Posts Tagged ‘drop ship’

How to Recognize A Drop Ship Scam

February 11th, 2011

“Common sense is the knack of seeing things as they are, and doing things as they ought to be done.” C.E. Stowe

Today, I want to help you do things as they ought to be done, by helping you avoid drop shipping scams. They happen all too often and ruin so many dreams of starting an online business. So how can you tell the difference between a scam and a great opportunity?

I hate to sound cliche, but gut does have something to do with it. Does it sound too good to be true? Does the reward outweigh the risk involved?  If something is inexpensive, I always ask myself, “Now what does this business stand to gain by offering this so cheap?” If you can’t think of a good answer, be suspicious.

Get as much information as you can about the offer before diving in. Also, perform your proper due diligence beforehand. It’s amazing how much information you can find on the internet just by doing a few quick searches. My Dad always jokes that if you type in a product name and then “sucks,” you can find out any problems people have with a product. Of course there will always be at least one or two sour grapes that are angry. But if you find lists of complaints, don’t do business with that company period.

If you want to check if the company has a history of problems with the public, you can check them out with these three sources:
1.http://www.bbb.org/
2.http://www.complaintsboard.com
3.http://www.ripoffreport.com.

These sites are a quick way to avoid a scam.

As far as drop shipping is concerned,drop ship directories will charge a fee because you’re paying for their directory and customer service, freeing you of the stress and hassle of finding a supplier.

If a drop ship directory offers you its directory for free, I would be suspicious. Putting together a directory and customer service to back it up is a time consuming and an expensive process. Most legitimate companies don’t just give away such valuable information. So check out the costs. Are they unbelievably cheap or outrageously expensive? If so, be careful.

If the business is from overseas, you also have a higher risk of being scammed, especially if you’re a new seller. Consider keeping your first transactions within the united states. If you do decide to do business overseas, Matt Siltala recommends that you ” . . . call your merchant account company, or bank and ask them what are the proper steps to take in order to confirm an overseas payment.”

I hope that fear of being scammed won’t make you opt out on a great opportunity to sell online. Selling online can be so rewarding and quite profitable with a little hard work. Just remember to put your common sense to work and invest in what will help you succeed; not something that will waste your money. Let’s not let the scammers rob us of what could be a great opportunity.

For more information on recognizing scams check out these websites:

http://www.allbusiness.com/specialty-businesses/home-based-businesses/3875805-1.html
http://www.smallbusinessbrief.com/articles/products/004603.html
http://ezinearticles.com/?Drop-Shipping-Scams&id=530537
http://www.ripoffreport.com/Search/GoGo-Dropship.aspx (Customer protection Site)

No comments »

Posted in How to Avoid Drop Ship Scams, Tips and Tricks

Tags:

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.

No comments »

Posted in Tips and Tricks

Tags:

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.

1 comment »

Posted in GoGo Dropship, Tips and Tricks

Tags:

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.

1 comment »

Posted in Tips and Tricks

Tags:

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.

No comments »

Posted in Tips and Tricks

Tags:

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.

No comments »

Posted in Tips and Tricks

Tags:

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?

No comments »

Posted in Dropship on eBay, Tips and Tricks

Tags:

Living on the Web

December 3rd, 2009

After we’ve gone through the rigors of setting up our dropship website, checked all the bells and whistles, and determined everything is good to go, our journey is still not quite over yet.

One of the most important things that we have to realize about life on the internet is that if you don’t diligently keep track of things, you’ll never be able to know how well you’re truly doing, and what you can do to improve your dropship website.

On a typical day, we are going to get people coming to our site.  Maybe we put out ads, and they responded and came thusly. 
Perhaps they just looked up a keyword in Google, and lo and behold our little dropship site appeared.  Many people think that so long as people are coming to our site, it doesn’t quite matter where; that would be wrong!

It is very important for us to know where our traffic is coming from, as well as what they are doing when they get here.  Are the ones come from ads staying to shop, or do they just arrive and leave in a matter of moments?  On the contrary, do the ones who arrive from the search engines typically stay longer, and go forward with purchases?  This is extremely important information, because it should be our goal to make our dropship site as efficient as possible, and we cannot do that if we do not know what our visitors are actually doing!

One of the most powerful tools to utilize in this regard is called Google Analytics.  It is a program designed to track all of that information; where are our visitors coming from?  How long are they staying?  Are they leaving and then coming back?  What pages do they go to before leaving?

All of this information is worth its weight in gold!  If, for instance, everyone is leaving when they get to our product pages, perhaps our dropship site is a bit on the expensive side.  It would be worth it, then to see if we can change things up a little bit to become more competitive.  Are they making it to the homepage, and then leaving?  Perhaps we can put more enticing offers for the visitor to stay and look around, be it with a sale, or changing the images that we have.

As you can imagine, there are tons of little instances just like those that we need to be aware of, because as the old adage says, “He who is resistant to change is destined to perish,” and never has this been more true than with our dropship site!

No comments »

Posted in Tips and Tricks

Tags:

Running the Drop Ship Gauntlet

August 21st, 2009

Throughout life we’ve all had times when we thought we could never get through the next obstacle. For some, we may feel much like that knight that has to run through that perilous gauntlet in order to claim his reward. We stand there at the head of the contraption, just staring at all the obstacles that lay before us and waiting for the right moment to jump right in.
As someone standing at the head of the drop ship gauntlet waiting for their turn to prove themselves, life may seam kind of rough. Let me tell you though, no matter how menacing that gauntlet looks, it’s worth it by the time you get to the other side and realize the accomplishments you’ve made.

Let me remind you, however, that gauntlets are only for those with the right tools. Without them, you will surely fall short of your objective, which can be fatal. Any good knight wouldn’t dare go through the gauntlet without armor just as a business man or woman should never form dropship companies without the use of a drop ship directory.

When you are standing on the platform and don’t know how you are ever going to make it to the other side, remember that GoGo Dropship has qualified experts standing by to assist you and fit you with the tools necessary for success.

No comments »

Posted in GoGo Dropship

Tags: