Dropship Daemon

Dropshipping & Wholesaling tips , tricks and lessons

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While dropshipping and online affiliate programs may appear similar from the outside, both function very differently when operated by a company:

Affiliate Progam – Another company determines what your items will be sold for. In this way, your commission potential cannot be changed.
Dropship Program – Your company decides what a product will be sold for. In this way, your commission potential is unlimited and based only on how much merchandise can be sold.

Affiliate Program – When merchandise is sold, it is done so by the company sponsoring the affiliate program. This means you have little or no control over packaging labels and much less customer loyalty is maintained.

Dropship Program – When merchandise is sold, your company has complete control over billing and invoicing. Packagig can be customized according to your business brand. Optionally, your business may even privately label some merchandise and ship it using custom-print package material! This has a significant impact on customer loyalty.


Tons of Wholesale Dropshippers ,Just verified Dropshipping Wholesalers just @ DropshipDaemon.com

Q: I have a small, organic dog biscuit company, primarily wholesaling in the Bay Area. I’ve recently had interest from several companies doing Internet business, all of whom asked if we drop ship. I assumed they were asking if I would ship directly to their customers, and I said yes. Then they asked what my rates were. This was confusing to me because we do a fair amount of shipping, and we just charge the standard UPS rates. What do I need to know about drop shipping?

– Sonoma Startup

A: Drop shipping refers to a business model where a retailer maintains no inventory, and instead asks his or her suppliers to ship items directly to customers. This is a convenient strategy for retailers, because they don’t have to pay for warehouse space or invest in merchandise that may not sell quickly. And many online retailers — especially small, home-based businesses on eBay — work this way.

But it’s a less-attractive strategy for suppliers or manufacturers like you. You’re the one who will be stuck with packaging and shipping each individual order of dog biscuits. That’s time-consuming. And you’ll be going through this effort at your wholesale price, which is presumably less than your retail price.

“Many manufacturers don’t want to drop ship, especially individual units,” said Nicholas Scheel, publisher of the Drop Shipping News at www.drop-shipping-news.com. “They don’t want to bother with shipping onesies or twosies.”

If you do want to drop ship, consider charging more than your wholesale rate to cover the time you are going to spend processing and packing orders. So, if you typically charge a wholesale price that is 50 percent of your retail price, think about setting a slightly higher charge, such as 60 percent of retail, for drop-ship orders.

There’s no single formula for pricing drop-ship services, according to Scheel. Some suppliers of large, expensive items like furniture don’t charge anything extra to drop ship. Other drop shippers charge a rate that’s slightly higher than their usual wholesale rate, but includes the cost of UPS or other shippers. Still others charge a slightly higher wholesale rate and add the UPS fees on top of that.

Just make sure that whatever price you charge covers not only the UPS costs, but your own time and labor.

Some other thing to keep in mind with drop shipping, according to Scheel:

  • Some drop shippers require retailers to send them shipping labels with customer addresses, so the shipper doesn’t have to spend time addressing packages.
  • You may want to tailor your billing arrangements to the number of drop shipments you get from a retailer. For instance, if a retailer is sending you only two or three drop-ship orders per month, you could require payment up front for each order. But if a retailer is sending you dozens of orders each week — and if it is a reputable business that won’t leave you in the lurch — you may prefer to bill them at the end of the month.
  • Some retailers may ask you to sign an agreement promising not to steal their customers. This is a reasonable request. After all, you’re getting the names and addresses of their customers, and it would be easy for you to cut the retailers out and solicit their customers directly.

Q: Sixty years after my father’s untimely death from tuberculosis in war-torn Germany, we finally fulfilled his dream of having three of his completed and copyrighted musical compositions recorded by a 12-piece orchestra. For the first time, I heard my father’s wonderful music. Now I hope to share it with other aficionados of salon music (light chamber music for small ensembles).

How can we best market my father’s pieces online? And how can we go about getting them used as scores for Hollywood films, TV, commercials, etc.?

– Inspired in Alameda

A:The most fruitful route is probably to create a Web site for your father’s work, and promote the site directly to online and offline groups of classical music lovers.

Adrienne Albert is a classical composer in Los Angeles whose Web site is a good model (www.adriennealbert.com). Her site features partial scores and audio files of her compositions. But to download a complete composition, you need to purchase it through Paypal.

