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Three Important Tips Regarding Drop Shipping
There are two items needed prior to being accepted as a reseller for any wholesale or distributor source when you are setting up your business name and retail license. The first is to choose a general business name. Click this link for the simple step-by-step details on where and how to do this. 1. Set up your business name or DBA (Doing Business As) to apply to almost any business. Examples: "Netbiz", "Netecommerce", "ABC Co" "Destiny Productions". Don't limit yourself to a single business category. You can have multiple ventures and websites under one master business name. Some sources for drop shipping state they will sell only to a specific reseller type, and if you have a general business name you can instantly become what they need. For example, if you choose Pat's Flowers for your business name and you would also like to sign up with a computer and electronics wholesaler you probably would not be approved. 2. When you fill out the simple one page form to become a reseller or drop ship agent for the company, you will be asked for sales projections. I always recommend that you estimate on the high side of potential sales, as it will get you a lower discount rate. It is, however, important to be within reason. Extremely high projections may cause you to lack credibility with your new source. Remember, this is a partnership! 3. After you place some initial purchases with the new supplier and they see that you are a valid customer, you can move to the next step. (Many people who sign up to be resellers never purchase a product to resell, so you must establish yourself.) At this point, request to speak to a sales representative and ask for lower pricing than the standard resale prices listed - be tactful! If they will not budge, I then ask what the price breaks would be if I purchase in quantities of 50, 100 or 500 units of the product. The representative will give the quantity breaks, and this gives you a reference for what the profit margin in the product is Example: You purchased digital cameras from the supplier for $39/ea., which is the reseller price. When you inquire about price breaks in quantities of 10, 50 and 100, the sales rep gives you the following prices: 10 cameras - $35/ea., 50 cameras - $33/ea. and 100 cameras - $28/ea. That means that the bottom price of the camera is $28. It has been my experience that if you call a sales rep at the end of any month they are willing to cut deals, even on smaller quantities, to hit their sales goals. By finding the bottom line sales price of the products you purchase earlier in the month, it is possible to obtain the lowest volume discount level on products while only buying a fraction of the quantity.
ABOUT THE AUTHOR
Written by: Jason James
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