I got so many great comments and emails on last weeks post on how to maximize 4th Q and questions galore about drop shipping and what it means and how it works…….so you ask, and I answer!
So what is Drop Shipping?
This is usually when a website displays your product for sale, but does not buy and stock it in advance. They sell it "like" they have it in stock, but in reality, they send you the order and have you ship it. What is so great about drop shipping? I like that other people are marketing and promoting your brand while you are doing other things that require your attention. Be sure you have done your due diligence in reference to the merchant – be sure you like their website, feel it is the right place for your product line to be sold, and I'd be sure to check out their marketing techniques and be sure you are satisfied with their business practices before you sign on the dotted line.
This relationship can work out nicely if you up the charges a bit. What I am saying,is that instead of offering them the items at wholesale plus shipping (follow your shipping standards) you add on 25% of the wholesale price as a handling fee to cover your costs of shipping out one item at wholesale.
For example: Let's say your item's wholesale price is $10 x 2.5 = $25 retail. You would require them to pay $12.50 wholesale ($10+25% of wholesale + shipping) as the “fee” for doing drop shipping. The website retailer will usually email you an invoice to put in the box.
I advise you to have the merchants credit card on file (see sample of drop shipping guidelines from my company) and charge their credit card for the item + shipping, before you ship directly to the customer. If you use a fulfillment house this 25% extra usually covers the fees involved so it doesn’t eat into your margins. If you are shipping yourself then you just made extra money! Go out and celebrate!
There are tons of websites that do drop ship programs……even Saks.com does a HUGE drop ship program!
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