To understand Drop
Shipping, we should first understand product distribution.
People have been distributing
products since before the first mastodon skinner traded a
fur coat for a flint axe.
Here’s how it works.
Let’s say ABC
Manufacturers makes a product called Mom’s Ankle Wax. We’ll
say that Mom’s Ankle Wax has been around for years. It’s a
very well known brand name product. It will without a doubt
give you the shiniest ankles on your block, and everybody
makes Mom’s Ankle Wax, but they don’t sell it directly to
the public. They’re a manufacturing operation. They’re far
too busy melting paraffin and waxing test ankles to go
around building stores all over the place. They need
distributors; companies who will take their product and
distribute it to the places that will sell it.
For years, ABC
Manufacturers has sold Mom’s Ankle Wax to a company called
DEF Distributors. The founder of DEF Distributors knew Mom
herself, back in the old days when she made her Ankle Wax by
hand, out in the turkey barn.
Distributors buys Mom’s Ankle Wax by the truckload. They pay
$5.00 a case for it, which is a very good price. It’s such a
good price, it has it’s own name: the Manufacturer’s
Distributors does not sell it to the general public either.
They are a distributor. They distribute Mom’s Ankle
works with a chain of retail stores called Wax R Us. This
place was founded by a retail business visionary who saw the
incredible potential of Mom’s Ankle Wax a long time ago.
Today there are Wax R Us retail stores on every street
corner in every major city in the country. Wax R Us buys
truckloads of Mom’s Ankle Wax from DEF Distributors for
$10.00 a case.
Distributors makes $5.00 on every case of Mom’s Ankle Wax
they sell to Wax R Us retail stores. This makes DEF
Distributors very happy.
Cases and cases of
Mom’s Ankle Wax arrive in the stockrooms of Wax R Us stores
everywhere. The Wax R Us employees open those cases, and
pull 12 cans of Mom’s Ankle Wax out of each case. With their
pricing guns, they stick a price of $4.50 on each and every
Wax R Us stores
make a total of $44.00 on each case of Mom’s Ankle Wax. (12
cans x 4.50 per can = 54.00, minus the 10.00 they paid for
the case = 44.00).
Wax R Us is even
happier than DEF Distributors.
happiest people of all are the people who can stroll into
Wax R Us and purchase a can of Mom’s Ankle Wax for only
$4.50. They think this is a great price, and they’re walking
around with the shiniest ankles in town.
it…basic product distribution. The manufacturer sells to the
distributor, the distributor sells to the retailer, and the
retailer sells to the end user (the customer). The
manufacturer, the distributor and the retailer all make
money because the customer is willing to spend money
for the product.
Drop Shipping has
been around for a long time, too. Probably as long as mail
order catalogs; maybe longer. If you want to use a buzzword
to impress a corporate type, call it “second party
Above, we talked
about the manufacturer-distributor-retailer relationship.
When you use drop shipping to sell products on the Internet,
(or anywhere else), YOU become the RETAILER in that
It should be noted
here, if only to keep the Punctuation Police happy, that if
you use the method of drop shipping in your business, YOU
are not the “drop shipper”. The company(s) who supply
the products to your customers for you is the drop shipper.
YOU become a “Stockless Retailer”.
Here’s how drop
1.)You open an Internet Store, with a shopping cart and
the ability to accept credit cards.
3.)You establish an account as a retailer with the
Wholesale Supplier you choose.
4.)You receive images and descriptions of the products
you want to sell from the Wholesale Supplier and post them
on your Internet Store.
5.)A customer surfs into your Internet Store, and falls
in love with a product that you have priced at, say, $80.
They purchase the item with their credit card. Your Store
charges their credit card $80 plus your shipping fee.
6.)You turn around and email the order to your Wholesale
Supplier, along with the customer’s name and address.
7.)The Wholesale Supplier sends the product directly to
your customer, with YOUR Store’s name on the package.
8.)The Wholesale Supplier charges you the wholesale
price of, say, $45.00, plus shipping.
9.)Your customer gets a cool product from your store
shipped to their door, and they tell all their friends about
you, and you make even more money.
There you have it.
You just made a $35.00 profit on one item. You didn’t have
to buy a whole bunch of the product and keep it in your
warehouse, hoping you would sell it. You didn’t have to pay
to have it shipped to you, and then pay to ship it to your
customer. All you did was send an email to your Wholesale
offered after the sale, they're NOT free!
One of my
best friends, someone that I’ve known since I was a teenager
(which seems like a long time ago!), had a great
collection of T-Shirts with some of the funniest slogans on
them that I’ve ever seen.
One of my favorites was his
T-Shirt that read: “If You Can’t Dazzle ‘em with Brilliance,
Baffle ‘em with Bull****” (You can probably fill in the
blanks quite easily!)
There are a tremendous number
of web sites selling Information on the Internet who are
doing just that. Completely lacking in anything even
remotely resembling brilliance, they are spending a great
deal of effort, and seriously taxing their few active brain
cells, in order to Baffle you into buying sub-standard
We are in the business of
providing Product Sourcing information to Home-based
Internet Businesses. We publish The Drop Ship Source
Directory, a Directory of brand name Wholesale Supplier who
are willing to Drop Ship those products directly to your
customer from the warehouse, one at a time, at wholesale.
It’s an excellent way to do business without spending a ton
of money on stocking an inventory. We also publish The Light
Bulk Wholesale Directory; a Directory of genuine Wholesale
Suppliers who are willing to sell small bulk quantities
of products to Home-based Internet Businesses at
larger bulk quantity wholesale prices. We’ve worked
very hard for years to provide absolutely honest
and complete information.
However, there are other
information providers in this business who are either too
lazy to do the time-consuming research this business
requires, or are just outright scam artists looking to cheat
you out of your money.
They have a wide range of
methods they use to Baffle you into buying from them, but
one of the most obvious is Free Gifts.
Now, we have to be careful
here, because there are two kinds of Free Gifts.
1.)Free Gifts given to you
before the sale are usually a good thing. We
do that ourselves; we offer a very comprehensive
Free EBook that gives you a tremendous amount of FREE
information on starting your Internet Business. We give you
that for free, no questions asked, no personal information
required, and you never have to buy anything from us. THAT kind of Free Gift is OK, because
it really is Free!
that are promised after the saleare the thing to watch out for. They are
designed to make the offer look so attractive to you that
you simply cannot turn it down. They are, in fact, given to
you because the main informational product itself is so lousythat
it’s creators feel that they have to suck you in with after-the-sale freebies, or
they’ll never sell anything to you at all. However, in order
to get all these Free Gifts,
you have to buy
Here’s how these
scam artists work:
They pitch their
junk Informational Product to you with all kinds of
wonderful promises, telling you that you’re going to make
incredible amounts of money very quickly.
That in itself
is not true! NOBODY
makes incredible amounts of money quickly on the Internet.
