How you can avoid the three M's of drop shipping
Remember the last time you were learning to do something new and
you made a mistake? It seems everyone has at least one of those
memories. Some of us have many of them! So, wisdom has taught us
the following: When you are learning to do something new, it's
common to make mistakes. Often our mistakes are the real lessons
in life. We make mistakes because we simply do not have the past
experience to know right from wrong. We can carry this same
wisdom over to the world of drop shipping.
There are many Website owners trying to find authentic drop
shipping companies for their online retail business. An
authentic drop shipper is a supplier of wholesale products who
will drop ship single item orders direct to your customers. Our
business (www.hienotedirectory.com) is focused on researching
and publishing information about authentic drop shippers for
Internet based retailers. Our experience has taught us the do's
and don't of identifying authentic drop shippers. Let's now cut
to the chase. In finding an authentic drop shipper, it is
important to avoid the three M's. What are the three M's of drop
shipping?
(M)inimum orders (M)iddlemen (M)embership fees We are going to
examine each one of these to get a better understanding of their
meanings, and how they impact you as an Internet retailer.
Quick Lessons For Success
Okay, let's see:
- You have your website running.
- You can accept payment from customers.
- You have good drop shippers to supply product...or, a least
you are thinking you do. How do we know for certain?
As a quick check, we are going to validate the last bullet by
seeing if we avoided the three M's of drop shipping.
1. Minimum Orders. An authentic drop shipper does not require
you to buy minimum amounts of product to do business with them.
An authentic drop shipper will drop ship in single item
quantities to your customers. Sometimes, companies require
minimum orders because they cannot absorb the cost structure of
single item drop shipping. Drop shipping is generally more
expensive to do for the supplier. To offset their costs and
unload the products, they will require you to order product you
do not need. As an online retailer, you will want to avoid this
situation.
2. Middlemen. This is the classic, unnecessary, middle layer of
distribution. Middlemen, as the name implies, are the people in
between you and a drop shipper. When you place an order with
them, they order product from the actual drop shipper. Take
their slice of the profit and have the real drop shipper send
the products to your customers. They can also steal your
customers as they are getting all of the shipping and contact
information from you. At that juncture, they can send whatever
they want to your customers such as advertising with lower
prices. These folks should be avoided whenever possible. They
are taking your additional profits by giving you pricing often
close to retail. In some situations, they can also lengthen the
delivery time to your customers. Again, you do not want this to
happen. You need to ask the correct questions in order to avoid
these folks. Questions such as, 'Are you the manufacturer of the
product?" Or, 'Do you stock inventory of the products you sell?"
are good questions to ask. We even ask folks to arrange a time
for us to come visit their warehouse.
3. Membership Fees. An authentic single item drop shipper will
not require you to pay membership or processing fees. Should you
be paying someone to sell their products? No! Beware, they could
be a middleman. Avoid any membership fees or dues. An authentic
drop shipper does not require membership fees to sell their
merchandise. In some cases, we have found that these so-called
drop shippers charge membership fees for products that might not
be doing well in the market place. The supplier wants to make
sure they make money by charging 'monthly fees" as they know you
will probably be struggling to make money selling their products.
How you spot an authentic drop shipper.
Now that we have an awareness of the three M's to avoid, we can
summarize some of the rules and validations for our drop shipper
search. Our checklist of rules can begin to look something like
the following:
They will drop ship single item orders without minimum
requirements. They will not require you to pay any member fees
or monthly fees. They will offer you true wholesale pricing so
you can make a profit. They will not put any of their own
promotional materials in with your customer's order. Once a drop
shipper can meet the above criteria there are other logistical
items to consider such as the following:
They will put your company name on the shipping label. They will
ship in a plain box without any of their company logos or
information on the box. They will include a plain invoice in
with your order without any pricing. There are other items to
consider for an authentic drop shipper validation, but the above
lists can get you going in the right direction. Remembering to
avoid the three M's can prevent those costly mistakes in your
online retail business.