Wholesale Sourcing for Home Business Success

“Is Wholesale Drop Shipping a Viable Business Model
for the Home Based Micro Business?”

Are you seeking a legitimate home-based business selling goods via eBay or from an online store? Have you heard how easy “easy” money is made dropshipping wholesale goods?

Perhaps you are one of the many people who found our site through the search engines and come seeking answers to questions regarding dropshipping physical products or sourcing goods for ebay. The quest for online income has become a sort of Holy Grail among those seeking greater personal freedom and financial autonomy, and anyone hearing the stories of those who made fast money promoting Google’s AdSense program, and myriad other gimmicks and schemes may very well believe all of the Grail talk to be true.

However, a wise and successful Internet marketer once said that to be successful in business, you have to be good at business. Meaning that quick online income and legitimate home-based business success, online or offline, are not necessarily the same thing. Almost anyone with luck can make some money, but it takes business skill and knowing where the “gold” is to keep your money. In the area of Internet marketing–and business in general–it is important to understand the difference between a gimmick that makes money and a business. AdSense, for example, is a gimmick, but ecommerce is a business. In ecommerce, a key issue is product sourcing, and so one of the biggest wholesale and dropship so-called “secrets” is where and how to source your products, and that is where wholesale drop ship directories, suppliers, and distributors come in. (Find Out More)

Goods and Services

Wholesale sourcing, drop-ship directories and distributors are a vital element of the equation. Unless you are a scammer, you really only have two things to offer through legitimate home business. Goods or services (or both). If you want to offer goods, then you have a choice of physical products or digital products. Here, we are concerned about physical products, so we can either stock our own inventory and ship from our business, or sell goods that will be shipped independantly by a manufacturer or distributor. (Find Out More)

Wholesale Product Sourcing

Wholesale sources will supply our products in the first instance above, where we stock our own inventory. There is a great deal of brouha and noise about how to tell a real wholesaler from a middleman. Let’s get this out in the open right now. A real wholesale business will always require proof of a state retail sales tax permit. Any business saying or implying that it is a wholesaler but not requiring a sales tax permit from you is not a true wholesaler. The term, “middleman” or “middlemen,” generally refers to these sorts of businesses, that is, retail businesses charging discounted prices but misrepresenting themselves as wholesalers.

A moment ago we made reference to the sales tax permit. The sales tax permit, sometimes referred to as a resale certificate, is simply a license granted by your state that allows you to buy goods for resale without having to pay sales tax. Anyone can get a sales tax permit from their state of residence; it is easy to get, and generally costs nothing. So don’t fall for “middlemen” who charge a fee to help with this. (Find Out More)

A true wholesale directory will provide you with a list of companies able to source your business at wholesale prices. Even though you can do the research to find wholesalers yourself, there are some very good directories available for purchase. The best of these update their data base of suppliers on a regular frequent basis and also provide forums so that you always know what the “word on the street” is.

Now, although a real wholesale company will always require you to have a state retail sales tax permit–and you will need this if you have a true home business–don’t reject a company just because it may not be a true wholesaler. The important thing is whether or not the price is right for you to make a profit. There are also companies, such as liquidators and jobbers, who may sell below wholesale price and do not require a retail sales tax permit. Examples of such companies are sav-on-wholesale.com and liquidators.com. (Helpful Hint)

Drop Ship Product Sourcing

A drop shipper is a manufacturer or distributor who stocks the inventory and mails it out to your customer under your company name. You sell the product at whatever price you set, pay the dropship supplier and keep the difference. Some dropshippers may require membership fees, some may require minimum purchases, others may mark the price of the product up from the wholesale price. When researching dropshippers, it is important to establish whether or not the dropship price will allow you to make a profit.

Drop shipping is often touted as an easy way to sell on eBay because the dropshipper is responsible for inventory and shipping to your customers. Drop shipping is still effective, and many sellers are doing very well. However, the eBay market place is so competitive that you really have to research your product and dropshipper to verify that you will be able to make a profit. A reliable drop ship directory can be a very important resource. However, it is vital to do the research on your product, the environment in which you plan to sell, and on the wholesale and drop ship sources you plan to use. Again, the best wholesale drop-ship directories help you out by verifying the integrity of suppliers they work with.

If you are brand new to the area of wholesale and dropship product sourcing and are starting from scratch, you are at a disadvantage because you may not know how to evaluate the information you are presented with, and so you are not sure how to determine what’s good and what’s bad.

With that in mind, we do have two recommendations for you. Neither one will set you back very much, and we think they offer tremendous value for the price. Each requires a one-time only payment. The first directory, Salehoo, allows access to a list of around 800 wholesale, dropship, liquidation-closeout and other low cost suppliers. Through this list of contacts, you have potential access to thousands of products. Also available is the Salehoo forum. The forum may be its most valuable asset. You not only have at your fingertips the forum archives, but you can plug in to a very active network of other buyers and sellers. You can find out more, here:

The second directory is for those of you who know that you want to focus on media, primarily DVD movies. The Jillian Entertainment Guide is still the best list of wholesale, dropship. and liquidation-closeout DVD sources that we have yet to find. And we have looked. The price of the Guide is probably no more than the cost of a movie, drinks, and snacks for you and a date. But if you are considering selling DVDs on eBay or through ecommerce, this will give you wide range of contacts including the major studio sources and the major wholesale houses distributing to retail outlets throughout the United States. These will be the same sources used by some (not all, of course) of the eBay power sellers. Find out more right here:

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Tips for Pricing Physical Goods Shipping and Handling

If you’re running a business that sells physical goods and products, you will frequently need to dispatch your products all over the country - perhaps even all over the world. When you do this, you might pack the item yourself, or you might pay someone to do it. However you handle it, shipping and handling is an important aspect of your business, and the safety of the items you post rests partly on your shoulders, as badly packed items will often get damaged in transit.

