| Like the legendary search for the Holy Grail, the cup | | | | advertise their products. They can even put your |
| that Jesus drank from at the Last Supper, the same | | | | return address on the package! A lot of Retail |
| "holy crusade" goes on today by veteran and newly | | | | Catalog companies use drop-shippers as their means |
| anointed business owners for the perfect wholesale, | | | | of supply. |
| surplus, and drop-shipping resource. They believe that | | | | PROS AND CONS OF DROP-SHIPPING: |
| divine intervention will lead them to suppliers that can | | | | There is one obvious advantage to drop-shipping. It is |
| defeat the economic laws of "supply and demand." | | | | basically a "product less" venture. No need to tie up |
| There are more than a few people who try to build | | | | your money in inventory. Drop-Shipping can fit into |
| an enterprise based on the weak premise that they | | | | any business model, or advertising method you |
| will able to "score" in demand retail items for their | | | | happen to use. However, if you are an Ebay Auction |
| new business, or auction, at either below wholesale | | | | seller you might want to rethink that position. |
| prices, or "pennies on the wholesale dollar." | | | | Finding a drop-shipping company that can deliver on a |
| Trying to ride the wave of popular retail products | | | | consistent basis can be tough. Drop-Shipping |
| brings out the greed monster in all of us. Pursuing the | | | | companies have been known to run out of |
| "deal of the century" has lead some aspiring business | | | | merchandise. If they happen to run out of the |
| owners to risk their start-up capital on fraudulent | | | | product you are auctioning, asking buyers to wait on |
| deals and offers. | | | | their product because it is "back-ordered," does not |
| In this article I want to discuss three of the more | | | | inspire confidence. |
| sought after sources of product supply, and the | | | | Your negative feedback rating can pile up real quick. |
| "Pros & Cons" of each. I also want to shed a | | | | The other problem is expense. Some drop-shippers |
| little light on some of the misconceptions people | | | | require a sign-up, or "entry fee" before you even |
| might have about buying "products for resale." The | | | | start marketing their products. You might also have |
| reality is that not every product will be available | | | | to pay for support materials, such as pictures and |
| through wholesale, surplus, and drop-shipping venues. | | | | advertisement brochures for the product you choose |
| Wholesalers: Typically, one of the better places to | | | | to sell. |
| purchase products for your new found venture. Most | | | | In addition, when you sell a product from a |
| true wholesalers will require that you have a | | | | drop-shipping distributor there are processing fees |
| "Certificate Of Resale" before you can purchase | | | | that have to be paid, in order to get the product out |
| from them. A Certificate Of Resale, or "Tax & | | | | the door and in the hands of your customer. That |
| Use Certificate," is not hard to obtain, and costs | | | | price can range anywhere from 5.00 to 10.00 dollars |
| anywhere from five to twenty dollars depending on | | | | and up depending on the item. After Ebay and |
| the state you live in. | | | | drop-shipping fees, you can wind up loosing money, |
| Some states do not require that you even have one. | | | | or at best, breaking even. Bottom-line, drop-shipping |
| You can obtain the certificate from your State | | | | and auction selling don't mix. The best bet for any |
| Department of Revenue. For more information about | | | | auction venture is to "own what you sell." |
| sales and use tax, the websites and can provide you | | | | EVERYTHING CAN BE HAD FOR A PRICE-BUT |
| with further information about resale certificates and | | | | THERE IS A PRICE TO PAY FOR EVERYTHING! |
| business licenses. | | | | Now that we have reviewed the "big three" let me |
| Depending on your states procedure, once you fill | | | | put them into perspective. There are products that |
| out the paperwork you can get your "Certificate Of | | | | can be obtained through a few of featured supply |
| Resale" number the same day. You do not have to | | | | chains, and then there are products that will never |
| incorporate in order to obtain a certificate. You need | | | | make it to the surplus, wholesale, or drop-shipping |
| to be a Sole Proprietor (at the very least) and have | | | | market. Example: To get Louis Vuitton handbags |
| an address where you plan to conduct business. | | | | through a surplus dealer is almost impossible. Surplus |
