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Dropshipping can be a very profitable home business for stay at home parents,
retirees, students, and anybody motivated enough to create a profitable internet
business. However, many dropshippers make the same common mistake that can kill
the motivation of a new dropshipper and put a hole in the profits of the
experienced.
This mistake involves attempting to locate and sell the latest name brand, hot
fad in hopes of capitalizing on the high demand. Most dropshippers have good
intentions with this strategy with this idea, as their thought process is
usually along the lines of, “If I can just find THAT item at a wholesale price,
then I could really dropship a lot of them and reap a huge profit.”
Good luck finding that product at a wholesale price.
When an item is the latest big thing, it is extremely rare to find it listed
with a wholesale supplier. When the item is listed, it is rarely low enough to
reap a large profit. Why is this? When a product is in high demand, the price
goes up for everybody – even the dropshipper. Your supplier is going to demand
the same high price that the product is demanding in the marketplace. While you
may get a small break as the result of being a dropshipper, it is usually not
enough to bring a substantial return. When a dropshipper says, “If I can find
THAT…” he or she is committing too much to one product and is missing profitable
opportunities in the same industry. Let’s take an example…
The iPod is perhaps the most sought after wholesale item, because new
dropshippers expect them to sell for high prices very quickly. However, the cost
to dropship this item is very high, and the return is usually very low. On the
other hand, there are several MP3 players that are very similar to the iPod that
are excellent for dropshipping. When imported or purchased from directories,
these products can be purchased for less than $50. On electronics websites, and
occasionally on eBay, these same items sell for almost double the price as a
result of being compared to the iPod (which sells for three times the price).
Therefore, instead of spending countless hours searching for a wholesale price
for that hot item, look at the knockoffs and compare them to the real thing.
An even better way to turn hot items into dropship profits is to sell
accessories to them. Instead of focusing on selling iPods, sell iPod accessories
such as chords and covers instead. This is the quickest and best way to get
started as a dropshipper and make money very quickly.
There is one exception to this rule. When hot items, especially electronics,
first hit the market, there are many people who will pay more than retail on
eBay simply because there is low supply in the marketplace. Look at the insanely
high prices that video gaming systems and cell phones bring on eBay when they
are first released. If your suppliers get inventory of these items when they
first come out, you can then take advantage of the high demand. The key is to
get in early, and if you can supply an item that is very scarce, you can
occasionally hit a home run.
To recap, do not get caught in the trap of finding this week’s hot item at a
wholesale price; instead, use the high demand that they bring to your advantage
by dropshipping similar, comparable items and their accessories. By doing this,
you will can easily sell in demand products for a good profit. If, however, your
suppliers are able to get you hot items when they are first released, you can
set yourself up to make a large profit. However, the steady incomes that the
common dropshipper searches for is in thinking outside the box. Therefore,
instead of committing to one product and looking everywhere to find a deal, find
the deals first, and use them to make your dropship profits.
For more tips to increasing your dropship profits, and to find reviews of
dropship wholesale directories, visit DropshipProfits.org.
Daniel Westfield is an internet entrepreneur who has used eBay to quit his job
and work full time from home. He teaches others his eBay strategies via his
website, How to Make
Money Selling on eBay.
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