In the real world, it takes time, patience, and work!
tell you that if you order their information, they will
include “$750 Worth of Bonus Free Gifts!” with your order,
or some such ridiculous statement. They tell you that
you will get Marketing Information, Email Generation
Software, Important Articles and Reports, Expensive
EBooks, Bonus Wholesale
Guides, etc., etc., for FREE,
after you buy their
Freebies that you
only get AFTER the sale are there
for two reasons:
They make you think
you're getting much more that you are paying for, when
in truth you are not; you can pick up that stuff
for free without buying anything. All that Free
Stuff is just that; it’s FREE, it’s garbage, and you can
find it all over the Internet for nothing, without
having to pay a cent for anybody’s products. The scam
artists certainly do not pay for it; why should you?
They are a
distraction. The scam artists are counting on the
very good probability that you will spend so much time
with, and get so caught up in all that extra free
stuff that you will forget that the
original product you paid for is junk, and
you'll never bother to ask for
So Beware of
Informational Web Sites offering Free Gifts after the
sale, folks. There is a reason for it, and it’s not a
should also offer a T-Shirt with those “gifts”…I know a guy
who can suggest a good one…
Our company publishes the
Internet’s leading Directory of genuine wholesale “Drop
Shippers” (wholesalers who ship products, one at a time,
directly to your customers; eliminating the need to stock
inventory). It's called The Drop Ship Source Directory. We
also publish the Internet's Leading Directory of genuine
Wholesale Suppliers who will sell to you in small
Bulk Quantities, while still giving you larger Bulk
Quantity prices. That's called The Light Bulk Wholesale
Directory. As a result of the information we research and
publish, we get questions all the time about what products
Home-based Internet Business owners should try to sell
I’ve been at this for years,
and have become very successful in my Internet business. But
let’s face it, folks. If I knew what was going to sell well
on the Internet tomorrow, next week, or next month, I
wouldn’t be writing this article. I would have retired and
purchased a small private island by now. In the retail
business, whether you are online, in a physical store in the
local mall, or at a roadside stand, it makes no difference;
choosing the products you are going to sell is always the
hardest part of getting started.
I can’t whip out a crystal
ball and tell you what to sell. However, I can tell
you about the biggest mistakes that I see new Home-based
Internet businesspersons making, all the time.
Too many people are fixated on
Selling only products they
Selling only products they
know a lot about.
Selling only products they
think are “Cool” or “Sexy”.
Selling only products they
think “The Hottest Products on the Internet”.
I get four basic emails from
people who are stuck in this rut, and I can pretty much tell
that right off the bat, by the way the email begins.
An Email from a person who
only thinks they can sell what they like
starts something like this:
“Dude, I’m like, a Sk8ter,
and I need to find a Wholesale Supplier for, like,
Sk8tboards + wheels + stuff”.
The first problem this person
is going to run into (aside from the fact that he needs to
learn how to write a business email!) is a problem for
all four types of people here. There may not be a
Wholesale Supplier for the products they want, that will
work with a Home-based Internet Business. We’ll talk more
about that in a few minutes, though.
The second problem is “tunnel
vision”. This person may actually find a Wholesale Supplier
for “sk8tboards + wheels + stuff”. If he does, great.
However, someone who has such a narrow vision of the
Internet Marketplace will never branch out and fulfill his
own potential in that Marketplace.
Say he does find the Wholesale
Supplier he’s looking for, and opens a store. Because of the
narrow vision that led him there, he’s likely to stick with
that store, and that store alone. He’ll make some money, but
unless he gets really lucky, he won’t make a really good
income out of it. He’ll piddle along selling “sk8tboard”
stuff forever, when he could have done so much more.
What he needs to do is broaden
his scope. If he’s interested in “sk8ting”, wonderful. But
instead of focusing on just that, he should explore selling
all kinds of sporting goods.
Sam Walton, the revered
Founder of Wal-Mart, was once a starting quarterback on his
High School football team in Columbia, Missouri. He also
liked to play basketball. Can you imagine what would have
happened if Sam Walton never tried to sell anything besides
football and basketball equipment? There would probably be a
pretty big store in the US selling just footballs and
basketballs today, because Walton was a very good retailer.
But it never would have grown to the size and scope
of Wal-Mart today if Sam had allowed tunnel vision to crowd
his overall view.
It’s okay for our “sk8ter”
buddy here to open an Internet store or run Auctions that
sell skateboard equipment. Niche marketing is a good thing.
But in his overall business, he should look for other
products with which to eventually run other Online Stores or
Auctions as well. One store leads to two, two lead to four,
and so on. Never get stuck limiting your entire business to
just one type of product!
An Email from a person who
only thinks they can sell what they know
about goes like this:
I’ve been riding horses all my
life, and I own a small stable where I teach riding. I’m
opening an Internet Store where I’m going to sell all kinds
of stuff that other riders will want to buy. I’ve got to
find a Wholesale Supplier for saddles and Western Wear and
Again, this person’s first
problem is going to be that he may not find a
Wholesale Supplier of the products he knows so well, that's
willing to work with Home-based Internet Businesses. But,
we’ll get to that in a bit.
His second problem is similar
to the first person’s problem, but not exactly the same.
This person isn’t fixated on selling only what he likes;
he’s just a little bit scared of having to learn about
something new. He’s obviously going where he feels
safe.That’s okay, but let’s remember
what I’ve mentioned twice so far: he may not find a
Wholesale Supplier for the products he likes. Genuine
Wholesale Supplier do not grow on trees, folks, and most of
those who are out there do not want to work with
Home-based Businesses. There isn’t one available to
you for every possible type of product. It’s very important
to keep that in mind when you start out!
So, what does this person need
to do? He needs to understand that being in business is
about learning new things every day. New ways to
market, new software to get used to, simpler ways to do his
monthly books, etc., etc., etc. Learning new products
is just as critical. Again, never limit your business to
just one type of product.You don’t have
to like what you sell. You just need to make money
An Email from a person who
only thinks they can sell what’s “Cool”
goes like this:
I’m looking for a Wholesale
Supplier of electronics, like MP3 Players, Plasma TVs and
such. Please tell me where to find them.”
A request for Wholesale
Supplier of electronics is a dead giveaway. Almost
everybody who starts a Home-based Internet Business
wants to sell electronics at first. It’s the Cool, Sexy
market, and even if you never sell anything, you can show
your friends your site and say, ‘Dude, I can get you an
Xlent deal on the hottest new stuff!
Electronics, like any other
Cool or Sexy market on the Internet, is not the place
for most people to start. That market is absolutely
flooded with other people who already had the same idea,
and the profit margins have plummeted. Why? Too many
inexperienced Internet sellers. They start price wars,
figuring they’re going to clean up by undercutting everyone
else’s prices by a little bit. Problem is, the second guy
comes along and undercuts the first one a bit. Then the
third person comes along and undercuts the second. And so
Pretty soon all you have left
are tens of thousands of people trying to sell electronics
for pennies more than what they pay for them, just to
advertise a slightly better price than their competition.
The person who wants to sell
Cool and Sexy stuff needs to understand that they are not
out here to look Cool or Sexy. They’re here to make
money. Four Slice Toasters and Propane Camp Stoves aren’t
sexy, but they sell and their markets are not overcrowded,
and that’s what the goal is.
