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    Products to Sell on the Internet: What to Choose?
       February 19th, 2008

    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.

    Shipping “Agent”: How to Avoid Middlemen
       February 18th, 2008

    Do you think that using a drop shipper is a good way of selling products on the Internet? In fact, it is. The scheme is very simple: the supplier will send the products to your customer for you from his warehouse. You never deal with those products physically yourself. Your task is to place the images of the items on your web-site and set prices for them.

    Everything else is done for you. A client comes, chooses a product, and sends you order. You contact your supplier and redirect the order to him. You get the money – your client gets his purchase. Simple.

    Nevertheless, there is one thing in this process that you have to watch out for – middlemen.

    Some companies will try to pass themselves as true wholesalers (or Drop Ship suppliers which is the same in this very respect) in reality not being ones. These are companies who do not have their warehouses or manufacture goods- they are just putting the money of your clients in their pockets. They act as dealers between REAL wholesalers and salespeople like you.

    Dealing with middlemen usually causes 2 major problems:

    1. They charge money from you. It can be charged in any shape like, for instance, weekly/monthly/annual fees. Remember, when you deal with real wholesalers you don’t have to pay any fees.

    2. Middlemen create incredible competition. Just fancy, a middleman (sometimes called an “Agent”) signs up with one or two real drop ship suppliers. Then he advertises himself as a wholesaler. Dozens of people over the Internet see the advertisement and decide to sign up with this “wholesaler.” What happens next? You and dozens of people just like you sell the same products from those 2 real wholesalers. The competition is sky-high.

    Now let’s find out how operates an average middleman:

    1. An agent searches the Internet and finds a few suppliers who are ready to work with him.

    2. The contact the suppliers saying “Hi, we are here to help to increase your revenues. We have developed an ultra-new order system. ” A great majority of wholesalers are prepared to such kind of bull-shit, but some of them will agree to collaborate.

    3. The agent creates a web-page claiming he is a true wholesale

    4. Small middlemen as a rule have one small group of products to choose from. When you order one of these products they contact the true supplier and send the product to you

    5. Huge ones create an impression of being a solid wholesaler. They pretend to have dozens of warehouses where you can order all the required products. But the scheme of work is just the same: when you place an order, they contact a real supplier and make him send the product to you acting as a middleman.

    If fact, this is not a scam and it is almost legal. They work on your inattention and ignorance. They create an image of serious business being a bunch of enthusiasts who earn money on you.

    So, beware of middleman and remember: no matter what dithyrambs agents are singing, a route to a product through a middleman cannot be a shortcut!




    Dropship Consumer Electronics (Plasma TV’s, Home Audio, etc)
       February 16th, 2008

    This new case study goes so deeply into the detail how to run and market dropship business that it can be applied as a sort of dropship manual.

    a. Choose your products to dropship
    b. Test the market for sales potential
    c. Develop a fully automated profitable online dropship business

    Electronics Ecommerce Website for Sale.. Over $300,000 in sales in 8months. 100% DropShip. Very Easy to Run.

    Averages $13,000 in sales per month. 30 Distributors, 100% Dropship, Minimal Work.. Fast Growth.. 100% Natural Traffic..

    URL: starmarkelectronics.com/
    Established: 29 Apr 2007
    Uniques/ Month: 6,000
    Page views/ month: 331,975
    Monthly Revenue: 13,000
    PageRank: 2
    BIN: $75,000

    Description:

    This website sells consumer electronics, plasma tvs, computer components, home audio and cctv cameras, accessories and equipment. There are currently approx 22,000 products in the store and approx. 30,000 images. It is based on a VERY popular open-source shopping cart. However it has been extensively upgraded and all upgrades were documented. It can be upgraded even more. There are INCREDIBLE possibilities and growth with this site.

    * It has not been seo’d
    * I have only paid for about $100.00 in Google Adwords..
    * There are approx. 10 different shopping comparison sites that the site could be advertised on that would literally make it a $3,000,000 Million business within 6 months with a moderate marketing budget.

    All potential bidders please re-read the last sentence. I have already done very extensive research into marketing the site. With a very moderate budget. This business will do $3,000,000 Million plus before the end of the year.

    We are not getting a ton of traffic, however we maximize each visitor with a clean site, fast loading pages, live chat, toll free numbers and a vast selection. On some days we are doing 4% and 5% conversion rates… Which for online retail and especially for consumer electronics is a very high percentage?

    All Distributors will be provided… Getting accounts is very easy and the sales reps are great. I have approx. 30 distributors that are all multi-billion dollar distributors. They inventory on average approx 50,000 products each. There is MINIMAL product knowledge needed because most customers have already researched the products prior to coming to the website. They usually call to see how many you have in stock… Inventory levels are controlled by distributor’s inventory levels and are updated daily. Same distributors for Amazon, buy.com, walmart,bestbuy, tigerdirect and newegg.

    The plus to having multiple distributors is that you have lots of product availability and you can ship out of warehouses that are close to your customer.

