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There was a time, not so long ago, when drop shipping got little press. Today, we read about it everywhere. Drop shipment is fundamental to the success of many Internet entrepreneurs. More and more companies provide drop shipping services as a means to expand sales. A steadily increasing number savvy sellers are taking advantage of this opportunity, using email, eBay auctions, Web sites and other marketing media. Sales are booming ... but so is competition.

If you're unfamiliar with wholesale drop shipping, here, in a nutshell, is how it works:

1. Your online marketing has resulted in the retail sale of a product to your customer.
2. You contact the product manufacturer or distributor with whom you have a wholesale account, you order the product at your wholesale rate, and you provide your customer's address.
3. The manufacturer or distributor drop ships the product directly to your customer, with your return address on the label.

You don't have to stock any inventory, mess around with packaging, or hassle with shipping. Your gross profit, quite simply, is the difference between the retail and wholesale costs.

Feature Article

How To Use Drop Shipping To Secure Your Niche Business
Brad Beiermann Ph.D., Hienote Inc.

Have you ever used the words “drop ship” or “drop shipper” in a sentence before? These words have both become extremely popular in terms of the online business worlds. Why? There are now thousands of small e-commerce retail websites starting up each day that follow the stockless retail business model. In addition, there have been many auction sellers who have embraced the stockless model by using drop shippers. These types of businesses sell product online but do not carry any actual inventory. When a customer places an order on their site, the site company then places an order to a drop shipper. In turn, the drop shipper sends the product to the site’s end customer.

The Situation You Should Avoid
With so many of these small businesses coming online, the competition for customers has grown intense. Often the customer can find various e-commerce sites offering the same exact products as each other. The various sites might even be using the same drop shipping company. So, this can commonly set the stage of a price war between sites. If they are all using the same drop shipper, they are all bound to the same product costs. Inherently, many customers go for the less expensive price if they feel they can get the exact same product from a different site at a lesser price. The site that wins the customer with the low price might have made nothing in terms of profit margin. The site, as well as other sites, might also be bound to the same stocking issues. For example, the drop shipper might be out of stock for a particular item. This is why a customer can find multiple sites with identical product, and yet, they are all out of stock for a particular item. Again, this stems back to everyone using the same drop shipping company.

A Remedy You Should Consider
As a stockless retailer, you will want to avoid the situations as described above. How can the risk of these situations be avoided? The solution can sometimes be found in how well you leverage drop shippers for your niche business. There are several ways to leverage your drop shippers to give you an edge in the marketplace. Let’s explore how a drop shipping company could help you.

Three Powerful Techniques You Should Know
By using a little bit of research and creativity, your drop shippers can become a significant advantage for you in the market place. Consider these three tips:

Diversify & Use Obscure Drop Shippers.
This is like getting a product from an unlikely source. For example, let’s assume we sell brass and copper nautical gifts for our site. Should we seek drop shippers with nautical related gifts? Not necessarily. You might want to check out a drop shipper that primarily stocks books. They might have metal book ends with a nautical theme. This might be an obscure product for them to carry typically. They may only offer just the one kind of set. However, this is a good hidden product source as it would be a source other competing sites would easily.

Place A Product Request To The Drop Shipper
Drop shippers are always looking for ideas on what they should be stocking. If there is something they do not have, ask them for it. Often they may seek, or stumble onto an item you requested during their next trip to a manufacturer. If they start carrying the item, you have the early word and head start on the market. You might even consider having them source this product exclusively for your business if it does extremely well. Most of the time, you have to have a minimum number of sales on a product to get an exclusive right.

Limit Your Selection From A Drop Shipper.
A good practice can be to select only one or two items from a drop shipper that fits your niche. By limiting your selection from each drop shipper you can have a product portfolio that is the needle in a haystack for other business to find and offer. Drop shippers sometimes have hundreds of products. They may have many items that fit your niche, but avoid sourcing more than two items at a time from this particular drop shipper. This helps you minimize your risk of having a duplicate product portfolio another site might be offering. This is particularly true if the majority of their product come from only one or two drop shippers.

About the Author:
Brad Beiermann Ph.D., is President of Hienote Inc. Dr. Beiermann is one of the leading experts in business technology and e-commerce. Hienote Inc. specializes in assisting businesses locate unique wholesale drop shipping companies. You can visit their site at http://www.hienotedirectory.com/ - [Read our review here.]