still need to become very aware of what times are of significance to our specific demographic. If we’re selling paintball guns, is there a paintball super event that we need to be aware of? Is there a season when demand for our products is going to be off the charts? These may seem like very simple questions to ask, but many forget about them until it’s too late.

The significance to these questions is because they will have a very real and very potent effect on our suppliers’ ability to meet our orders. If we know that there is going to be a massive movement in our industry during a certain time of year, we want to plan ahead well in advance. Let our customers know there may be delays in processing their orders, make sure our suppliers’ inventory levels are high. The last thing we want to do is have a major event roll in, and have us caught entirely unawares.

Holidays or special events are always an excuse for a buyer to be a little spend-happy, and that’s a great force for us to work with to our advantage. However, we need to keep on top of our suppliers, and make sure they have the inventory and the ability to keep pace with the demand, because in the holiday frenzy, if anything goes wrong, its going to become a giant headache for everyone involved, but by keeping the lines of communication open, and the remaining inventory watched diligently, we can avoid a lot of the normal holiday frustration, and make it a happy one instead!

For more information, please visit GoGo Dropship.

The China Solution

December 16th, 2009

In our first post, we had postulated upon the problems of sourcing from China. Now, let’s talk about some of the solutions that we have to protect ourselves. The biggest thing we want to keep in mind is that the easiest way to avoid problems with Chinese suppliers is to avoid using them at all. It is very rare that a single product is going to make us or break us, so avoiding the issue entirely is by and far the safest thing to do to avoid and problems down the road.

However, if we are set on using that supplier and trying to secure that product, there are a few things that we can do to try and protect ourselves. The first main contender we have with effectively working with a Chinese supplier is getting past the logistic issue of shipping. There is the very real problem that we have to get a product halfway around the world. Our customers are going to be very impatient, and many will balk at having to pay more to wait longer. Our best recourse is to try and communicate with the supplier as to what their average shipping time and shipping costs are. They will typically be upfront about it, and it will serve a dual purpose in allowing us to see whether or not we can even speak with the supplier easily or not.

The second resource we can utilize in the great “authenticity wars” is a website called http://whatsitworthtoyou.com. This website is intended to allow us to research products and find out whether or not they are going to be legitimate or not. This is not a free resource, but for a price they will be able to help determine the authenticity of a product, which will allow you to know whether or not you can confidently and ethically sell the item on your site. Without handling the item itself, they cannot definitively and empirically make a statement on its authenticity, but we can very quickly and efficiently determine using this service if our source is legitimate. However, with a form from this site to verify that the site or product is, indeed, something that is not entirely questionable, it will allow us to list on eBay and our own site with much more confidence. It is not a bullet-proof vest to protect from any problem at all, but it is a great way to list without fear that your item is a clear counterfeit.

Our biggest concerns with Chinese suppliers will always be present; we can never be 100% sure that an item is not a counterfeit, that the shipping cost and time will not grow unreasonable, or that we’ll even be able to reach the supplier if there is a problem, but if we are very careful, it is not an impossible hope to be able to utilize Chinese suppliers. However, to quote an old food adage, “When in doubt, throw it out”: if we have good reason to think that our supplier is not legit, we are almost always going to be safer abandoning the product idea, and moving somewhere else.

To learn more about dropshipping and how it works, please visit GoGo Dropship.

The China Problem

December 14th, 2009

As we’ve worked within the wholesale and dropship sector, no doubt we’ve come across a lot of suppliers hailing from the far east… China, in particular. They offer us a glimmer of hope that the iPhone is not an unattainable dream, and maybe we can get those great Prada bags. However, as with all beautiful dreams, they do not typically stack up well when compared to the starkness of reality. When you find something that seems too good to be true, that is typically because it is.

When sourcing from Chinese suppliers, there are a few things that we need to be aware of. First and foremost, the copyright laws that we’re accustomed to in the United States do not apply to Chinese suppliers. They can market an in-house product as a name brand if they so desire, and there is nothing by their laws that has them at fault. This is what is called the “Grey Market”. It is not necessarily illegal in China, for instance, to market a non-name brand as a name brand, or to replicate an item exactly. However, we are still bound by the laws of our land, so if we’re unknowingly marketing the Chinese iPad as an iPod, it is we who will be in trouble for it. We will be flooded with returns almost immediately from our dropship website, but if we’re trying to source these counterfeit items on eBay, then we’re going to quickly find our accounts banned for it.

A second issue we run into is that the product that we’re purchasing may be coming from black market sources. Black market sales are strictly speaking illegal, and as such it will exist as an ephemeral thing. Since we are not receiving from our supplier a consistent source, when their stock is gone, it is gone, and even if we’ve placed the order, we have no assurance we’ll ever receive the order, or see the money again once its been sent.

Now, taking a huge leap of faith, if we find that the items we are receiving from our Chinese-based supplier are the real deal, we now have the logistic problem of getting it halfway across the world in a reasonable amount of time… and while still being able to maintain a profit. In recent years, tracking technology has made leaps and bounds when it comes to international orders, and we’re going to need to take full advantage of that. We will want to know where our item is exactly… because its going to be spending a fair span of time getting from the supplier to the customer. The shipping cost to allow for a more reasonable amount of time will typically be much higher than a buyer is willing to pay, and the increased cost of having to go overseas is going to eat into our profit.

The biggest thing to remember when sourcing from Chinese suppliers is that these problems lie directly on our shoulders; any instances that come up are our responsibility. eBay does not accept “I thought it was legitimate” as an acceptable excuse if we try and source counterfeit products from a Chinese supplier, and our buyers on our website also tend to be less than forgiving when their $300 iPad arrives at their door. It is our responsibility to ensure that our supplier is legitimate, but how will we do this?

Ho Ho Wholesale

December 2nd, 2009

One of the most common misconceptions when someone begins working in the dropship or wholesale arena is that there is only one wholesale price, and that is what they are receiving.  This in turn leads to a lot of frustration when one sees other people selling their same product for far less.  If they’re receiving the wholesale price, how is it that anyone can get something cheaper?

The reason for this is that the wholesale price is generally based off of the amount of product you are willing to purchase at one time.  At the dropship level, for instance, you are receiving a wholesale price, but your price point is going to be lower, because you are ordering a single item at a time.  If one of your competitors approaches the supplier, and asks if they can get a better price if they purchase ten items at once, for instance, most suppliers are willing to do so.

The strength of having a dropship site is that we are not having to carry any inventory, or do any of the shipping ourselves, but that of course comes with downsides.  Our profit margins can be solid, but if we are trying to compete price per price against a competitor, it is he who orders the most at once who will be able to negotiate the lower price.  Purchasing at wholesale is the natural evolution of our business, which is why it is important to realize that there is not any singular wholesale price, but it is instead a fluid concept, that we can use to our advantage as our business grows!