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Dropshipping - your steady online income.

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Posted 2nd April 2010 at 12:33 AM by Igor Pauer

Recently, interest in electronic goods (ebooks, courses, etc.) has been diminishing. As an experienced internet marketer, what kind of products can you expect to profit from in the future? How can you monetize your established business tools, traffic, and mailing lists?

The answer is simple: dropshipping.

What does dropshipping mean? Here's Wikipedia's definition:

"Drop shipping is a supply chain management technique in which the retailer does not keep goods in stock, but instead transfers customer orders and shipment details to either the manufacturer or a wholesaler, who then ships the goods directly to the customer."

This business model allows for the dropshipper to make a profit on the difference between the wholesale and retail price of the goods. In practice, this means they can become owners of an e-shop with a huge inventory, without having to spend money to purchase goods.

Experts agree that this is one of the most promising sectors of the work-at-home market.

This is how it worked in the past:

E-shop owners ordered goods from manufacturers after receiving an order from a customer. The owner receives the goods, re-wraps them, and sends them to the customer.
Customers often had to wait more than four weeks to receive the goods. Additionally, the business owners would be forced to waste a lot of money on postage, from the manufacturer to them, and then from the merchant to the customer.

Alternately, merchants could decide to order and stock the goods first, wait for orders to come in, and then immediately send the goods to the customer. This solution saved money on postage and significantly shortened the delivery time, but it required the e-shop owner to invest a lot of money upfront, and there was no guarantee that he or she would make a profit from goods already purchased and stocked.

Here's how it works in dropshipping:

1. You create your own e-shop and fill it with goods from the supplier (eg www.Silver.Ag/en/ offers.xml is a data feed full of descriptions, pictures, etc. automatically updated every 24 hours). The complete feed displays over 114,000 pieces of merchandise, the accumulated value of which exceeds over four million USD.

2. You promote your e-shop through promotional tools to receive orders and payments from customers. After you receive orders from customers, you enter them into the supplier system (you have your own dropshipping account).

3. The supplier will send the shipment directly to the customer. Within the shipment, there is no mention of the original supplier, making it look as though the shipment was sent directly from your e-shop.
(www.Silver.Ag/en/ has all the goods in stock and ships within 24 hours - the customer receives their shipment within 3-14 days, anywhere in the world).

Here are some of the benefits to dropshipping:

1. You don't have to worry about ordering, storing, packaging, or sending goods -- nor do you have to deal with returns and warranties. Everything is handled by the supplier, and you have no contact with the original goods at all.

2. You can build an e-shop with a huge range of goods without any sort of monetary investment. You only need to invest your time and effort.

3. The amount of money you can make is virtually unlimited!

4. Physical products cover a much broader range than digital products, giving you a better opportunity to target different niches.

5. You have direct control over the e-shop, customers, and the price of your goods.

6. You'll receive your commissions directly.
There's no waiting around to be paid by an external company or affiliate program.

Here are some solid dropshipping tips:

1. The key decision you'll have to make is selecting a suitable supplier. They must have a wide range of products. Preferably they should be a direct manufacturer and goods must continually be kept in stock. The supplier should be reliable, responsible (watch out for suspicious Asian firms) and be in business for a long time (10 years or more), with a solid offline base.

2. The supplier must provide appropriate data that updates automatically, so that you do not have to manually enter goods into the e-shop one by one.

3. Communication with the supplier must be quick and efficient.

4. The supplier should not require entry fees.

Here's a real example:

Silver.Ag has been operating in the offline jewelry industry for over 15 years. We have our own network of brick and mortar shops, we own several manufacturing factories (in 2010, we will be opening a new factory in Europe), and we deliver goods to thousands of offline retail jewelry shops around the world.

In 2008, we opened a trial e-shop: www.Silver.Ag/en/
After only a year, we became number one in online sales for the territory of the Czech and Slovak Republics. We are currently preparing for entry in other markets (USA, UK, Germany, Poland, etc).

In the Czech and Slovak Republics, we have over 100 dropshipping partners. Some of our partners make thousands of dollars USD on a daily basis during peak seasons. Recently, we began providing dropshipping to any country in the world. Entering our dropshipping system requires no entrance fee.
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