Setting up an Internet Business? Consider Drop Shipping

Written by June Campbell

You've tried affiliate programs, but you'd like higher profits and more control over your business. You don't have your own products and you don't want to manage an inventory. Drop shipping might be your answer.

Mail order businesses have used drop-shipping arrangements successfully for decades. While this method of order fulfillment is not yet well known onrepparttar Internet,repparttar 117736 potential is excellent.

It works like this.

You set up a drop shipping account with a manufacturer or wholesaler. Next, you generate orders for their products, establishingrepparttar 117737 retail price yourself. When an order is placed, you forwardrepparttar 117738 sale information torepparttar 117739 supplier. The supplier fulfillsrepparttar 117740 order, sending it torepparttar 117741 customer with your business name onrepparttar 117742 label.You remitrepparttar 117743 wholesale price ofrepparttar 117744 item torepparttar 117745 supplier.

The benefits are obvious. You keep no inventory and, since you set your own selling price, you are likely to make higher profits than you would make as an affiliate. You might, in fact, set up your own affiliate program and enlist affiliates to market your merchandise.

Drop shipping arrangements also give yourepparttar 117746 ability to establish small, low-cost web sites that are targeted to niche markets. These little sites also make it easy for you to test and promote various products. If a product doesn't sell well online, it's an easy matter to removerepparttar 117747 web site -- or leave it up, since costs are low.

Considerrepparttar 117748 following:

You Need a Legal Business Entity To operate a drop shipping business, you must be a legitimately registered business. Inrepparttar 117749 US, you will need a State Tax ID number. Residents of other countries must determinerepparttar 117750 requirements in their locale.

Sales Taxes US residents are responsible for collecting taxes from their own state and fromrepparttar 117751 state ofrepparttar 117752 drop shipper (if applicable). In some states, gross sales must be reported torepparttar 117753 state and county for business licenses. Residents of other countries will need to check local requirements for taxation and reporting.

Your Internet Store You will need a web site, shopping cart software, and a means of processing financial transactions. In most cases, this means having a Merchant Account. Typically, when a customer makes a purchase, you handlerepparttar 117754 transaction via credit card, then forwardrepparttar 117755 order torepparttar 117756 supplier for fulfillment. You, in turn, payrepparttar 117757 supplier forrepparttar 117758 item via credit card transaction. You might arrange payment by individual item or by a net 30 invoice. Research your Drop Shipping Company Do your homework and researchrepparttar 117759 company before you sign contracts. Here are some questions to ask:

Rites of Passage

Written by Elena Fawkner

Rites of Passage

2002 Elena Fawkner

"I'm not sure what exactly my point in writing this is going to be other than to voice my frustration to someone who has been there, and would understand.

"Like many, I've been considering starting up some form of a home business. Or at least some way to boostrepparttar income. So overrepparttar 117735 past few months, I've been looking at every hare-brained idea out there. Allrepparttar 117736 Associate Programs,repparttar 117737 eBooks with publishing rights, allrepparttar 117738 scams (and most of them out there really start to look like scams after a while!).

"What I've discovered: "There are no short-cuts". I don't know why I thought there were."

This is an extract from an email I received a couple of weeks ago from one of my ezine subscribers, Ric. It typifiesrepparttar 117739 frustration and "overwhelmingness" we ALL face when grappling with what we think we need to know before we can begin to start an online business. It's like trying to pin jelly to a wall - there's just so much we know we're missing so at what point do we actually biterepparttar 117740 bullet and just start?

If this is how you're feeling as you sit here reading this late at night, chin propped on hand, after yet another evening of searching, downloading and reading everything you can lay your hands on about generating an income fromrepparttar 117741 Internet, only to end up feeling more confused, overwhelmed and discouraged than when you started, take heart. This is just how it is. You're not alone. We've ALL been there - it's just part ofrepparttar 117742 process, a rite of passage, if you will. Rest assured, you CAN get through this to where you need to be.

Let's shine a light on this beast and cut him down to size, shall we? Here'srepparttar 117743 process and, although there may not be much you can do to avoid it, at least you can recognize it for what it is and be reassured in your darkest moments that, far from being lost at sea, you are walking a well-worn path. Just keep putting one foot in front ofrepparttar 117744 other and you'll get there if you don't give up.

=> Phase I - Have Computer, Will Get Rich

OK, so you have a computer, and an Internet connection. You've been online for a while actually, just dabbling about, sending email to family and friends and maybe doing a bit of surfing.

In your travels, you've stumbled across all these people who are making fortunes onrepparttar 117745 Internet. After a while, it seems to you that pretty much everyone who has a computer and an Internet connection is using them to generate a huge income. You think to yourself, "I have a computer and an Internet connection. I should be making a fortune too." So, likerepparttar 117746 pioneers before you, you decide to go after your rightful share.

So here you are, computer connected torepparttar 117747 Internet, fingers poised overrepparttar 117748 keyboard. Now what? How am I supposed to use this thing to make money? Oh, I know, I'll do a search. I can find out anything on Google. So you go to Google (or, if you're really new, Yahoo!), and you type in "making money onrepparttar 117749 internet".

And Wazzooo! Lists and lists and lists of sites that promise to show you how to make money. Oh, this is a goldmine! Already you're planning a month-long trip to Europe.

You merrily head off and visit dozens of sites your first afternoon. Duringrepparttar 117750 course of that afternoon and inrepparttar 117751 weeks that follow, you come across sites that promise to give you $30,000 in 30 days if you invest just $30 (you learn about matrix/pyramid schemesrepparttar 117752 hard way), then you learn about affiliate programs and how you can make money by referring people to someone else's site (but only if they buy) which is great because you have no product and no idea about how to create one.

You hear a lot about MLM programs and network marketing. You think they sound an awful lot like pyramid schemes but you know they're different, you're just not sure how.

And then you find out about products with resell rights so you can keep 100% ofrepparttar 117753 profits (but you have to buyrepparttar 117754 product first).

Every time you turn around there's another expert promising to show yourepparttar 117755 way torepparttar 117756 promised land.

=> Phase II - This is More Complicated Than I Thought

You soon realize that this whole making money with your computer business is way more complicated than you thought. And now you discover you need to go off and learn something else besides. Internet marketing. After all, when you finally decide what you're going to sell, you have to know how, right? Fortunately for you, there are literally thousands of Internet marketing experts out there just waiting with bated breath to share their secrets with you. For a price.

Everything is so confusing and overwhelming that you just don't know where to begin. So you decide you'd better learn everything there is to know about Internet marketing before you start. That way, when you've learned everything you need to know, you won't make any mistakes.

So you spendrepparttar 117757 next several weeks to several months downloading all ofrepparttar 117758 free Internet marketing ebooks that you can find. When you realize they all pretty much say repparttar 117759 same thing, you decide you'd better get serious and start paying for some ofrepparttar 117760 really good stuff. So, three months and $900 later you have a hard disk crammed full of ebooks that you don't even remember reading and you're damned if even now you haverepparttar 117761 foggiest idea where to start. No wonder. It's pretty hard to visualize how you're going to market a site you haven't even created yet, let alone make money from it.

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