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Many people know they would like to start an Internet business, but they don't have a product to sell. The solution is often drop shipping.

Drop shipping is a business arrangement in which a company (often the manufacturer of a product) sells a product at wholesale prices to a reseller and ships the product directly to the reseller's customers. The retailer makes the company's products available to customers, often through a web site, collects payment, and then orders the product from the manufacturer. This arrangement works well for both the manufacturer and the seller. The manufacturer is able to make the product available to a large number of retailers. The retailers are able to sell products they would not otherwise have access to. Drop shipping allows almost anyone to start a retail company without needing to order large amounts of inventory. This eliminates the need to store the product and cuts overhead dramatically. The reseller only orders products after he has sold it, and in most cases only after being paid. For small businesses concerned about cash flow, this is very attractive.

There are two different philosophies concerning what items to sell via a drop shipper. You may choose whichever appeals to you. The first group believes that you should research the market to determine what items to sell. They say you need to find a high demand item, then locate a drop shipper that sells that item. The second group believes that you should sell what you are interested in. If you like knives, find a company willing to drop ship knives. If you like power tools, find a drop shipper for those. They believe that if you sell something you enjoy, you will do a better job selling. Whichever method you choose, an outstanding way to find a drop shipper is the web site, World Wide Brands (http://databuilders.net/wwb). The people at WWB work full time finding companies willing to drop ship their products for you, Their database is updated constantly to insure only the best companies are made available.

If you decide to go it alone and find a drop shipper yourself, look for a company that either drop ships exclusively, or requires you to register as a member before getting the wholesale prices. If anyone can log into the site and pay the same low price, why should customers buy from you? Many companies require you to provide a business license number before allowing you to register. This is to insure you are a legitimate retailer. If you do not have a license, you should get one. Ideally, the company will deal exclusively in the product you want to sell.

I also do not support companies charging for drop shipping. You may see some offers similar to "Sell hundreds of products for only $29.95 a month." They go on to tell you that you can make thousands of dollars selling their products on E-Bay, so the $29.95 they charge shouldn't matter. There are enough companies that don't charge anything. Avoid paying for the right to sell someone's product for them.

Perhaps the most difficult part in starting a drop ship business, is building the web site. If you have never built a web site before, it can be an overwhelming task. You must consider each detail, from deciding what software to use, to finding a host, and accepting payments. I recommend using osCommerce to build your online store. It is free software that can be modified to look like you want it to. There is an online knowledge base that can answer many of your questions about setting it up and configuring it, or you can let someone else set it up for you.

Thousands of people are making money using the osCommerce, drop shipping combination. It is a powerful, inexpensive way to get your business started.

About The Author

Jason Conley is the owner of Databuilders, a web hosting company for small and home office businesses. He has built a number of drop ship web sites using osCommerce, and contributes regularly to the osCommerce support forum. You can contact Jason at jkconley@databuilders.net, or visit Databuilders at http://databuilders.net.