Make sure your Web designer knows how to tailor the site so search engines find it when people look for relevant phrases like “salon music.”

And do your own online searches to find Web sites, e-mail discussion groups, or blogs that might be interested in your father’s music. One such group is Orchestralist, an e-mail discussion group that includes many symphony directors. (See www.orchestralist.net.)

“I put information about my first orchestral work on Orchestralist, and within 24 hours I had requests from the Pittsburgh Symphony, Virginia Symphony and a symphony in Arkansas,” Albert said. “Two of those three ended up performing it.”

When it comes to placing your father’s music in movies or TV, the odds are against you. The Hollywood music industry is extremely competitive. And you’ve got the disadvantage of trying to sell a very small body of work from someone who is no longer around to promote himself.

“This is a networking business,” said Helene Blue, owner of Helene Blue Musique, a New York music publishing company. “They will be facing competition from real composers, who make their livelihood from composing, and who are known, relied upon and constantly used. Placing new (music) writers is the hardest thing in this business, and it gets harder every day, particularly for writers of serious works.”

Your best approach to Hollywood is through music supervisors, people who are hired by film producers to find and obtain music.

You can find names of music supervisors in directories such as the Music Business Registry. “You can’t just call one. You’ve got to call a lot,” said Blue. “Try to keep the contracts nonexclusive, so you can work with two or three.”

Q: I just landed a publishing contract for my first book, which is about plug-in hybrid cars. The publisher will allow me to buy copies at a steep discount, and I plan to sell the book at speaking events and through my Web site. Will I have to pay sales tax? On the full sale price, or the portion that’s my profit?

– S.F. Auto Author

A: Anyone who is engaged in business in California is required to pay sales tax on all retail sales of tangible personal property in the state, according to the California Board of Equalization.

If you hold one or two yard sales a year, you’re considered an occasional seller and don’t need to pay sales tax. Similarly, if you sell a few books to friends, you probably don’t need to pay sales tax.

But it sounds like you plan on doing more than occasional selling. That means you need to get a seller’s permit from the Board of Equalization and pay sales tax on the full sales price of your books.

“This person appears to be engaged in business and required to register with the board,” a spokesman said.

Note: You have to pay sales tax only on sales to customers in California. So if some auto executive in Detroit wants to learn about hybrids and orders your book over the Internet, you don’t have to pay sales tax on that purchase.

Want more info? See the Board of Equalization’s Web site at www.boe.ca.gov. Look for Publications 73, Your California Seller’s Permit; 107 , Do You Need a California Seller’s Permit; and 109, Are Your Internet Sales Taxable.

Source: San Francisco Chronicle

Not all dropshippers require a tax ID and business license, but some do.  Many companies require nothing more than a name, address, and credit card on file to do business with them.   However, if you want to deal with the best companies and get the best prices, you should get a tax ID and business license.

Having a tax ID number will allow you to purchase goods from a much broader range of wholesalers and perhaps even get you lower prices than you’re paying now with the dropshipper.

I am always amazed when people tell me they would do anything to have their own business then freak out when I tell them they should get a tax ID and business license.  The process for getting a tax ID and business license is very simple: you fill out a form and you pay a fee.  You do not have to turn over your first-born and it doesn’t cost an arm and a leg, nor does it invite the IRS to monitor your every move.

It’s up to you whether you want to do this as a hobby or as a business.  If it’s going to be a hobby, then you’re probably not going to make much money and you will lose interest quickly.

If you want this to be a real business, then treat it like one and do the things required to do business in a formal manner.

You build a business. You dabble with a hobby. Getting a tax ID is not a difficult task. To get a federal tax ID just go to the IRS website at http://www.irs.gov, click on “Forms and Publications” to download Form SS-4. Fill it out and either mail or fax it to the IRS office indicated in the form’s instructions. There is no fee.

Once the IRS issues you a number, you will have to get a tax ID number from each state in which you have a business address. Again, this is a simple process that just requires a few minutes of your time. You fill out a form and pay a small filing fee. That’s it.

For a list of state tax offices and their websites, from which you can obtain the appropriate form, go to http://www.taxsites.com and click on “State and Local Tax” link.

