One of the basic formulas for making money on the internet is drop shipping. This means you are advertising items for sale on your site, newsletter, ezine, etc that are actually located at another company with which you have a relationship. When someone buys one of the items from you, an order is placed to your drop shipper, which mails the item directly to the purchaser. You keep the difference between the price you charge your customer and the price the drop shipper charges for the item as your profit.
This seems simple enough, and it pretty much is. The catch is finding drop shipping companies out there. Also, you'll need to create a website that can feature items you want to sell, get the website hosted, advertise and promote your site on the search engines, and hope your efforts build enough traffic to your site to start generating sales.
As you may have guessed, the above tasks can be difficult. Just finding decent and reputable drop shipping companies on the internet can be hard. It is almost if they do not want to be found – sometimes this is their way of keeping away the inexperienced, or those who are not able to generate enough sales for them. Fortunately, several entrepreneurial companies have created tools that help you streamline this whole process.
The following is a brief description of DOBA, one of the dropshipping companies I have tried. I advise you to do your own research and due diligence before you act on this or any other business opportunity.
I found DOBA via an ad in an entrepreneur magazine. Their ad promoted a free 14 day trial of their drop shipping service. They seem to have a very large catalog of items available for drop shipping. Each item in DOBA's database is listed with the base price that you need to pay to purchase the item, as well as the recommended mark up price that you will want to charge your potential buyers. You have freedom to adjust the price you charge other people for the items you're selling from DOBA. Keep in mind that changing your asking price will affect your profit, as the price you need to pay DOBA does not change. DOBA's interface allows you to link your Paypal account so you can easily purchase items from DOBA to be shipped without using your credit card.
DOBA also has a nice and easy interface to eBay. If you have an active eBay account, you can fairly quickly select a product in DOBA you wish to sell and create an auction for that item. I was able to sell a mini NFL football helmet from DBA via eBay. Once the auction ended and my winning bidder paid me via Paypal, I went to DOBA and placed an order for the helmet to be shipped to the winning bidder's mailing address. DOBA even wave me a tracking number on the shipment so I and the winning bidder could track the delivery.
Another feature of DOBA is the research tools it makes available. You are able to look up trends of purchased items to see what is popular via DOBA's website. Their support staff also seemed willing to help out with questions.
Drop shipping is an interesting business model. Given the right company, a popular niche and smart pricing, you should be able to generate decent income from this method.