Drop Shipping – What is it and who are Drop Shipping Companies / Wholesalers?

Hey guys this is Anton here from drop ship lifestyle .com I’ve just created this video to answer the question I’m sure most of you have.. which is “what is drop shipping?”, “who are drop shipping companies and suppliers and wholesalers?” I’ll cover all of that in this video and also explain some common drop shipping scams so that you don’t fall for them in the begging if you’re just getting started out with this business model. So lets get right into it. What is drop shipping? Drop Shipping is a form of business which typically involves selling products online while holding no physical inventory yourself.

So you are selling physical products online but they’re not warehouses by you. We don’t buy them in advance. You’re selling them for other companies. These items can be sold on Amazon, ebay or on your own website. On your own website is where I prefer, it’s where the most money is and that’s what I advise others to do as well. Drop shipping is also a way to get started with selling online with no investment. Again, you’re not buying this inventory so there’s no need to lay out capital when you’re just getting started.

Drop shipping companies are typically available for every niche but you want to watch out for common drop shipping scams which I’ll get back to in a little bit. So who are these drop shipping companies? In my opinion there’s basically two types. There are private brands and these are the type of company that we want to sell for because they do not sell directly to the public. They only work with retailers like ourselves. Their job themselves is not to sell to the public. Their job is to sell to retailers and their job is to build their brand up. To increase their brands value. So how do they do that? They enforce price controls and the most common example of this is MAP. MAP stands for minimum advertised price. If the supplier enforces a MAP policy it means you can not advertise one of their products lower than that price that they give you.

This does not just go for you, it goes for everyone of their retailers so this is a great way to increase profit margins because noone is going to selling the same item for less than you. What you don’t want to sell for are these middlemen suppliers. What they do is basically just advertise that they drop ship (that’s how people find them). They send you a price list and then you can make up your own price basically and sell at whatever price you want which sounds great but it’s not.

It’s an easy way to lose a lot of money because your competitors can be selling at a 5% profit margins just to increase their sales and all that does is saturate a market and make it worth it so you definitely want to stay away from these type of middle men suppliers. So how does drop shipping work? To start you get approved with a drop ship supplier. This supplier has at least one warehouse located somewhere in your country. In my case that’s the states that’s where I’m and that’s where I do business and that’s where they keep their inventory.

Once you get approved for an account you get a price list from the drop ship supplier. You can then upload their products onto your website and start bringing in sales. When a customer buys from you on your website you then buy from your drop ship supplier. You basically collect money at retail (what the customer pays you) and you pay wholesale (your price to the supplier) the supplier ships the item directly to your customer and everybodys happy.

It’s a win win situation. So what are some drop shipping scams and how can you avoid them? Well like I said earlier any company that charges you to become a members and any company that advertises that they drop ship I stay away from. The reason I stay away from these companies is that I’ve been drop shipping for seven years. I’ve started multiple seven figure business and I’ve never once paid for a drop ship account. I’ve been approved for hundreds of accounts noones ever asked me for money upfront. They want to do business with you because they think you’re going to bring them more business in terms of sales, not because you’re going to pay them for a membership. So stay away from these dorp ship directories. They also advertise to thousands of money hungry retailers. So all of these niches are saturated. Everyone that joins is going to selling in the same niches, contacting the same suppliers, and really what the worst part is is that they don’t enforce pricing policies like I spoke about earlier.

So you’ll have those people making those 5% margins and you just won’t be able to compete with the marketplace. It’s just not worth it. Another thing that does not work is drop shipping on eBay and Amazon so you don’t want to try either. The reason is real supplier don’t allow it (they don’t want their products on those marketplaces) it lowers the value of their brands and they also have no pricing controls / no inventory control so if you’re selling on Amazon you want to control your inventory so if someone places an order you can ship it.

If you don’t you’ll get negative feedback and you’re account will be messed up pretty quickly. So I do not recommend advertising on ebay or Amazon. One because of profit margins and two because of no inventory control. So stay away from those two marketplaces. I do advertise on Amazon but I don’t sell on there. So how do you make money drop shipping? This is exactly what I do and what I recommend that everybody else that wants to make money in this business does as well. The first step I have is niche selection. I find what types of products sell well online when drop shipping. The second step is market research; I find out if there are drop shipping companies available in my niches. The third step is create my online store. Fourth is reach out and get approved with drop ship suppliers. So then i show them the store I built and I start getting approved for accounts – I upload their products. Step five is optimize for conversions. I use certain tricks and tactics that make customers as likely as possible to buy from me once they find my website.

The next step is getting those customers in the door – generating traffic. I put my traffic sources in place and start bringing in those customers. The last step is business automation. I use some tools online that make my business basically run itself. I still work about 2 – 3 hours per day but I have my business basically on autopilot. So if you want more information on this process please reach out to me and contact me. The website is dropshiplifestyle.com. Again my name is Anton Kraly, I’m the founder of this program. Any questions, please contact me guys. I look forward to speaking with you..

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