The distribution of products has been on since the very beginning of the mankind.

How does this distribution work?For instance, there is a manufacturing company A that manufactures some kind of product B. The company is a big one, it has huge manufacturing areas and its products are very well known to the customers. The company A doesn’t really have time to deliver “B” to its customers. It hires a third-party “C” to get this job done.

So, “C” takes “B” from the company’s warehouses and distributes among the customers.

“C” pays the manufacturer’s wholesale price to the manufacturer as it buys the products in great quantities. This is the lowest acceptable price for both the manufacturer and distributor.

“C” sells the products to a store “D” at the price a little higher than the manufacturer’s wholesale price (i.e. if the MWP(manufacturer’s wholesale price) is $1 for an item, the “C” sells it for $1.5 for an item then the benefit of “C” for each item is $0.5). Thus buying products from “A” and selling them to “D” is beneficial for “C”.

What is the reaction of “D” to buying the product “B?” Well, if they buy an item for $1.5, they have to increase the price in order to get revenue. Let’s say “D” increases the price to $2 for an item, thus making $.05 on each item. You see, that even at this stage the price of the product has already increased from $1 (MWP) to $2 (the price of the store “D”).

This is the simplistic and basic scheme of product distribution. Simplified more it looks like that: Manufacturer – distributor – retailer – end user. All the links of the chain get their profit, because the end user wants to spent his money on the product.

Still, there is one more scheme of selling goods. So-called “Drop Shipping.” What is the basic difference between two schemes? Well, drop shipping avoids the stage of distributing products. Thus distributor becomes a retailer at the same time. At the same time, you cannot be called a drop shipper in the proper sense of this word. You are a retailer (though you don’t stock products) and the manufacturing company is the drop shipper proper.

The scheme of drop shipping

1. You open an Internet Store, with a shopping cart and the ability to accept credit cardsYou create an Internet-Shop
2. You find a manufacturer who wants to collaborate with a shop like yours. Moreover, you can find a distributor or a service that will help you find this very manufacturer.
3. You come to agreement with a drop ship supplier
4. You place the products on your Internet shop
5. A user comes to your store and realizes that he/she cannot live without the beautiful rubber bracelet you offer. They order the item. You charge the money from the user’s credit card (let’s say for $30)
6. You order the item from your drop ship supplier
7. The supplier sends the item directly to the customer
8. You pay the supplier $15 plus the shipping fee (let’s say, $2)
9. The user gets the product and you benefit on the difference from the money you charge from the user’s credit card and the money you pay to the drop ship supplier ($30 – $17($15+$2) = $13).

That’s it. That’s the basic scheme of drop shipping. You don’t have to stock items or something like that. Just let the supplier do everything for you.

A great number of services and companies over the Internet sell information. Nevertheless, a considerable part of these sites do their best to pump money from the users’ accounts without bothering to provide them with the promised solutions. They try to find or make up the most effective combinations and schemes of cheating their clients for the sake of benefit. Still, it is entirely up to the customer to trust some unworthy service or not.

Dropshiparea.com can be definitely called a trustworthy drop ship solutions provider. I won’t try to advertise its quality or anything like this. I will just say, that we are aware of almost all the ways of cheating on users, however, we do out best to inform you about the new ones that spring up almost daily. Our goal is to deliver high-quality services and help you reach your own goals. In order to fulfill that task we have gathered quite a sufficient number of authentic wholesale suppliers and working drop ship solution providers.

Still, there are a few things you need to learn about the possible frauds. The most irritable and at the same time awful thing about all this stuff is that practically always cheating looks like a genuine generosity. Just read the following tips and try to avoid making mistakes that will lead you to losing money.

One of the most favorite ways of cheating is Free Gifts. Here is some information on the issue.

Basically, there are 2 different types of Free Gifts

1. One of these types is the gifts that are given to you before you make any purchase. This very type of Free Gifts is all right. It is not the right way of cheating on the clients as the clients do not pay anything, thus there is no benefit for fraudsters. You can basically trust such type of gifts.

2. The second type is the gifts that are given to you after the sale or with the product you purchase. This type is the one to watch out for. As a rule, Free Gifts are distributed with low-quality and useless products that simply need to be backuped with something, otherwise they just won’t interest customers. In this case you have to buy something first in order to get a “Free Gift.”

Have a look at a scheme of a typical fraudster:

Their goal is to persuade you into buying their “incredible” product. This is done by all the means possible. You might be even promised to earn a fortune within 15 minutes. Remember, that the fraudsters carefully pick their words and might even seem persuasive, just don’t get fooled.

The next thing they do is promise that after you buy their product you get gifts worth hundreds of bucks. They can promise almost everything from “Free Software Solutions” to “Extra Good Drop Ship Manuals” to be given to you as a gift.

There are 2 basic reasons why you get Free Gifts only after the purchase:

1. When you get gifts as a bonus with your purchase, the fraudsters try to persuade you that you get much more than you’re paying for. But in fact you are not. The Free Gifts that come with the purchase, as a rule, are easily found over the Internet for free. Then emerges a question: why should you pay for the things that are basically free? Do not do that.

2. The gifts distract your attention from the main product. There is some kind of rule: if you want to make a user buy something lousy, give something else (louse aw well) for free. So, when you are promised the moon, be careful!

Well, what we can conclude from all this talk? I’m not trying to persuade you that all the services that promise Free Gifts are cheaters. I’m just trying to make you think before making some decision, that won’t take much of your time, but it definitely can save your money!

We have discussed not long ago the research tools and techniques to discover the products in demand to sell on eBay:

- eBay Pulse
- eBay paid market research reports
- Amazon movers and shakers
- Amazon best sellers
- Amazon new releases

Now I would like to talk about spotting buzz products. Buzz products are relatively new products on the market that get much coverage and publicity and as a result are in high demand with early adopters and other types of consumers.

A simple sample of the buzz products is Apple iPhone. Dropship Apple iPhones and you are guaranteed a nice volume of sales if you suggest a competitive price – for that purpose, you need to set proper relations with dropship merchants/ distributors and wholesalers.

How to define if a new product is hot and is likely to sell great? It is easy and hard at the same time.

Firstly, you can’t define it within one day-week – you need a system, a list of resources to read/ check regularly and make notes of those products that are mentioned again and again. It is a process that takes time and experience. Samples of such resources see above. Add to that Yahoo! and other news resources.

Secondly, you need sort of specialization and knowledge of the industry you are about to focus your dropship business. Then you add to the above observation resource list other magazines and websites to keep your eye on.

Once you have spotted a buzz product recently introduced on the market it is your task to find dropship merchant or dealers.

Easy way is to buy one of those lists of verified dropshippers.

Hard way is to make research and contact dealers directly.

If your dropship business is focused on selling buzz products in addition to a growing market demand you get another important advantage – much lower competition. Traditional consumer product niches are tightly packed with unlimited number of merchants and dropshippers and buzz products are sort of new opportunities that you should not miss.

[tags]dropship businesses, dropship turnkey website, drop ship, wholesale, ebay, e-commerce, dropshippers list[/tags]