Finally, an email from a
person who thinks they need to sell only the Hottest
Products on the Internet goes like this:
Can you tell me were I can
find out what the Top Selling Products on eBay are? I want
to know what everyone else is selling and get in on it.”
Look at it this way. If you
were in a giant field filled with nothing but concession
stands selling Salted Peanuts, what’s the smartest thing you
could do? Set up yet another Salted Peanuts stand, or
set up a Lemonade Stand?
I’d sell Lemonade, wouldn’t
In our business, we look at
the Lists of Top Selling Products on the Internet, too. Then
we run the other way as fast as we can. We don’t want
to be just another face in the crowd selling the same thing
as everyone else. We want to think about products that may
be complementary to the Hottest Sellers, that not
many other people are selling.
If everyone and
their Grandmothers are selling Salted Peanuts, we
want to be the ones selling Lemonade. :o)
that’s constantly misunderstood by people trying to run a
home business on the Internet is the word “Wholesale”.
Some people think that working
with a real Wholesale Supplier means that they will
magically be able to sell products for less than anybody
else on the planet, for ever and ever. They’ll be the only
one who ever gets such good prices, and they’ll earn
millions because no competition can touch them. They’re
retire happily in a couple of months, and buy a big house in
Beverly Hills, complete with a butler, a private chef, and a
little satin doggie bed in every room for the casual use of
the family Basset Hound, Duke.
Then they find that they may
actually have to compete with companies who have more buying
power and get better price breaks, and suddenly the
honeymoon is over. They run around screaming that the
supplier is not a real Wholesale Supplier, and is cheating
them. The sky is falling, and it’s time to get Duke to the
storm cellar because all their dreams are being blown away
by bad, BAD people who claimed to be Wholesale Supplier, and
really are NOT!
The truth is that they’ve
simply been confronted with a perfectly normal aspect of
retail sales that they had not anticipated, and need to be
when using genuine Wholesale
Supplier, you're going to
find some stores selling products at a "retail" price that
is lower than your Suppliers’ "wholesale" price. There are
VERY good reasons why you'll see this happen, and it's
extremely important to understand why it happens and what to
do about it in order to sell successfully on the Internet or
As I said, it
happens for a variety of reasons; the most common of which
is that the retailer with the "lower than wholesale" price
is a large retail operation that bought THOUSANDS of the
product at a dirt-cheap quantity price break, and also
qualified for huge manufacturer's wholesaler rebates. You
can't compete against that with a home business; no one can.
term "wholesale" is relative, no matter who your distributor
is or how you find them. What you're getting as a small
business is a Wholesale
Supplier's genuine "first
level" wholesale price.
example, one factory-direct
Wholesale Supplier we work
with has an initial wholesale price for 1 to 36 dart boards.
Then the second price level is reached, and there's a lower
price for 36 to 72 boards, for example, then a lower price
for the next higher quantity level, etc. When dealing with
single item orders in your home business, you are obviously
going to be getting the "first level" wholesale price.
Again, wholesale is a relative term. Yes, genuine
DO sell at significant discounts below Manufacturer's
Suggested Retail Price. However, you have to watch what you
sell. Electronics, for example, are a very tough market,
because EVERYBODY is trying to sell electronics on the 'Net
right now. All these people are so busy trying to undercut
each other that they have driven the "market price" of these
items down so low as to make it very difficult to make a
profit, even at wholesale.
example, if the Manufacturer's Suggested Retail Price (MSRP)
for a VCR is $149, and it is available at "wholesale" for
$69.00, that's a 54% discount off MSRP. That's a pretty good
profit, right? However, with everybody getting roughly the
same price break, there are a lot of people out there who
are ruining the market for everyone else by selling that
product for, say, $79, thinking they will undercut everyone
else and make money by selling volume. Pretty soon, everyone
else sees this, and tries the same thing. Eventually, the
Internet "market price" for this VCR BECOMES $79, and
everyone is flooding the market with it at that price.
That's only a 13% percent profit margin, and that product is
no longer worth the effort for anybody.
even though the product IS available initially at a great
wholesale price, its market value is ruined by those who
(wrongly) assume that the only way to sell is to have the
absolute lowest price anywhere.
is much more of an art than that. If selling something were
simply a matter of the absolute lowest prices, Wal-Mart
would be the only store on the face of the Earth.
going into too much detail, sales is a mixture of choosing
the right product, or combination of products, for your web
site. It's presenting a clean, attractive, focused site.
It's giving the customer some little value-added bonus at
your site. It's providing the absolute best customer service
that you can. All these things help a customer to trust you,
and when they trust you they are willing to spend a little
more to buy from you.
of our retail sites is www.ElectronicDartShop.com. We sell
Arachnid Electronic Dart Boards there. We sell ONLY those
products on that site; just 14 of them. Our site is clean
and attractive. We have a page listing all the rules for all
the dart games that can be played on those boards. We pay
very careful attention to customer service. And guess what?
We are NOT the lowest priced store for those dart boards, by
any means. Yet we are one of the highest-volume Internet
dealers of the products around, according to the factory.
Why? Our customers trust us, and are willing to pay a little
more because they feel they will get more value from us than
they will from some guy who just throws up a cheap-looking
site full of all kinds of unrelated products and only pays
attention to price-cutting.
fact, a few days ago, I went online and bought a couple of
SmartMedia memory cards for my digital camera. I could have
gotten them for a very cheap price that I found on the 'Net,
but I chose to pay $5 more each for them because the
cut-rate site looked cheesy, and I was not sure I could
trust them. I was more than happy to pay the extra ten bucks
total when I found the same products at a higher priced
site. The site was well-built, easy to navigate, and went
out of it's way to explain it's customer service policies to
me. I'd rather spend an extra ten bucks and be confident
that the cards would show up at my door than lose thirty
bucks plus shipping to a site I didn't feel I could trust.
a small business owner, you should remember to choose
comparison areas very carefully. Too many people simply go
to the big search engines and look for the absolute lowest
price on earth, and then give up on selling that item if
they can't beat it. That's the wrong approach, as I've
mentioned above. You need to be comparing prices against
sites that will be seen in the same places that your site
will be seen, and even if your prices are higher, you can
bring in sales by building a clean, focused site.
Alternatively, you can simply sell the models that others
are NOT selling. After you begin to earn some profit, you
can then start to buy and stock the better sellers in
quantity, lowering your price, if you really want to.
then, you're going to run into stores that stock a lot of
merchandise, and are getting price breaks on greater
This allows them to sell at a lower price.
Go around them.
Sell models that they don't, from the same brand names. You
don’t have to purposely go head-to-head with the big
superstores. They don’t carry every product ever made on
earth. Sell something in the same general brand and product
lines that they DON’T have the shelf space for!
reasons mentioned above, there are also too many people who
buy entire pallet loads of last year's closeouts,
liquidations, and refurbished goods, and claim that they are
NEW. They get that junk at "rock bottom" prices, and of
course, sell them dirt-cheap, fooling the customer (and
other Internet retailers) into thinking that they have the
corner on the best wholesale prices around, when they DON'T.
thing is to work effectively within the framework of
available products and prices, and work around
those who have millions of dollars available to stock
inventory. That's what THEY did in order to EARN those
millions in the first place. You can do it too. I know it's
frustrating to be just starting out, and thinking that you
can't succeed because of competition from large stores.
That's just not true. We're succeeding at it, and so are
thousands of others. You just have to be willing to be
flexible, and to make serious decisions for the good of your
business. You may have to give up selling certain products
that you personally like, in order to make money on other
products whether you like them or not. You’re in business to
make money, not to satisfy your personal taste.
thing I tell people all the time is that it’s very important
to “jump through the hoops” and form a LEGAL business. It’s
the right thing to do, and it’s the ONLY way to work with
GENUINE wholesale suppliers.
in business will tell you that the hoops never end; not for
home businesses, and not for big businesses either.
Even the big guys spend much of their time
"hoop-jumping" in order to be successful.
how the purchasing agents at CompUSA feel when they spend a
million dollars on 19" monitors so they can sell them for
$329, and a week later, they find that Best Buy spent
three million buying up the same monitor at a better
price break, and is now advertising them for $298. Suddenly
CompUSA can't compete.
Should they throw
a tantrum, and berate the Wholesale Supplier for simply
performing the normal function of a Wholesale Supplier?
course not. They can simply stop advertising that monitor by
itself, and bundle it with an entire computer system that
has it's own serious price breaks, and move
the monitors that way. Adapt and improvise.
There are no
magic bullets, even though there are plenty of people who
will tell you that there ARE. Don’t believe them! When
you’re in business you will always have to compete. It's all
part of sales, on the Internet or anywhere else.
If you want to
start your Home-based Internet Business for very little
money, you need Wholesale Suppliers who Drop
Why? Because working with drop
shippers eliminates the need for you to carry expensive
inventories. You don’t have to rent a warehouse, hire
employees, establish accounts with UPS and FedEx, etc. You
can sell the best brand names on earth from your home
computer, and make good money at it.
Suppliers who drop ship send
the products you sell directly from their warehouse to your
customer, with your business name on it. All you do it take
the order from your customer and pass it to the distributor.
You keep the difference between the wholesale price the
distributor charges you, and the retail price you sell to
your customer for.
Of course, there are a lot of
places out there that want you to THINK they are wholesale
drop shippers. They’ll set up accounts with, say, 10 real
drop ship suppliers. Then they’ll call themselves something
like “GetYerStuffHere.com”, and claim that THEY are
the wholesale drop ship supplier. Then it’ll go like this:
will place advertising all over the Internet proclaiming
to be the greatest source that ever existed for all
kinds of great products, and they’ll drop ship all those
products to your customer.
You’ll get all
excited because YOU can actually place everything from
Sony electronics to Coleman Camping gear on your web
site and sell it.
will charge you an account setup fee,
to cover their “processing”. (Note: REAL Wholesale
Suppliers almost NEVER charge you an account
will send you a nice, shiny list of products and show
you where to get the product images and descriptions to
place on your web site.
You’ll get all
excited, and put all this great stuff on your site, set
your prices so that you can make a profit over what
You’ll launch your
site, and you hardly sell a thing.
Huh? What happened? Nobody’s
buying! You can’t survive on just a few orders a month!
Disappointed and discouraged,
you start to go out and check other web sites that carry the
same products. Maybe they have better images. Maybe they
have cooler descriptions. Maybe their pages look nicer. You
find that it’s none of those things. So what DO you find?
The other sites’ PRICES are
lower. A LOT lower.
You just got nailed by one of
the most popular scams on the Internet.
GetYerStuffHere.com took you
for a couple of hundred dollars in exchange for a CD full of
product images. They may have even locked you into a
contract where you have to pay them every month to be a
“member” of their “distributorship”.
Oh, GetYerStuffHere.com DOES
ship the products they claim to. Of course they do. It’s
just that when they get an order from you, they turn around
and place your order with the REAL Wholesale Supplier, and
take a profit. By the time YOUR price is calculated, you’re
paying not only wholesale, you’re paying
GetYerStuffHere.com’s extra markup of anywhere from 10% to
In order for YOU to make a
profit, you naturally have to mark up the prices you get
from GetYerStuffHere.com. By the time you do that, you can’t
compete on the ‘Net. Your prices are just too high.
At this point, you can do one
of two things:
You can lower your
prices to the point where you’re making mere pennies on
your products in order to compete.
You can bypass these
jokers and go to the REAL sources.
I’ve been in Systems
Engineering for 19 years. I’ve been involved in ECommerce
since it began. In that time, I’ve seen this scenario played
out over and over with companies I’ve done work for.
The real sources can be hard
to find. They don’t market themselves as Internet Wholesale
Supplier. They are established wholesale companies who have
been supplying big chains like Sears and Kmart for a very
Many of them are now realizing
that a good part of their future lies in Internet sales, and
they are establishing drop ship and light bulk wholesale
programs. There are even a few big name manufacturers
who are beginning to supply Home-based Internet Businesses
right from their factories. That’s where YOU need to be. In
direct contact with the actual Wholesale Supplier or factory
When you’re looking for a drop
shipper, here are a couple of things to be careful of:
Any company that
tells you that they’ll set up your entire web site AND
PROVIDE THE PRODUCTS FOR YOU will NOT make you rich.
They’ll make THEMSELVES rich on your setup and hosting
fees, and you’ll piddle along with thousands of other
small sites all selling exactly the same things at the
(NOTE: Don’t confuse this
with companies who just offer to set up your ECommerce web
site. There are a lot of great places out there that will
build and host sites for you. It’s when they tell you that
you HAVE to sell the products that THEY provide that you
should run for cover.)
Any distributor who
wants you to pay a “membership” or “setup” fee is
probably not a true Wholesale Supplier.
If it sounds too
good to be true, it’s too good to be true.
We've just finished several
months of development on a new software product here at
Worldwide Brands, Inc., and it's now available to you as a
FREE TRIAL. I'm very anxious to tell you about it; I'm
sure you'll be as excited about it as we are. :o)
First, though, I'd like to
tell you why we spent all that time and energy,
working with many very successful ECommerce experts, to
develop this new software.
For years now, through all the
time I've been working in and writing about ECommerce, I've
always come across one single question far more often than
any other. It's a question everybody has, and nobody
seems to be able to answer easily. What's the question?
"What should I sell on the
People email us and ask us
that all the time. People call us and ask us where they can
find out how to make that decision. I myself have struggled
with it many times. Lots of people know what products they
want to sell Online. Nobody really knows ahead
of time if those products stand a chance of making you
If you really want to know the
answer to that question, your only choice is research,
and lots of it.Based on years of experience,
here's the basic process that we and many other successful
Online Retailers would go through every time we try to
decide on a new product to sell on the Internet.
Find out what the
Demand for the product is:
If I'm going to be a food
vendor at a baseball game, what should I sell there? I
may really like salted peanuts. Maybe I get up every
morning and eat salted peanuts for breakfast, and drink
a salted peanut flavor Power Drink. Than I have a salted
peanut sandwich for lunch, and two processed salted
peanut patties on a bun for dinner. So, I really love
salted peanuts, know a lot about them, and think they're
the greatest thing in the world.
Does that mean that I
should sell salted peanuts at that baseball game? Well,
it's something that I know people like to eat at
baseball games. I know people do buy them at baseball
games. However, there are things I don't know yet.
For example, how many
people at that particular game are likely to want to buy
Generally, salted peanuts
are a good bet to sell at a baseball game. However, I
may not know the area very well. If I'm a traveling food
vendor, following sports seasons through the country in
different states and different kinds of weather, salted
peanuts may not always be a good idea.
Salted peanuts are pretty
good when they're fresh and slightly oily. During the
summer, people just eat them up left and right at
baseball games. During cold weather, though, they tend
to get more dry and crunchy, and the salt doesn't stick
to them very well because the oil gets hard. If it's
cold enough, eating salted peanuts outside can be a bit
like chewing gravel. Yech!
Weather isn't the only
problem. If it turns out that the game I'm going to sell
at is a special event to raise money for the Worldwide
Allergy Sufferer's Foundation, I will probably find that
many people there might have an allergy to peanuts of
any kind! That means that there is a much lower demand
for my product than I'd like.
So, where is the game I'm
going to be selling at? Is it a cold-weather game? Who's
sponsoring it? Are there likely to be many people there
who can't eat salted peanuts?
These same ideas, silly as
some of them might sound, apply to Internet Sales as
well. After all, the Internet is just another place to
sell products. The basic concept of Demand is the same
there as it is anywhere else, and has been for all time.
If there aren't enough people who want it, there's no
profit in selling it!
When we at Worldwide
Brands, Inc., want to know what the Demand on the 'Net
is for a product, we spend many hours, and sometimes
To find out what the
Demand for something is, we need to find out how many
people are searching for it in the Search Engines.
We try to find out how
many people are using those Search Engines to look for
the product we want to sell, then we categorize that
information according to the different search term
variations people use.
For example, if someone
were searching for a place on the Internet to buy salted
peanuts, they might use the search term "peanuts,
lightly salted", or the search term "salted peanuts", or
many other variations. We have to try to think of what
those variations might be, and find out what the Demand
is for each of them. Overall, we're looking for numbers
on just how many people are searching for our product
using different search terms. The more people who are
searching for it, the higher the Demand.
Once we have those
numbers, we go on to the next part of our research.
Find out what the level
of Competition is:
So, what else do I need to
know if I want to sell salted peanuts at a baseball
Well, I've done my Demand
research. I know that this particular game will be a
summer game, so the peanuts won't get cold and crunchy.
So, I know I have a good Demand for the product.
Now, I need to know what
my Competition will be like. Before I pack up my peanuts
and go to that game, don't you think I should try to
find out how many other vendors I will be competing
If there are fifty other
vendors in the stands selling salted peanuts, I do not
want to be 'salted peanut vendor number fifty-one'!
So, I'm going to do some
more research. I'm going to contact the ballpark's
management office, and try to find out how many of the
vendors at the ballpark are planning on selling salted
peanuts. They may not know exactly, but they'll have an
idea. If there are fifty other vendors selling salted
peanuts, I'm going to ask how many vendors are selling
lemonade. I may not like lemonade. Maybe the taste of it
makes my face scrunch up and look goofy, and the sugar
gives me the squeaking jitters.
However, if there are only
five other vendors selling lemonade, I'm going to screw
together my courage and darned well sell lemonade at
that ballpark instead of salted peanuts. Knowing salted
peanuts as well as I do, I know there are going to be a
lot of thirsty people there, with fifty salted peanut
vendors roaming around.
Again, the internet
is the same way.
The 'Net is
just another place to sell things, and if there are too
many people selling the same things, nobody makes any
money on them. That's what we're here for, after all,
right? We're in this ECommerce thing to make money, not
to satisfy our personal taste.
Once again, when we at
Worldwide Brands, Inc., want to know what our
Competition is for a new product, we spend many hours,
and sometimes days, researching on the Internet.
What are we looking for?
When we look for our Competition, we know that there are
two basic ways that people sell on the Internet. They
use Internet Stores, and they use Auctions. So, we need
to look at both.
We start with a dedicated
Internet Store shopping site with a high degree of
popularity; Yahoo Shopping. We spend hours in there,
acting like a customer, using different search terms to
search on the product we want to sell. We find out how
many Stores sell only that exact product, how many sell
products similar to it, and how many sell the exact
product and others similar to it. We look at which
Stores have higher popularity, and which of those
feature our potential product more prominently than
We break all those numbers
out into categories, and write all that information
down. Then we go to the next part of our research.
Find out what the
General Interest level is
Salted peanuts are a bit
of a "gimme" in this area. Everybody knows what they
are, and most people like them. On the Internet, though,
it's important to find out what the general level of
knowledge and interest is for a product before trying to
Here at Worldwide Brands,
Inc., we go out to one of the big Search Engines, and
search for our product again under many search terms.
This time, though, we do it not as a customer, but as
someone interested in information about the product.
Kind of like the difference between wanting to buy a
package of salted peanuts, and wanting to write a school
report about how they are grown and packaged.
General interest in a
product helps to gauge where our Demand and Competition
numbers fall into the big picture.
For example, if there
isn't much Demand for a product, and there isn't much
Competition, it would seem that it might not be a good
seller. You can't sell something to people if they're
not out there looking to buy it. If there aren't many
people out there trying to sell it, either, then it's
probably not a good idea.
However, if there is a lot
of General Interest, it may be that we've stumbled
across the Holy Grail of Internet Retail research; the
fabled Untapped Product Market!
That's rare, but it
happens. People find Untapped Markets, and begin to
exploit them through associative advertising (advertise
a more common, related product to lead people to a new
However, as I said, the
more common use for General Interest information is to
help us understand what our Demand and Competition
Once we have General
Interest numbers, we go to the next part of our
Find out how others are
Advertising this product:
Let's say that based on my
research so far, I think I can make a good business out
of selling salted peanuts. I'm not just going to sell
them at baseball games, either. I decide I want to place
an ad in my local Yellow Pages, and sell salted peanuts
to a lot more people.
Should I just jot a few
words down, and send them off to the Yellow Pages
Of course not. My research
is still not complete. I'm going to need to see how many
other people are advertising my product in the Yellow
Pages. If there are a good number of them doing so, it
may mean that it's a good product to get into. And if it
is a good product to get into, I'm going to want to see
what others are doing with their ads to make them
So, I grab a copy of the
Yellow Pages, and turn to the "P" section. Lo and
behold, I find ads for salted peanuts. Some are big,
some are small. Some are cheesy, and some are pretty
interesting. I don't think there are too many ads to
compete against there, so I decide to run an ad. I'm
going to study the best elements from my competitor's
ads, and create a better one than any of them.