It typically takes two to three weeks for the IRS to mail your tax ID, but if you’re in a rush you can call the IRS and get a tax ID number assigned to you over the phone.

The toll-free number is (866) 816-2065. It helps to have a completed Form SS-4 in front of you since the agent will ask you many of the same questions.

If you do business with wholesalers you may experience minimum purchase requirements, but you should not run into minimum purchase requirements from reputable dropshippers.

Your goal should be to find a dropshipper that will ship items one at a time instead of requiring that you purchase a fixed minimum number of items each time (single-unit purchases vs. minimum-order purchases).

With this arrangement, you don’t have to invest your limited cash reserves in inventory that might not sell (and that sits in your garage for months).

In a word: NO! The wholesale and dropship industries are ripe with disreputable companies that concentrate more on stealing your money than supplying you with product.

You should always ask for references and check out the company with the Better Business Bureau before signing on as a reseller.

Ask for the names of some of their current customers and references. If they refuse to provide such references, find another company to do business with. Thanks to the Internet, you can also search Google for information on the company.

There are many forums and bulletin boards now that concentrate on the dropship industry. Do a search for these forums and read any reviews on the company you can find. Beware companies with numerous negative reviews.

Ultimately the only way to ensure that a dropshipper is reputable is by doing your homework. If you don’t , you can find them all at dropshipdaemon.com dropshipping wholesalers

You would be surprised at how many people don’t take the time to do this and end up regretting it later.

If you don’t invest the time it takes to ensure that a dropshipper is reputable, then don’t be surprised when bad things happen.

Some companies that claim to be dropshippers are really what’s called “middleman” companies. A middleman is someone who positions themselves
between a true dropshipper or distributor and you the seller of the product.

Middlemen pretend to be dropshippers but are not. Most often they get their products from a dropshipper that you could deal with directly. Middlemen will eat into your profits and usually don’t offer much in the way of customer support and service. Middlemen often come in the guise of buyer’s clubs or wholesale distributors.

Before doing business with a dropshipper make sure that they get their products directly from the manufacturer and not from another dropshipper.

and of course , dropshippers in Dropship Daemon are not middlemen

You are.

Remember, your customer doesn’t know that the product they purchased from you really comes from a dropshipper.

You are their point of contact, so if there is a problem, your customer will come back to you for resolution.

That’s why it is important to make sure that the dropshipper you use has a policy for resolving problems quickly.

Most dropshippers have websites where you can view the number of items they have in stock at any given time. Those that don’t have telephone hotlines you can call to check inventory. If a company does not have a mechanism in place that allows you to check inventory, don’t do business with that company.

Before you place an item for sale you should make sure that the dropshipper has a good supply on hand. If they have several hundred of an item you shouldn’t have to worry, but if they only show a dozen or so, you should either pick another product to sell or wait until their stock is replenished.

A back order occurs when you mistakenly sell an item that is out of stock. The dropshipper must order more inventory from the manufacturer before it will be able to fill the order for the item you have sold. This rarely makes for a happy customer. The best way to handle back orders is to avoid them. Make sure an item is in good supply before you ever place a sale on eBay to sell the item.

If you do run into a back order situation, handle the problem quickly and professionally.

Contact your customer and tell him that the item has proved to be so popular that it sold out faster than you expected. Offer to back order the item, replace it with a similar item, or refund their money immediately.

Do not try to wiggle your way out of a refund if the customer asks for one. You are the seller and it is up to you to make things right. Do so quickly, politely and professionally.

Keep in mind that your eBay feedback rating might be negatively affected if you don’t take care of the situation as quickly as possible.

Inevitably you will have a customer who wants to return a product for one reason or another. This is why it’s so important that you know the return policy of the dropshipper before attempting to sell an item.

Most dropshippers have a return policy that allows the customer to return an undamaged item within a certain amount of time. There is usually a restocking fee involved, but the customer does get back most of the purchase price. Also remember that your customer will come back to you for the return, not the dropshipper. As with back orders you should be proactive and respond immediately to your customer’s request.

It may be that the dropshipper will not accept the return. It then becomes your decision as to how to handle it. If the customer has a valid reason to return the item, work out the return with them on your own. If the product is in good condition you can just sell it again.

If the customer has used the product and wants to return it in an un-sellable condition, you should refuse the return or negotiate a reduced refund amount.