March 7th, 2006
Another proof that dropship business can be profitable. This time we give you a sample of a successful international dropship site. The website was placed for sale in January 2006 at www.sitepoint.com forum. The site was sold within a short period of time.
Age of site (months): 21
Monthly revenue: $1500 profit
We have credit card processing receipts and payments sent to the supplier (in Hong Kong) for the months noted. Tracking prior to August 2005 was not done well, but data exists there too.
Monthly page views: 35,608
September 2005 – 5770
October 2005 – 5746
November 2005 – 6772
December 2005 – 6635
January (1-18) – 3242
Sources of Traffic:
Search Engines – 62.4%
Type-In/Bookmark – 16.6%
Referral/Unknown – 20.9%
The site sells a wide variety of cosmetic products, taken by a feed from the distributor’s warehouse in Hong Kong each night. The site could do much better with someone managing it full time and adding content to the descriptions, promoting via link building, etc.
It is a side project we thought we’d have time to manage, but have not. The site made $17,141 in profit in 2005 (17.5% markup on products taken as revenue).
Price (or starting bid): $18,000
Currently, we do no paid advertising for this site. We had done PPC when we started in 2004 with success, but the project lost interest to other clients and work. We don’t have any paid ads, paid links, or otherwise for the site.
Detailed Revenue Data
Month-Month (Sales) + Profits
August – ($6,263) $897.24 (we forgot to submit the Froogle feed)
September – ($15,811.50) $2358.16
October – (11,545.00) $1557.39
November – ($9,983.50) $1341.48
December – ($10,657.50) $1515.60
Avg Item Sold – $55-$65
Fees: Credit Card Processing, Chargebacks + Returns (Avg $100/month), Hosting, Checking Acct Fee
17.5% of gross sales taken as profit
The distributor is a drop-shipment house. They can ship all over the world, and we’ve operated this without hassle from Seattle, WA in the US, so you can undoubtedly run the business from anywhere. When a sale is made, an email is automatically sent to the drop-shipper, who records it and sends out the product (shipping can be a bit slow, as noted on the site). It also sends emails to the site owner (us, soon to be you :p ) and to the buyer, letting them know the order has been placed. It sends a further email when the drop-shipment house sends the site information that it has been shipped (done via a feed from the warehouse).
The drop-shipper works with many other companies, so the products are not entirely unique. It’s like a more advanced and more profitable version of an affiliate program (and you have more control). Of course, with the sale, you will get all the contact info for the drop-shipper, who’s happy to work with new owners.
We will be happy to sign a non-compete, as we have no intention of getting involved in the retail cosmetic/perfume business in the near future.
[tag]international business, dropship, drop ship[/tag]