Same thing on the
Internet. If you're going to sell a product Online,
you're going to have to advertise it in some way or
another. Today, Pay Per Click Search Engines are the
dominant force in Internet product Advertising.
So, here at Worldwide
Brands, Inc., we hit the three most influential Pay Per
Click Search Engines; Overture, Google, and Findwhat.
That's where we begin our research.
Once again, we act like a
customer. We use as many search terms as we can think of
to search for the product we think we want to sell. What
we're looking for here is twofold:
How many other people
are paying to Advertise the product Online?
What do their ads look
like and say?
The number of other people
Advertising the product gives us a feel for whether the
product is overexposed. If there is too much
Advertising, that means too much Competition, which is
not a good thing.
The way other people's ads
look and what they say gives us ideas as to what our own
Advertising could say if we decide to sell the product.
We spend hours at a time gathering links to other
Internet Retailers' ads for the product, then looking
them over, comparing them and making our choices as to
which ones we like best. Then we combine the kinds of
elements we like from all of them, and create our own
unique Advertising, hopefully better than any of the
Finally, we move to the
last phase of the research process.
Analyzing all that
The Analysis process is
not easy, nor is it pretty! It involves spreadsheets and
charts and graphs and links and lots of time, cups of
coffee, bleary eyes and late nights.
We have to look at all of
the data we collected on Demand, Competition, and
Advertising, and make a decision as to how they all
Here are some of the
issues to consider:
Not enough Demand (as
compared to Competition) means not enough people are
going to buy.
Too much Competition
(as compared to Demand) means not enough of a profit
to go around.
Too much Advertising
drives up the price of Pay Per Click ads, and
increases Competition as well.
Not enough General
Interest, combined with a low Demand, means that
there may not be a good market even if there is some
Competition out there trying to make the sales.
Those are just some of the
things we consider. Overall, we compare all the various
Demand, Competition, Advertising and General Interest
numbers against each other, and use our own unique
formula to make sense of it all.
Still with me? I know it's
taking a long time to get to the point, but it's important
that you understand the research process first!
Here's the good part of the
Several months ago, we were
batting ideas around with Jon Wittwer, developer of the
Market Matrix. Jon was telling us that he had based his
Excel Spreadsheet-driven Market Matrix partly on information
he read on our site. Funny how these things work. :o)
Jon's Market Matrix gathers
all that detailed research information we talked about above
automatically, by searching the Internet. We thought
that was great. However, it still didn't complete the
research process for us. We still had to manually
sift through all that data and apply the unique
research formula we use, in order to make sense out of
all that information.
Somewhere along the line, a
light bulb magically appeared above our collective heads. We
said, what if we could combine some of the functions of
Jon's Market Matrix with our own unique research formula,
and build the whole thing into a computer program?
Great things can happen in the
course of a phone call and a cup of coffee, folks. Believe
We had just realized that we
could completely automate this entire
time-consuming manual research process!
With Jon's blessing, we forged
ahead into developing that software. Well, it took months to
do that, as I said. Our Programming expert, who is the most
good-natured human being I have ever met, worked so long and
so hard that he almost got annoyed once! That was a first.
:o) My Business Partners, myself, and our Research Team also
put in a great deal of time and effort into combining
automated information-gathering techniques, and our own
research formula, into a single piece of software.
The Market Research Wizard
does in minuteswhat it used to take
hours, or even days, to do.
It's a computer program in
which you can type a couple of words describing the product
you want to sell, and less than a minute later, gives you an
actual Analysis (from 0% to 100%) of that product's chances
of success on the Internet.
It connects to the Internet
and automatically collects all the information I
talked about above, usually in less than a minute.
Demand, Competition, Advertising, and General Interest.
Then, it uses our own unique formula (the one that I said we
use ourselves, to make sense of all that data) and generates
an instant Analysis.
That's not all, either. It not
only tells you how much Demand there is for the product you
want to sell; it tells you what key words you should use to
market that product if you decide to do so.
It not only tells you how much
Competition you have; it tells you where your
Competition is, so you can decide if the product is better
marketed in an Internet Store, or an Auction.
It not only tells you who your
competing Advertisers are, it gives you clickable links
to their ads, so you can study and out-Advertise the
It also allows you to export
all your instantly generated research information to any
Spreadsheet program, print your research, recall all your
past research on any product, and more.
All in just minutes.
Now, remember what we say all
throughout our web site and published information, folks.
There is no magic bullet! The success of your business
depends on many things, and proper research is just one of
However, if you can take a
process that you're not sure how to do properly, and have it
done for you, the right way, you're greatly
increasing your chances of success.
Along the same lines, if you
can take a process that normally takes hours or days to
do manually, and do it in minutes, you're gaining
yourself a heckuva lot of time that can be used to
concentrate on the rest of your business!
If you've subscribed to our
Newsletter for any length of time, and you've been through
our site and free information, you know that we are not into
making heavy sales pitches. That's why this Newsletter goes
to such great lengths to describe the manual process that
we've used in the past to do our product research.
So, if you like, you can try
the manual research process that I described above.
Or, if you like, you can go to
Click Here, and download a FREE TRIAL of our new
Market Research Wizard. It won't cost a cent to try it,
and we know it will save you a tremendous amount of
time, while helping your business succeed.
Using a Drop Shipper is a
great way to sell products on the Internet. A legitimate
Drop Shipper is a manufacturer or a wholesale
distributor who will send products one at a time
directly to your customers for you, from the warehouse. You
never have to buy inventory up front, and you never have to
pack and ship products yourself.
All you do is place images of
those products on your Auctions or Web Site, and you collect
on every sale without ever touching the product.
Here at Worldwide Brands, our
entire business is dedicated to making sure people have
accurate, up to date information about legitimate
Drop Shippers and Light Bulk Wholesalers.
As we warn throughout our
site, there is one constant thing in Internet Drop Shipping
that you need to watch out for. Over and over again, you are
going to see companies who do their best to make you think
they are real wholesale drop shippers, when they are NOT.
Companies who are NOT real drop shippers are middlemen
whose sole business is to dip into your profits, by
getting in between you and the real drop ship
Drop Shipping 'Agents' are a
particularly interesting example of this. You see, they DO
provide access to one, two, or maybe a few REAL drop
shippers. However, they are STILL a MIDDLEMAN.
There are two problems with
using Drop Shipping 'Agents'.
They ARE middlemen. They
charge you recurring monthly and/or annual fees that you
should not have to pay in order to access the real drop
shippers they provide access to. You should never pay a
recurring fee for the 'privilege' of placing orders with a
real drop shipper!
You'll find the competition
impossible to deal with. Most of these 'Agents' only give
you access to one drop shipper. Even those 'Agents' who give
you access to several drop shippers (and charge you more for
it!) are doing something that can bury your business before
it gets started. They are causing intense competition! They
are going to advertise their service all over the Internet.
