If you don’t want to read it, you can watch this video.
I hear a lot of people talking about drop shipping and pushing programs but I don’t hear anyone talking about the mechanics of drop shipping, which is really about creating a professional relationship. This is the first professional relationship I formed with drop shipping. Now let’s talk about what drop shipping is.
Drop shipping is having access to inventory before you have to pay for it. Many people talk about the drop ship lifestyle. This discussion is not about that. This process is more involved and complicated. It’s not for the faint of heart.
When I used to sell on eBay years and years ago, I realized as a physical business, you’re always spending money. That’s when I figured something out by accident. One of my wholesalers had this big container of furniture. I wanted that furniture, but I couldn’t afford it. The name of the company was Coaster. They still exist.
I was there one morning at 6am. If you didn’t get there early, you had to wait all day. We were talking and they had these containers with a certain type of modern furniture, right? They didn’t even have catalogs. They just had pictures. So, I go ahead and get the girl to give me some of the pictures. I had a good working relationship with them because I was selling a lot of furniture on Craigslist.
So, I took those pictures and put them on eBay. Now understand, I was taking a big ass risk. Since this was not my inventory, I had no guarantee it was going to be available when I needed it. So, I created specials and promotions. I made a bunch of sales. Then I went in with about $20K and bought a bunch of furniture. I started doing this and developed a relationship where they started holding stuff for me. The lady told me something I did not know before. She told me I could put an order in, and I had two weeks to pick it up.
That’s when I started selling furniture on my eBay channel. I never bought the furniture upfront except in small quantities for two and a half years. For me, this strategy allowed me to get paid before I had to buy the inventory. I also started to do that on Craigslist.
As I became more successful, I started to run into some problems because the best-selling stuff would run out of stock. This brings us to the risky part of this strategy. If you do something like this, understand, if you don’t have that inventory locked down you could be in a world of hurt.
Fortunately, I had access to Coaster’s inventory. I could go online and see what they had. I realized that the information was not completely accurate. So, if it said they had 90 in stock, it was really 75 or something like that. I only got caught with my pants down four times and I had to refund the money and got some bad feedback. It was work. This was not automatic, but we were making a lot of money.
Now the second drop shipping strategy I used was Amazon’s CreateSpace to drop ship my books. Some of the haters would mention me having a garage full of books. I never had inventory. I did that for about three years. CreateSpace had a website where you could direct traffic, but I realized nobody would buy from that site. For some reason people would pay more to buy it off the Amazon site. That was another form of drop shipping.
Now I’m going to tell you the third and most powerful strategy. I discovered this with another furniture wholesaler. This was during a time when Atlanta was doing a lot of loft construction and modern homes, so platform beds became very popular. I actually have one in my bedroom. The design is low and sleek and you don’t need a box spring under the mattress. It was selling really well.
This company was based out of California. They had a warehouse here that wasn’t doing well. They actually shut the warehouse down. I was selling a lot of stuff. I was on the phone with a rep. and said, “I wish you could ship this stuff for me.” The dude said, “We could do that.” He said, “With your order history, we could do that for you.”
You can’t just walk in the door and do this. I set it up. I created special Craigslist ads for it. Since they were a wholesaler, I had to make the sale on my side. I had to have my own website. The bed cost $138 and I was selling it for $400 to $450 including shipping. I didn’t have to touch it. That happened because I created a professional relationship with the company.
I took that same business model and went to Boss Chairs. Now Boss was the major warehouse for the East coast. They were getting containers of chairs virtually every day, because they were shipping them out. There were certain brands and models that they had. I never worried about them being out. I sold a ton of them on eBay. I would go down there and give the money and addresses to this lady and knew they’d ship the furniture.
I’m going to tell you about one more option. This is something you can do. If you want to drop ship, what you need to do is get it out of your head that it is going to be easy. You need to let that shit go. This is why so many people are not successful and why so many people get scammed.
Typically, the best way for you to make a lot of money is to go out and create a relationship with a company that does not have a good online presence. Notice I said company. I did not say product.
Go to Hoovers.com. Search for the company. See how long they’ve been in business. You want a company that’s been in business at least five years. Find a company with products that you like.
A lot of people get in this with the attitude that they don’t care about the product as long as they make money. If you feel that way, it makes it real difficult to market at times. It really does.
Find a company and go in with this pitch. “Hey, I’ve been doing some research on your company and I noticed you were established in _____ year and your CEO is _______.” Go in armed with knowledge.
Then continue by saying, “I want to develop a relationship where I can make you a lot of money.” Then sit back and see what they say. Most people go in asking what the company can do for them. After the company responds, then explain what you want to do.
It is important to remember that a lot of companies that do really well are still offline. Over 80% of sales are still offline. So, find one of those companies and help them. Develop a marketing plan for them.
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