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    Dropship and Wholesale Distribution
       January 6th, 2008

    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.

    Are FREE Gifts Really Free?
       January 6th, 2008

    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. 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!

    Dropship Sporting Goods
       December 29th, 2007

    Dropship Sporting GoodsThis is a story from our case study series. The case studies section grows with every passing week and it is a good source for persons who need some practical tips from those who are experienced in this business: find info on relations with merchants, customer service, traffic sources, advertising costs and channels, etc.

    The new case study is intended for those people who believe that they can set up reliable and long lasting relations with dropship merchants and not for those online entrepreneurs who are certain that dropship business is scam.

    Sportmen Express For Sale: Established Sporting Goods Website PR3

    • URL:
    • Established: 17 Nov 2004
    • Uniques/Month: 20,660
    • Page views/month: 60,794
    • Monthly Revenue: 5,000 average
    • PageRank: 3
    • Listed: 28 Dec 2007
    • Winning bid: $17 500

    Sportsmen Express offers a large selection of camping gear, hunting gear, firearm accessories and law enforcement equipment.

    I’m selling for the sole reason I do not have time to take it to the next level. 95% of the business is totally automated and you don’t have to do anything, it’s that 5% customer service that I don’t have time for. We are partnered with a Sporting Goods supplier that “blind” drop ships all of our orders. If you’re not familiar with the term, blind drop ship just means our supplier put our company information on the package so the customer has no idea it wasn’t shipped by us.

    Please note that if you want to continue selling sporting goods from the current supplier, you must set up an account with them. This requires a Retail Sales Tax Certificate and setting up an AHC Direct Debit account with them. I will provide serious buyers with the contact information.

    In August 06 we invested 20k to have the website completely redone with many automated features to help us manage the business and promote the website. Active Media ( the company that did the work and SE is listed on their featured projects portfolio. The website is php based and runs on a linux box with Apache.

    Website Features:
    Sends Confirmation Email to Customer & Admin when order is placed.
    Sends shipping confirmation email when order is shipped.
    Google Base/Froogle Feed generated and uploaded weekly. (15,000 products in Google Base)
    Sitemap generated weekly (over 19,000 pages indexed in Google)
    Auto Out Of Stock Notification- Customer can request to be notified when an item is back in stock, website sends email automatically
    Ability to send promotional emails to customers (3500 customers listed in database)
    Ability to set up discount codes & promotions.
    Setup customer groups for discounts.
    New products automatically downloaded into database from supplier.
    Apache Rewrite installed so all keywords are in every products url.
    Ability to set keywords, description for each product for SEO.
    Website has a Forum, but is currently turned off due to no time to control the spam.

    Many more features that I will be happy to show a serious bidder via phone call guided tour.

    We currently do around $5-6,000 a month in sales with ZERO advertising. Profit runs around 15%-20%. You have the ability to set the markup for any single item or category to whatever you want.

    The website runs on a VPS server though for $89 a month. There is an 800 number I will tranfer to you through that usually runs $30 a month if you want it. SE has a Yahoo Directory subscription that is paid until July 08 ($299).

    Potential: If your savy at website promotion and know how to drive traffic, this website has a ton of potential. I never promoted the phone number on the website as I wasnt available to take phone orders. If you put the phone number in the footer and had someone available to take calls, sales would increase dramatically. I have received numerous emails from potential customers saying they didn’t buy because they couldnt find the phone number.

    We do not have a BIN in mind, though would like to at least get back what we invested in the websites makeover.

    Also included in this auction is the domain name, which just redirects to

    Revenue Details:
    The website currently does around 5-6k a month in sales on average. December blows that out of the water with 10-12k but that is not the average. Our profit margin is between 15-20% which can be adjusted to any level. With no advertising profits are around $600-1000 a month after expenses.

    Traffic Details:
    90% of the traffic is organic from search engines, 85% is from Google.

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


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