Thousands, or even tens of thousands of people will pay for
it. Guess what happens then? YOU, and all of those thousands
of others are all trying to use the SAME small handful of
Drop Shippers! The competition becomes way too intense, and
you'll never sell anything!
Let's take a step back and go
over the whole issue.
A real wholesale drop shipper
ALWAYS owns their OWN warehouse. They have offices in, or
attached to that warehouse. It's a physical building, with
walls, windows, doors, maybe a few trees outside on the
lawn. There is a loading dock, where trucks back up and
deliver pallet loads of products. They have people working
for them in that warehouse. The people who run their web
site peek their heads out of the office doors and say, "Hi,
Wanda!" and, "Hey there, Mike!" to actual human beings who
work there, receiving inventory from manufacturing plants,
packaging orders for drop shipping, putting a new filter in
the Coffeemaker, etc.
Drop Shipping "Agents" work
very hard to make you think they own their own warehouses.
There are some who are very good at that. They tell you that
you can access thousands, or even tens of thousands of
products from their 'warehouse', or from many of their
different 'warehouses' in different locations.
Again, here's the first
important part. Drop Shipping "Agents" do NOT own their own
warehouses. They are MIDDLEMEN.
No matter how many products or
warehouses these people claim to have, they don't have a
single one. They're just sitting in a house or a rented
office somewhere, thinking up clever web site text and new
ways to make you think they are the real thing.
Some of them are even more
clever. There are 'Agents' out there who will actually TELL
you that they ARE 'Agents'. They'll tell you that even
though they ARE 'Agents', they don't really make any money
by acting as a middleman. Some of them want you to believe
the do it out of the goodness of their hearts. Others will
tell you that they make their money only from your
'Membership Fees'. However they say it, they usually bury
this information in their sites, hoping you won't pay
attention to it, and they sugar-coat it in such a way that
it sounds really good to you if you DO realize what they are
Here's how they operate:
1. They go out on the Internet
and find one, two, five, or maybe even ten real wholesale
2. They contact these real
drop shippers, and say, "Hey, send us a list of your
products and a bunch of pictures, and we'll help you sell
them online through OUR order system". Most real wholesalers
know better than to deal with something like that. However,
there will always be some who will go along.
3. They create a web site that
makes it look for all the world that they are the Universe's
Answer to Drop Ship Warehousing and Wholesaling.
4. The small ones simply have
one group of products you can order. When you place an
order, they will turn around and send that order to the real
drop shipper, who will send it to your customer.
5. The bigger ones will tell
you that they have a whole bunch of "warehouses" all over
the place, with clever names. North Warehouse. South
Warehouse. East and West Warehouses. Pink Warehouse. Blue
Warehouse. Plaid Warehouse. You get the idea, right? They'll
tell you that you can order from any one of those
"warehouses", for a price. Some of them give you one or two
"warehouses" for your initial 'Membership Fee', and then
jack up the 'Membership' cost if you want to order from more
of their "warehouses". Again, these people don't have any
warehouses! Their "warehouses" only exist in cyberspace!
Each “warehouse” is nothing more than a collection of
product images that these middlemen got from a wholesaler
that YOU should be working with DIRECTLY, instead of paying
some 'Agent' a FEE for the privilege. When you place your
orders, those orders will simply be turned around by the
'Agent' to the real drop shipper for fulfillment.
Some of these "Agents' will
tell you that it's better to work with them, even though
they ARE 'Agents' because they are "centralizing" your
ordering and shipping. Believe me, we've been in this
business a long time, and we've never seen an ordering or
shipping issue that was enough of a problem to justify
ordering through middlemen. Not ever.
Is this illegal? No. Is it a
Scam? No, not usually. It's just a very poor business idea,
in our experienced opinion.
Think about it the second part
of the problem again. These people are offering you an
indirect (middleman) route to a small handful of drop
shippers. They'll promote that same small handful of drop
shippers to tens of thousands of people like yourself. Do
you really think you'll be able to compete with thousands,
or tens of thousands of others, who are all trying to sell
the same products from the same small handful of drop
shippers? Not a very pleasant thought, is it!
Would you say it's a good
business decision to take a middleman route to a very small
number of drop shippers being used by a huge crowd of
For people who are starting a
Home-based ECommerce Business, one of the things that's least
understood by most is the need for basic Market Research.
There are far too many people failing
out there because they simply grab any product they can get ahold
of, slap it in an Auction or on a web site, and expect it to sell.
A couple of days ago, I got an email
from someone who was thanking me for the free information about
ECommerce that she found on our web site. She, like most people, had
been struggling with the concept of Wholesale Distributors and
Wholesale Pricing, and had found the answers she needed on our site.
Somewhere in her email, she happened to ask me how I first learned
about Wholesale Distribution.
Now, I've spent years writing
ECommerce articles that have been published in many different
languages all over the world. My company, Worldwide Brands, Inc.,
teaches people through our web site, and our Customer Service
department, all about Wholesale Suppliers, ECommerce, Market
Research, and much more. I'm also a Founding Partner in a Wholesale
Distribution company in New York. So, I've been around the business
for a long time, and learned a lot along the way.
As I started writing all those things
in my reply to this person, I realized that she hadn't asked for my
resume! She had asked where I first learned about Wholesale.
It occurred to me that I actually
learned about wholesale long before I ever grew up and went into
business. The few simple things I learned about wholesale back then
apply so well to ECommerce today that I just had to tell her (a
shorter version of!) the following story:
Long, long ago, in a neighborhood far,
far away, Chris Malta began learning about Wholesale. He was just a
tyke then, only ten years old. Chris wanted to earn some extra money
for the upcoming Christmas Season, way back there in 1970.
He tried shoveling snow out of
people’s driveways, but there’s a lot of snow in Western New York
State. Big trucks with nasty old snowplows kept driving by and
shoveling the snow back into the driveways. He tried doing chores
around the house, but there really wasn’t enough to do to earn him
the Christmas Money he wanted.
One day, Chris’s mother realized his
plight. An astute businesswoman, she looked down at him and seemed
to come to a decision.
“Why don’t you get your coat”, she
said. “I’ll show you how to earn money like the grownups do”.
Half an hour later, Chris and his Mom
were at Beansy Altman’s Wholesale Outlet, in downtown Rochester, NY.
It was a ramshackle place, shivering in the winter shadow of an
expressway overpass; a big old four-story brick building that looked
almost abandoned. Inside, though, it was warm, and there was a
bustle of people weaving their way through stacks of crates and
boxes. They were picking this or that item out of this or that crate
or box, looking at it, and moving on.
Through the dim lighting and the smell
of damp cardboard, Chris saw an old man waving to his mother.
“Millie!” he said, “did you bring a
helper with you today?”
Chris’s Mom smiled and said, “Beansy,
this is my son, Christian. He wants to earn a little Christmas Money
“Ah!” smiled Beansy. “Another
businessman in the family! Well, all right. We want Christmas Money,
we look at Christmas things!”
An hour later, the trunk of Mom’s car
was packed full of thick, colorful Christmas candles, and little
decorative plastic Holiday wreaths that fit around the candles’
On the drive home, through the
gathering dark and a light fall of snow, Chris’s mother explained
the glorious concept of Wholesale to him.
