We get email here all the time asking us why Internet Retailers shouldn’t just buy the products they sell, directly from the Factory at wholesale.

Here, at Dropshiparea, we get a lot of mail asking why it is not possible for a retailer to contact the manufacturer directly and buy the products from it at wholesale. Really, it would be much better if you could contact the product manufacturer and buy items at considerably lower prices with no middlemen participating in the process, wouldn’t it?

Of course, it would! But…It is rarely possible in reality. Manufacturers will hardly jump at a chance to collaborate with a single retailer. Why? Let’s find out why.

Manufacturers have their hands occupied even without sales problems. Producing something is a tiresome and time-consuming process.

For, instance, first of all a manufacturer has to patent its new product, then he has to find suppliers of the parts of his product, later he has to buy and set up machines that will manufacture the item. And so on and so force.

When it comes to selling the manufactured products there can be two possible ways:

1. The manufacturer decides not to collaborate with a wholesale supplier. In this case he has to rent its own warehouse. He has to spend years establishing relation with chain stores and single retailers (in this case it is possible to contact the manufacturer directly and buy item from him at wholesale)
2. The manufacturer contacts a supplier. The supplier already has trustworthy mechanisms, contacts and thousands of stores to supply the products to. The supplier also has its own warehouses and the manufacturer can simply sell its product by the truckload.

Do you see it now? Do you really think that a knowledgeable manufacturer will try to reinvent the selling mechanism instead of using a ready one? I don’t think so.

That is why use are not likely to contact a manufacturer and buy directly from it.

Wholesale suppliers are the place every one buys from: consumers and huge corporations. You won’t be able to avoid this kind of middleman in any kind of business.

With the growing list of our case studies our readers are likely to learn all dropship business know-how from online business gurus who describe their dropship business processes in detail:

- hot product market research
- reliable product merchants lists dropshipping goods to your customers
- marketing tactics
- growth strategy

Another valuable thing in researching our case studies section is that it is possible to choose products to dropship you feel personal liking to. I mean you are free to choose what products to drop ship from a wide variety of products available from verified merchants.

I do know from my personal experience that it is not so easy as described in the above paragraphs, that it is a trial and error way, but those who have set the goal to make money online with drop shipping are likely to succeed if they assign the time and efforts required.

So, enjoy another case study and make the notes what drop shipping made easy is

Profitable, Easy to run site, 2 years old

• URL: favortakeout.com
• Established: 14 Feb 2006
• Monthly Revenue: 2,000
• PageRank: 4
• Min Bid: $7 000

Description:

All our products are provided by a drop shipper (they’re a large, very professional company). It’s free to setup your own drop ship account with them (we’ll tell the winning bidder how to do this). When an order comes in to our site, we just log on to their website, place an order, and they’ll ship it for us. They also handle returns and will refund you the price you paid them for the items when a customer sends in a return.

Work Involved:

The amount of work involved is very minimal. A few minutes a day is about all that’s needed to answer email questions and place orders on the drop shippers website. It’s also a good idea to periodically check the drop shippers website for new, discontinued, or back-ordered products.

Why we’re selling:

Our core business is web design (out loud creative), so we’re selling favortakeout.com so we can focus on our core business. We’d like to invest the money from this sale into our core business. If we don’t sell the site, we’ll still keep it going though, as it’s a great site to run (easy and profitable).

What’s Included:
Professional Custom Design & Branding
Domain Name
CS-Cart Application ($195 value) along with our customized template files, settings, etc - basically everything you need to get favortakeout.com setup and running on your hosting account
Database of products, past orders, pages, etc
Opt-in email list (currently at 162 subscribers)

Revenue Details:

Past 13 Months of Revenue (wedding favors are seasonal so we’ve included the past 13 months):

jan 08 - 577.80
dec 07 - 262.76
nov 07 - 125.87
oct 07 - 1225.08
sept 07 - 2088.32
aug 07 - 1307.45
july 07 - 3133.69
june 07 - 3935.5
may 07 - 1990.89
apr 07 - 1780.55
mar 07 - 2526.73
feb 07 - 3398.14
jan 07 - 2537.25

We can provide the winning bidder with a login to view proof of our sales.

Profit: Our profit per item is about 40% on average, but the buyer would be free to adjust the pricing of favors.

Our costs:
$20/month hosting (via Media Temple) - we were with A Small Orange ($12 / month) but recently moved to MT - they seem to be a bit more stable. Currently our SSL is not setup at MT since we just recently moved the site, so an error may be shown if you visit a secure page. Pretty much any shared hosting account should work just fine for this site.

Our time to maintain the site and process orders (a few minutes a day).

Traffic Details:

The majority of our traffic comes from search engines. Since we began the site, we’ve only spent a few hundred dollars on google/ yahoo ads, plus a couple inexpensive banner ads. With a little bit of SEO or google advertising, this site could really take off. Unfortunately this site has been a side project for us and we haven’t had the time to devote to it that it deserves.

People who sell things online are always puzzled by the key question of this branch of the market: “What to sell on the Internet?“

People do their best to come to the solution (if there is only one or arrive at some new ideas at least). Don’t think that the choice of goods to sell is a simple choice: even the most successful Internet sellers are puzzled by it. Plus we, average people, want to know what to sell online too. The thing is that even the Internet gurus don’t know for sure, and no one knows for sure. Nevertheless, there are things you can do to make your choice as close to the optimal one as possible. There are some basic rules you may follow (as a great number of successful Internet sellers do) to decide which products to sell:

• Research the DEMAND

We, at Dropshiparea, research the market thoroughly. Don’t think that it is an easy and fast process. In requires careful studying of search engines. When you want to know if there is demand for this or that product you have to find out if people search for this product. Then, when you get the results you have to categorize them according to the most popular searches and thus find out what products are in demand on the market.

• Research the COMPETITION

Do to that, you will have to study the Internet once again. To find out the competition for a certain product you have to check 2 most popular types of Internet sales: Internet stores and auctions. You have to look through a great variety of stores in order to find out if the completion is high and then categorize all the received data.

• Research the GENERAL INTEREST LEVEL

In fact if the competition for a certain product is low as well as the demand it doesn’t really mean that the product is a market failure. You may have discovered an Untapped product market. It is the nest one can find, and if you have done so, you can consider your research a successful one. Then with the help of advertising you can develop the market and later on exploit it.

• Research the ADVERTISING of the product

A few influential and successful Internet sellers advice to consider 3 most trustworthy Pay Per Click Search Engines: Google, Findwhat and Overture. You enter the name of the product you want to sell and search for:

• If there are other people who pay to advertise that product.
• What do their ads say?

If there is too much advertising the competition is likely to be high. That’s not a good thing for you

• Analyze the information

Take your time to thoroughly study all the data and make certain conclusions and decisions. Consider the following factors:

• Low demand
• High competition
• Low general Interest

In fact, you have to compare different demand, competition and general interest combinations and find the best one. I don’t say it is easy, but if you do the right choice, you might hit pay dirt.