| Once you have your number you will be able to open | | | | dealers that are promoting LV Handbags are |
| a business checking account at most local banks. | | | | misleading you. |
| Most do not require more than a few hundred dollars | | | | Same is true for people who are selling designer |
| to get started. Wholesalers will require a minimum | | | | handbags on Ebay in mass quantities. The likely |
| purchase price that can range anywhere from 100 to | | | | scenario is that they are Chinese knockoffs. Over 80 |
| 1000 dollars. | | | | percent of popular retail products here in the United |
| A true wholesaler is usually one step away from the | | | | States are copied in the People's Republic Of China. |
| original source of the product. For instance, a | | | | Those products include Nike, Reebok, Puma, Adidas, |
| manufacturer produces blue widgets and wants to | | | | Louis Vuitton, Calloway (Big Bertha) golf clubs, and |
| get their product into the marketplace. They will then | | | | just about any product that enjoys popular |
| employ a sales representative to get the product | | | | merchandising status. |
| into the market, or they will assign a wholesale | | | | There is no plan by the Chinese government to stop |
| distributor the exclusive rights to carry and sell their | | | | "knockoff" activity because it is a thriving industry |
| product line. Some companies are import wholesalers. | | | | that provides employment for the masses. Despite |
| While they do not necessarily manufacture a product, | | | | the pleas from American companies to "cease & |
| they will import products from manufacturers in the | | | | desist," there is a tepid response from Chinese |
| United States, and from countries like China. A great | | | | officials to do address the issue. When raids are |
| example of such an importer/wholesaler is the | | | | conducted, they are "ceremonial" public relations |
| Bnfusa.com: | | | | stunts to appear as if they are actually taking action |
| There are a few ways to find wholesale products. | | | | against the counterfeiters. |
| Just about every product that is in the distribution | | | | Another indicator of authenticity is price. You will not |
| chain will usually have a dedicated trade association, | | | | find any authentic Louis Vuitton handbags for 30, or |
| organization, or trade publication attached to it. You | | | | even 100 dollars. Most are 500.00 and up. To illustrate |
| can find such trade information with the help of the | | | | this point even further, just think about the popular |
| following directory information at The National | | | | celebrities of today who are clothes and handbag |
| Association Of Wholesale Distributors, NAW.org. Go | | | | aficionados. Jennifer Lopez, Britney Spears, Jennifer |
| to the "About NAW" section at the top of the | | | | Aniston, Angelina Jolie, all sport around town with |
| website and then to the "Member Associations" | | | | "Louies" that can fetch up to 10,000 dollars for an |
| section. There you will find wholesale associations | | | | exclusive style of handbag. Do you think you will ever |
| members for just about every product that has a | | | | have access to these items in the wholesale, surplus, |
| retail presence. | | | | or drop-shipping market? |
| From Advertising to Woodworking. You should be | | | | Forget it! You might not even get these in some |
| able to solicit them for wholesalers within a particular | | | | upscale boutiques! There are people so well |
| industry. If you want to purchase their membership | | | | connected that they buy up "hot items" like LV |
| list (separate from the association listings), you will | | | | Handbags before they even hit the stores. They |
| have to get in touch with them to check their | | | | know who wants these items, and they will purchase |
| current prices. Other good sources are: | | | | whatever is available just so they can have an |
| Encyclopedia Of Associations By: The Gale Group | | | | exclusive for their celebrity clients. Don't get me |
| The Encyclopedia Of Associations lists over 100,000 | | | | wrong. It's not that you can't get "designer duds" or |
| different nonprofit American organizations. If you | | | | handbags at wholesale prices. You will not get high |
| cannot find what you are looking for from the | | | | end clothes and accessories that are featured in the |
| National Association Of Wholesale Distributors in | | | | latest issue of Vogue, Cosmo, as a "product for |
| terms of trade associations, then this is the directory | | | | resale," in any wholesale environment, unless you |
| for you. However, you will have to go to your library | | | | spend thousands for the right to distribute such a |
| to find this research gem. You can usually find it in | | | | product. |
| the reference section of any large University, or | | | | Even if some of these items made their way beyond |
| Public Library. | | | | the connected channels of purchasing, exclusive |
| In addition to trade associations, trade magazines | | | | clothing and handbag items like Louis Vuitton will have |
| are another good source. allows you to: "Search our | | | | limited distribution in "hand picked' boutiques, and well |
| database of over 150,000 magazines, journals, | | | | connected purchasing agents. In addition, there are |
| newsletters, & other periodicals. | | | | people in the fashion industry, as well as other |
| Find FREE in-depth information on familiar and | | | | branded industries that would rather have their |
| hard-to-find publications from around the world, | | | | merchandise burned, or buried before it would reach |
| representing thousands of topics." allows you to | | | | the wholesale, surplus, or drop-shipping market! |
| subscribe to trade periodicals from their web site for | | | | For a healthy does of honesty, and an eye opening |
| FREE! No hidden trial offers to qualify. | | | | perspective concerning the realities of purchasing |
| If you are looking for industrial product | | | | designer clothes for resale, the Clothing Broker will |
| manufacturers, then this is the directory for you. The | | | | definitely explode some popular myths about |
| Thomas Regional directory will give you access to | | | | obtaining such items, The Clothing Broker: THERE IS |
| services from over "550,000 industrial distributors, | | | | GOLD UP IN THEM THERE HILLS! |
| manufacturers, and service companies." | | | | Now lets address the Surplus & Salvage |
| The Thomas Regional will help you find suppliers in | | | | Industry. When people first encounter some of the |
| your own state or region. Registration is required, but | | | | offers from Surplus dealers, or brokers, they tend to |
| you can use the directory for FREE! Other free online | | | | suffer from what I call the "I just found Gold" |
| sources of wholesale information and offers are: | | | | syndrome. A feverish excitement permeates their |
| Wholesalecentral.com, Wholesalegopher.com, | | | | brain cells, and reduces them to a quivering pile of |
| Bizbb.com, | | | | jelly, leaving their reasoning skills inoperable! A few |
| PROS AND CONS OF WHOLESALE SUPPLIERS: | | | | thousand dollars later, and after coming to the |
| Wholesale is the backbone of product supply for any | | | | conclusion that their "Golden Opportunity" turned out |
| type of new business venture. Large and small | | | | to be bars of lead, elation, then turns to anger. |
| wholesalers are usually one step away from the | | | | It is a cliche, and I hate using it, but it is more than |
| manufacturer. They have the advantage of buying | | | | appropriate when it comes to surplus and salvage |
| large quantities, and, depending on the type of | | | | products. "If it sounds to good to be true, it probably |
| merchandise, are able to pass along savings to those | | | | is!" Some Surplus dealers will hone in one at least one |
| who are looking for "products for resale." With | | | | of seven deadly sins--greed! As with wholesale, you |
| wholesalers (in most cases) you can be assured of | | | | will never get certain products for "pennies" on the |
| purchasing new product. I can't think of too many | | | | dollar. One type of surplus product category that has |
| "cons" when dealing with wholesalers--other than | | | | some people loosing their minds is surplus and salvage |
| pricing. There might be items that could be too | | | | electronics. |
| expensive to sell in the Ebay auction marketplace. | | | | The problem with electronics is that they have a low |
| Remember, true wholesalers will require that you | | | | profit margin even when they are brand new. Finding |
| have a Certificate Of Resale in order to purchase | | | | surplus dealers with working, undamaged, electronic |
| from them. | | | | products can be a daunting task. Most salvage |
| Surplus & Salvage Merchandise: Another sought | | | | electronics can be in pretty rough shape, then you |
| after source of supply is retail surplus, closeout, | | | | need to visit What you are getting from most |
| overstock, liquidated, and salvage merchandise. | | | | Surplus Dealers, or companies who specialize in |
| Surplus dealers, and brokers, purchase shelf-pulled, | | | | electronic salvage is someone's customer returns, i.e., |
| returned, overstock, closeout, liquidated, and salvage | | | | "junk!" Unless you are a electronics technician, or |
| merchandise from manufacturers, retail stores, | | | | recycler, then I would stay away from "salvage" |
| reclamation centers, bankruptcy sales, and just about | | | | electronics. |
| any business who has slow moving or salvage | | | | Even product that is not damaged, and still in the box |
| merchandise. | | | | or retail blister pack, can have a pretty high surplus |
| Surplus dealers buy these obsolete items in large | | | | price. If you find that someone is offering you a |
| quantities, and then resell them to just about anyone | | | | electronics item, be it a DVD Player, or Xbox, for |
| who wants them for their eBay Auction, Flea Market, | | | | eight dollars a unit, then "buyer beware." |
| Dollar Store, or Retail Store outlet. One of the largest | | | | GETTING DROPPED BY DROP-SHIPPING! |
| trade associations for the surplus industry is the | | | | My last critique, and word of caution is about |
| International Marketing Association Of Surplus | | | | drop-shipping. You might have access to information |
| Dealers, Surplus.net. You can find dealers throughout | | | | about drop-shipping companies that would prove me |
| the United States. | | | | wrong. I will not argue with anyone who is dealing |
| Other sources of finding Surplus, Salvage, Closeout, | | | | with a dropshipping company who is serving them |
| and Liquidated merchandise include the following: | | | | well. However, I will tell you that dropshipping is a risk. |
| Closeoutcentral.com, Liquidation.com, | | | | I really can't recommend any type of guide, or |
| CWSMarketing.com, Commoditysurplus.com, and | | | | information that would lead you to a reliable source |
| National Retail Equipment Liquidators (Nrel.com). | | | | of drop-shipping companies. |
| PROS AND CONS OF THE SURPLUS & | | | | Unlike surplus and wholesale, where you physically |
| SALVAGE SUPPLIERS: | | | | own and control the product, that option has been |
| The "Pros" of the Surplus & Salvage | | | | taken out of your hands. You are entrusting a |
| merchandise is that they can offer you a variety of | | | | company to ship products directly to your customers. |
| products at below wholesale prices. However you | | | | If you get involved with a company who cannot |
| "market your merchandise," you should be able to | | | | deliver, or who is back ordered, you can find yourself |
| find a product, or price, that will fit into any business | | | | with some very irate customers. Sign up fees, |
| advertising model. In most cases, you do not need a | | | | shipping fees, and expenses for support materials can |
| "Certificate Of Resale" to buy products from Surplus | | | | really affect the bottom line. |
| & Salvage Dealers and brokers. | | | | Also, most drop-shipping companies like to send out |
| The downside is that you have to do some | | | | product in volume. If you are selling just a few items |
| investigative work. Some dealers will want you to | | | | per week, or per month, it might not be worth if for |
| buy merchandise in quantity (a pallet minimum, | | | | a drop-shipping company to deal with you. Large retail |
| truckload preferred) and you have to visit the | | | | catalog companies use drop-shipping or "fulfillment" |
| company you are buying from to make sure that the | | | | houses, but these companies cater to large scale |
| product is, as advertised. Also, more than a few | | | | operations. |
| S&S dealers want payment in the form of wire | | | | The bottom line is this. When it comes to finding |
| transfer which can be very risky. Also, dealers and | | | | product supply for your business it pays to do your |
| brokers will sometimes misrepresent the quality of | | | | homework. Visit the company facility when you can. |
| the merchandise they are are selling. Before you | | | | Never wire any money into a company account. Use |
| consider doing any business with a surplus dealer, or | | | | a credit card, or Escrow service to protect yourself |
| broker, please use Google or your favorite search | | | | should your supplier not deliver, or send you |
| engine and type in: "The Ten Tenets Of The Retail | | | | defective merchandise. |
| Surplus And Salvage Business." | | | | Understand that you will not be able to get the latest |
| Drop-Shipping: Supposedly the perfect business | | | | and greatest technology or fashions at surplus and |
| model. No inventory, no trips to the post office or | | | | below wholesale prices. If you follow all of these |
| UPS. You just set up shop, take the order, pass it | | | | rules, and you use common sense as your "crusade" |
| along to the wholesale drop-shipping company and | | | | you just might be able to find your own "Holy Grail," |
| they send it out for you. Some drop-ship distributors | | | | of wholesale product supply! |
| will even send you ad copy and pictures to help you | | | | |