“Mr. Altman sold us one hundred
Christmas Candles for twenty five cents each”, she said. “He sold us
the plastic wreaths that go around them for twelve cents each. So,
how much did we pay for the candles, just by themselves?”
Chris had to think for a minute. It
would be another two years before he would meet Mr. Irwin, a
wonderful teacher who would finally be successful in lighting the
Eternal Flame of Mathematics in Chris’s young mind. He struggled
through to the answer, though.
“Twenty five dollars for the candles”,
“Right”, said Mom. “Now, how much did
we pay for just the wreaths?”
Chris was warming up to the game.
“Right again. Very good! Now, tell me
this; how much did we pay for one candle and one wreath, together?”
Some more thought, and a quick
double-check on the trusty ole finger-calculator: “Thirty seven
cents!” announced Chris.
“Thirty seven cents”, agreed Mom. “How
much do you think they’re charging over at Woolworth’s for those
same candle-and-wreath sets?”
“A dollar twenty nine. They’re very
nice candle sets. I just bought two of them there yesterday. So how
much less than that did we pay for each candle-and-wreath set?”
That one set Chris back a step, but
before he could try to answer, Mom said, “That’s ninety two cents,
Honey. We got them for ninety two cents less than they charge in the
“Now”, Mom continued, “who do you
think might like some of those candle-and-wreath sets?”
“Are you sure about that? Don’t you
think Mrs. Gallucci next door would like to have one or two?”
“Sure, I guess”.
“Sure she would!” said Mom. “How about
the rest of the neighbors? Mrs. Furius? Mrs. DiCiacci? Miss Cerasani?
Mrs. Beilaski, Mrs. Carlevatti, Mrs. Toth, Mrs. Sengle, Mrs. Cook,
Mrs. Sadack, Mrs. Anderson…”
The list went on and on. Mom knew the
neighbors’ names like she knew the names of her own kids. As she
spoke, Chris’s eyes grew wider and wider with the realization that
he was going to sell those candle-and-wreath sets to the neighbor
ladies, and make his Christmas Money!
Mom continued; “Now, how much do you
think they’d like to pay for those sets?”
“A dollar twenty nine!” Chris declared
“No!” said Mom. “If they have to pay
the same price they pay in the store, they might not decide to buy
them. But, if they find out they’re getting them for less than the
store sells them for, and they don’t have to drive through the snow
to get them from the store, they will want to buy them. So, what you
do is charge a dollar for the sets. Do you know how much money
you’ll make if you sell all one hundred sets at a dollar each?”
“One Hundred Dollars!” Chris
Well, not quite”, said Mom. “After you
pay me back the thirty seven dollars I spent to buy the sets at Mr.
Altman’s place, you would make sixty three dollars!”
Well, thought Chris, it wasn’t a
Hundred Bucks, but still…Holy Smokes! Sixty Three Dollars! To a ten
year old kid in 1970, sixty three dollars was a fortune in spending
When they got home, Mom went over the
major points with Chris once more:
“Let them know that you charge less
than the store does for the exact same thing, and remind them that
they don’t have to leave the house to get it. They’ll buy it from
you, Hon. And you be sure to be polite and say Thank You!”
(Thirty four years later, Chris is
sitting at his computer keyboard, writing this article. Besides
getting a little misty over the memories, he is suddenly struck by
the amazing similarity between what his Mother suggested as a sales
technique in 1970, and the basic foundation of all Ecommerce today!
“Less than the store charges, and they don’t have to leave the
house…”. But, that’s not part of the story…not yet, anyway. Not
for many more years, for ten year old Chris!)
So, Chris went out selling Christmas
Candles, crunching through the frozen snow after school each day, in
early December 1970. He didn’t sell them all, but he paid his mother
back and made a nice pile of Christmas Money. His Mom put the
remaining candle sets in the attic, and he sold the rest of them and
more the following year.
During that year, and many others, his
Mom helped him make many other trips to Beansy Altman’s and other
wholesale outlets. St. Patrick’s Day, Easter, Mother’s and Father’s
Day, Fourth of July, etc., etc. With Mom’s help, Chris bought
seasonal products at wholesale all year round, and sold them to the
neighbors, at a reasonable markup, of course. :o)
Why did I think this story was
important enough to write an article about? Because it illustrates a
very important point. Whether my Mother did it consciously or not,
she arrived at a product for me to sell through Market Research!
Think about that story for a minute:
1. My Mother knew where my customers
were. They were right there in my neighborhood, within easy reach of
my sales vehicle; door to door selling.
2. She knew the "Demographic" of the
customers; they were middle-class women in their early thirties. In
1970, this was a group that was almost exclusively homemakers, thus
they were actively taking care of and decorating their own homes.
3. She knew that they would be very
receptive to buying a Holiday decoration from me, because (a) it was
the Christmas Season, and (b) what middle-class woman in her early
thirties in 1970 could resist buying something (at a bargain) from a
ten year old kid?
4. She knew who the competition was,
and what they were charging for the product; Woolworth's Five and
Dime Store, $1.29. That gave her the proper price point to sell the
product with the added convenience of buying it right at one's own
5. She knew where to get the product
at Wholesale; Beansy Altman's.
That's Market Research.
The basic concept, the core
business of what you and I do as Retailers, hasn't changed in 34
years. It hasn't changed in 340 years. It hasn't even changed in
3,400 years. Thousands of years ago, traders would travel to
distant cities, bring new and exciting things back to their
homelands, and place them on the ground in an open-air marketplace
for passers-by to purchase. Hundreds of years ago, merchants in the
fledgling US packed wagons full of goods in the East, and made the
trek out West, where they used those wagons as storefronts to sell
their goods to those who wanted or needed them. Decades ago, people
had wholesale supply companies deliver products to their retail
stores, where customers gathered to buy them. Today, we use email
and electronic ordering systems to have products sent directly from
the wholesale warehouse to our customers' doors.
None of it is possible, though,
without Market Research. None of those Retailers, from the
sand-whipped caravans on the ancient Silk Road to the manager of the
Woolworth's Five and Dime on Winton Road in Rochester, NY, would
have sold a thing if they hadn't known what the customer wanted!
So, before you get caught up in the
technological hype of instant online stores, cross-linking, mass
emailing, affiliate programs, blogging, search engine optimization,
pay per click advertising, etc., etc., etc., go back to the basics
for a minute or two. Think about who your customers are, who your
competition is, what your customers want, and where you can get it
at Wholesale. Without that, all the shiny new technological methods
in the world mean nothing.
We have a great deal of FREE
information on Market Research and much more on our web site, and
you are welcome to it at any time.
Even today, as far as I've come in the
business world, the image that comes to mind the most when I think
about sales is very simple. I can still see it like it was just last
week. Just me, by myself, ten years old, crunching through the
frozen snow, happily selling Christmas Candle after Christmas Candle
to my neighbors. Because my Mom knew they would buy them.