    Prices are very competitive to competition but there is still a comfortable net profit on products. Average net profit is 20% per product.

    Not many customers call. Maybe a handful. Most email and chat or just buy directly. I have included some detailed monthly financials stats are included..
    * Please remember that it is not often that electronics websites are sold..

    Reason #1- The barrier to entry is not easy.. Distributors are hard to locate initially, inventory feeds are nearly impossible to hand-input. Site-design for electronics websites is fairly complicated.. Its better to buy an existing electronics web-business that is already growing.

    Reason #2 – Profitable electronics websites are bread and butter.. They keep making money on their own and they grow really fast..

    Reason #3 - Not many electronics websites are profitable because they focus on low-prices and low margins.. I focused on product know-how and having a great selection. There is an opportunity to expand to 100,000 skus but I will leave it the new owner.

    Notice on the financials that we did over $300,000 in sales.. However if you notice.. We only authorized and charged $116,000 in sales. Reason*** Some days there were so many orders coming in that I could not handle them all because I had other obligations (work, family). Not to mention a new marriage and the birth of a child… The new owner would be able to increase revenues just by processing the orders.

    The total of $300,000+ is the total number of Transactions.

    $116,000+ is the total number of transactions that were processed and shipped..

    There are so many areas to expand the site for free (eBay, Amazon, buy.com marketplace ect.)

    Growth is not difficult.. Many times corporate customer order thousands of dollars on an initial order and then return for additional order of larger volume.

    Why am I selling.. I was offered a position w/ a fortune 500 company that would leave me no time to even operate the business.. So its forcing me to sale..

    Uploading products is very easy..

    - On a shared server you can upload approx. 2000 products at a time
    - On a Dedicated server approx 25,000 at a time.

    Editing products is very easy. You can upload online from the backend or download a csv file, edit , then re-upload. A good seo could take this site very very far. There has been no linking, or adds to directory.

    I will transfer:

    Domain name, emails, list, customers, website, data feeds, list of distributors.
    Fraudalent Credit cards are a minimum. maybe 1-2% per month. There is a script in the backend that shows if an order is fraudulent

    I am starting bidding at $65,000 which is a reasonable price considering the rapid growth that it has had, documented revenue, free search engine placement and the continued revenue and growth it will continue to have. Also, site has had zero paid marketing. I will show buyer where I advertise for free that generates sales. I will show buyer where to advertise for paid placement to explode sales.

    The site handles uploads to datafeeds automatically.
    It would cost more than $65,000 to start this business before your first sale.
    Also I will provide the buyer where I purchase the datafeeds for about $300.00 per month. This information alone is worth $10,000.

    Why?

    Cnet channel (owned by cnet.com) is the company that provides walmart, tigerdirect.com and a few other heavyweights with their data, images, and specs for products. They charge $85,000 just for 1 year of datafeeds and images. We only spend a fraction of this per month

    This is a real business and an opportunity to take over a thriving business that has not even seen 1% of its potential. Please keep in mind that we only processed $116,000 in sales out of a possible $300,000.00

    Below is the sales breakdown for Online Sales Only. Does not Include Phone orders.
    Actual Processed Website Sales BreakDown:

    June 2007 – $5163
    July 2007- $8261
    August 2007- $1265
    Sept 2007- $15380
    Oct 2007- $9992
    Nov. 2007 – $7804
    Dec. 2007 – $19934
    Jan 2008 – $19741
    Feb 2008 – $3995

    Second Profit. Margings are on average about between 18%-20% of monthly sales … On more high ticket items ($500+) .. profit is approx. 20%-23%.. The reason that the site enjoys such healthy profit margins is because I negotiated very good prices with my distributors, plus we specialize in some harder to find items so we can make more on them…. There is Minimal Fraud on the site just because the system flags any suspicious orders. I would account less than 1% total monthly sales to fraud.

    Tax Id for distributors. Yes its required. But they are easy to get. And free. You can go to irs.gov to get one..

    Revenue Details:
    Approx. 90 percent of the orders are online orders and the rest are telephone orders.. Revenue is increasing on its own. All it needs is some paid marketing to see the full potential..

    Revenue has statisticly been on average 20% of monthly sales. I will post actual monthly sales in a few.

    Operating Costs
    .

    Hosting is $15.00 with Hostgator.com (very reliable, with tons of bandwith left)
    Marketing. ZERO. I havent paid for marketing in over 70 days…
    800 Number – $25.00 per month
    live chat – $10.00 per month

    Individual Monthly Profits for transactions that we processed…

    June $980.00
    July $1569.00
    August $478.30
    Sept. $3,076
    Oct. $1898.00
    November $1638.84
    December $3986.80
    January $3751.00
    February.. Not finished yet..

    UnProcessed Documented Monthly Sales

    June $550.10
    July $3,976.37
    August $ 11,026.70
    Sept. $ 42,239
    October $ 8,866.50
    November $ 6,090.39
    December $ 84,198.35
    January $33,856.72

    Traffic Details:

    google, yahoo, msn ect.

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