A lot of people on the Internet have drop-ship agreements with certain manufacturers and warehouses, but that doesn’t mean there isn’t room for a few more. There is a world of difference between making an item and making an item and also selling it. If a company is going to make an item and ship it to a retailer, why not ship it directly to whatever address you give them? Basically, a drop-ship agreement is where you do all the selling and handle all of the customers and deal with the money exchange and the manufacturer ships whatever you purchase to wherever you want. This eliminated the need for you to invest money in product or space to house product.
This is a great way to make a living online. You are just managing the website, the sales and customer base. You never even have to see the product and you most certainly never lay hands on it. Think of it like being an independent sales representative—only your portion of the job is completely virtual.
This is exactly ‘passive income,’ you have to input order entry, market your website and handle customer relations. It’s a job any way you slice it, but depending upon the amount of business you want to do and what kind of niche you’re working with, the job can be as demanding as you want it to be.
There is no beating the lack of overhead, that’s where brick and mortar retailers really suffer costs. No rent, no huge electric bill, no uninspired employees to pay just to stand around, no need for a cleaning service, and so forth. It’s just you, juggling orders entered on the website. You manage, and that’s it. No need for a business loan to buy inventory and build a shop, and no risk of surplus goods sitting around tying up your money. You won’t make quite the same percentage margin, but you can reach a greater audience and expand your territory in a way you can’t in a building.
The most difficult part is going to be marketing the product(s) you wish to drop ship. You have to keep traffic coming to your site and no doubt there will be competition for drop-shipping a lot of goods, especially the lucrative ones. So, you’ll have to stay on top of your page rank and positive traffic. This is why it’s a good idea to arrange multiple websites and for drop-ship business in different areas of product, so you can backlink and market each website through a network that you control.
Affiliate marketing is a great way to make money, but seeing as how you’re only providing a little bit of the service, you only get a little bit of the profit. With drop-ship arrangements you do more of the work, but the profit margin is higher. A lot of companies encourage drop-ship arrangements and make the process very simple since they’re already doing it with several other website e-retailers. If not, it might be worth approaching someone about going into that kind of business with you
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