Your shipping and handling charges are a determining factor in how competitive you will be in a niche market. Many established companies are well known for their efficiency in dispatching the product - customers trust them for their safe prompt delivery. Before you can emulate them, you need to come up with a fair pricing structure for shipping and handling as this is an additional cost paid by your customers. The costs of shipping in bulk are often cheaper than for a single item and you should consider giving your customers discounts for volume.

How do you calculate shipping and handling charges for your product? It’s relatively easy, if you know the basics. There are two components in the price:

1) The handling cost which includes packing material, labor, storage and other related costs. While this cost is pretty easy to calculate and depends only on you, the most common mistake is to use the lowest price possible for packaging materials in the shipping calculation. The better way is to find an average cost for packaging materials and then source the cheapest. At least this way you still have some room to “sharpen your pencil” if your shipping quote is too high.

2) The shipping cost which is the charge for postage, freight or courier charges. These costs are not so straight forward and you need to research courier and freight charges to many destinations around the world. Bear in mind that not all shipping charges are fixed, and with a little effort you can easily negotiate an agreement with your shipping company.

Shipping and freight companies usually charge based on the weight and volume of items, the distance they are going to travel, and how quickly you want them to get there. Large volume or weight deliveries carry a premium price tag, while smaller and lighter ones cost less. If the destination is within your country, the shipping charges will be rather small compared to sending packages abroad. If you need urgent goods to be delivered quickly then you will need to pay higher ‘priority’ charges, whereas slow, ‘non-priority’ delivery costs much less.

When calculating shipping costs, don’t calculate the cost of shipping to each country in the world, break it down into regions or by continent. If you are shipping small items like CD’s use one shipping cost for local deliveries and cost for international deliveries. Find the most expensive shipping cost you are likely to incur and use that for all countries.

When your customer purchases a product, they will be charges the cost price for the product and the shipping and handling costs applicable for the delivery destination will be added at the checkout. A total is calculated and then charged to your customer at the end of the transaction.

You may want to consider offering customers a delivery priority for their shipment. For example:

Option 1. Standard shipping within 3 to 5 days (cheapest).

Option 2. Express 2-day shipping (average cost).

Option 3. Guaranteed Next Day 1-day shipping (most expensive).

Consider giving discounts on bulk orders. Customers will often insist on insurance for bulk orders and costly items and you should consider their request; not only does it makes them more comfortable, it saves you a big PR headache if the order goes missing. On all shipments include a clearly explained shipping, handling and return policy.

Always take care to prepare the proper documentation to suit the insurance, tax and customs regulations in force in your own country and in the destination country. If you are shipping to another country, make sure your product is not prohibited. If you sign up with a trustworthy shipping agent or courier most of the documentation will be handled by them, giving you peace of mind that your items will be delivered safely and quickly.

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More Salehoo Scam Talk

Wow, I am thunderstruck at the persistence of weird information about Salehoo. Evidently, the Salehoo scam question is still alive and well. A few moments ago, I ran across this question posted on Yahoo! Answers:

Has anyone heard of salehoo? Would you recommend them for a wholesaler?

I could be wrong, but it seems to me that that the person asking the question and the person answering are possibly one and the same. The Salehoo scam talk is almost verbatim from a well-known anti-Salehoo site:

Yes I am familiar with Salehoo. In fact i was planning on joining. It looked great!! It has been approved by certain companies aswell.

Unfortunately SaleHoo is too good to be true. I was quite disapointed when i found out. The
staff out SaleHoo use comissions and affiliates to earn their money and most of their wholesalers are scams. Salehoo has been using lawyers to threaten people to keep their reputation good.

That is the reason why you never see anything bad about them when you search them. Most of their wholesalers you can find by searching into google.

I have also heard that when you try to get a refund they tell you, you haven’t given them a chance and start to threaten and turn nasty.

I am glad that i didn’t join to find that i have fallen for a scam and don’t want it to happen for anyone else.

The first sentence marked in bold is irrelevant and has nothing to do with the integrity of Salehoo. The second sentence in bold is an outright falsehood. I say that as a member of Salehoo–as far as I can tell, the businesses are legitimate. The third sentence in bold is simply silly. The fifth sentence, about being able to find most of the wholesalers in google is again silly and irrelevant. So what if you can find them in google? The last statement in bold is also ridiculous. Anyone wanting a refund simply need to ask Clickbank and a refund will be automatic. Salehoo has nothing to do with refunds. All refunds are made through Clickbank.

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