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Drop Shipping

What is drop shipping?

Drop shipping is a form of selling where the seller does not hold any stock. Instead they pass all orders and shipping details on to a drop shipper who processes and ships the order directly to the buyer on the seller's behalf.

The seller makes their profit from the difference between the retail price, at which they sell to the buyer, and the drop ship or wholesale price, at which they pay the drop shipper. 

Things you need to know if you want to make money from drop shipping

You will see advertizements all over the Internet from drop shippers but the truth is, if you take a close look at their prices, the margins available to resellers, given the ultra competitive nature of the marketplace, are far too small to stand any chance at all of making a profit!

In order for a reseller to make an acceptable profit they have to be able to mark the drop ship or wholesale price up by at least 50%. To illustrate what we are saying here let's look at an example of selling on Ebay using a drop shipper.

Drop Ship Price	Mark Up	Retail Price	Gross Profit	Ebay & Paypal Fees	Net Sale Price	Net Profit	Net Margin
$10.00	25%	$12.50	$2.50	$1.50	$11.00	$1.00	8%
$10.00	50%	$15.00	$5.00	$2.25	$12.75	$2.75	18%
$10.00	75%	$17.50	$7.50	$2.63	$14.87	$4.87	28%
$10.00	100%	$20.00	$10.00	$3.00	$17.00	$7.00	35%

The chart above clearly shows why you need a mininum mark up of 50%; even at this level as a reseller you will only make a net margin of 18% or $2.75!

The bottom line is if you are considering starting a drop shipping business pay careful attention to the mark up potential. It's easy to research your potential mark up, all you need to do is check out Ebay and Amazon to establish the average selling price of the items you are looking at selling. If you cannot mark the prices up by at least 50% DO NOT DO IT!!!

What Mark Ups are available if I use the Photo Gifts Mall drop shipping program?

Good question... the easiest way to answer it is by looking at a couple of example products that our existing resellers are selling on Ebay.

Product	Drop Ship Price	Mark Up	Ave Selling Price	Gross Profit	Ebay & Paypal Fees	Net Sale Price	Net Profit	Net Margin
Heart Charm Watch	$6.99	72%	$12.00	$5.01	$1.80	$10.20	$3.21	27%
Framed Tile	$5.99	67%	$10.00	$4.01	$1.50	$8.50	$2.51	25%
Belt Buckle	$5.99	100%	$12.00	$6.01	$1.80	$10.20	$4.21	35%
Golf Divot Tool	$6.99	72%	$12.00	$5.01	$1.80	$10.20	$3.21	27%

As you can see from the chart, our resellers are able to mark our drop ship prices up by between 67% and 100% on the products shown.

Now to be fair, it is not possible to mark the prices of all 300 plus products we have available up by 67% or more, but you can on the vast majority.

If you look at Amazon.com you will find products command a higher price. Let's look at the same products as above and see how selling on Amazon compares to Ebay.

Product	Drop Ship Price	Mark Up	Ave Selling Price	Gross Profit	Amazon Fees	Net Sale Price	Net Profit	Net Margin
Heart Charm Watch	$6.99	129%	$16.00	$9.01	$3.20	$12.80	$5.81	36%
Framed Tile	$5.99	150%	$15.00	$9.01	$3.00	$12.00	$6.01	40%
Belt Buckle	$5.99	100%	$15.00	$9.01	$3.00	$12.00	$6.01	40%
Golf Divot Tool	$6.99	115%	$15.00	$8.01	$3.00	$12.00	$5.01	33%

As you can see, it is far more profitible selling on Amazon. However, most of our existing resellers are more than happy to sell on both sites.

We invite you to check out our entire product list for yourself; that way you can compare our drop ship prices to the retail prices achieved on Ebay and Amazon and calculate profit margins for yourself. To view our products and prices click here.

Something else that makes us stand out from the competition

With a Photo Gifts Mall drop shipping account you gain unlimited access to our on demand technology platform allowing you to instantly create, customize and sell an infinite range of products.

You will find that gaining access to our technology platform is just as important as gaining access to our low wholesale pricing.

If you have ever looked into drop shipping before you will already know that there are thousands of people competing to sell the same products at ever decreasing prices; these price wars often get so fierce that some resellers even sell at a loss in an attempt to get rid of the competition! That is no way to run your own business!

Using our technology platform you will be creating your own unique one of a kind photo gifts. That means you will have no competition from other sellers and you can command a higher price for your products.

Take advantage of our customizable Delivery Notes

When we ship to your customer we always include a delivery note. As a Reseller you can design your own delivery note for inclusion with all shipments to your customers.

It is most important you take the time to create your own delivery note, you can drive traffic back to a website if you have one which will obviously help create more sales for your business. You can also use the delivery note to send messages to your customers, such as special offers, free shipping codes or anything else you want to market to them. Do not under estimate the value a delivery note can bring to your business!

To learn how to customize your delivery note view this video. 

Note: Our delivery notes never include prices

If you do not own a website we recommend you look at one of our free web-stores. We have put together a free tutorial that guides you through easy to follow steps to set up your own store. By owning your own store you have something to market to your customers on your delivery notes. Your web-store will generated additional sales and profits for your business.

Important Note on Shipping Time for Ebay and Amazon Sellers

We ship via USPS International. All orders are dispatched via airmail from Hong Kong Post Office. Total shipping time from the date we receive an order and cleared funds is 8 to 12 business days. That is 2 days for order processing and manufacturing and 6 to 10 business days shipping time. Although many deliveries arrive at their destination in less than a week, the vagaries of international shipping dictate that some shipments arrive a day or two late. With this in mind we recommend that when you list items on Ebay and Amazon that you state a shipping time of 12 to 15 business days. Doing so will avoid a ton of emails from buyers and reduce the risk of negative feedback.

How to get started

We offer a free 30 day trial on all of our services. This is sufficient time for anyone that puts in the effort to make a profit before we ask them for any fees. Our standard reseller program fees are $19.95 per month after the free 30 day trial.

To get started or learn more click here