What to Look for in a Drop Shipper

Be very cautious about how you find products for you online store or auctions. Be very skeptical of wholesalers or drop shippers that you find through Google searches and especially from the Google ads that are found at the right of web searches. And one of the absolute worst resources I have seen for wholesaler and drop shipper information is being sold on eBay for a few dollars. The information is worthless--made of Google searches that you could have done yourself.

Here is an example (Kate Aspen) of a drop shipper that will drop ship very nice wedding favors. Notice that you need to provide a Tax ID Number to register with them. Asking for a Tax ID is a good sign when looking for legitimate wholesalers and retailers.

Here is a legimate website that publishes good wholesalers and drop shippers.

Escrow.com or Escrovv.com

The difference in the spelling of the two words may seem obvious in this format. But it might not be so obvious in the URL in your web browser or in an e-mail. If you do not pay close attentions you might be enticed to follow a link to Escrovw.com. This and other fraudulent escrow service websites have been taking money from unsuspecting eBay buyers. The only authorized escrow service that eBay endorses is Escrow.com (spelled no other way).

I have done lots of transactions over $1000 on eBay and honestly, I have never used an escrow service. I have used PayPal and everything has worked out well. But I have noticed a disturbing number of postings from buyers and selling who have lost either money or products by using fraudulent escrow services.

I would recommend Firefox 1.5 with Google's Safe Browsing Extension. The extension will warn when you may be on a fake website.

Shipping Matters

I have been using and recommend United States Post Office Priority mail for shipping my smaller eBay packages. My local post office has an automated machine so that I can pay for and print labels without standing in line. I think most people are afraid of using the machine. They don't want to take the few minutes required to learn how to use it. But it beats standing in line.

I have recently been printing my own shipping labels at home. You do this from PayPal or at the Post Office's Click-N-Ship website. I would recommend using a laser printer to print your labels because the ink from a laser printer is waterproof. Most inks from ink jet printers will run or smudge when wet. Use labels where the entire sheet is one big label or sheets with two labels per 8.5 by 11 inch page. A good quality home business laser printer now costs less than $200.

You will also need a scale, but the post office sells two very nice ones for less than $40 on their site. I would recommend a scale that can weight up to 10 pounds. The 5 pound scales will not help with larger packages.

Unfortunately, you can only print Priority mail postage from the Post Office's website and PayPal's shipping center will only ship through UPS and USPS Priority Mail. One nice thing about each of these sites is that you can choose not to display the postage amount on the label. This is important for sellers who choose to offset some of their handling charges in the shipping & handling charges. Charging $19.95 to ship a small eBay item is unethical, but adding a dollar or two to actual shipping to pay for packing materials is certainly fair.

It is not possible to pay for and print shipping labels for USPS first class mail or media mail from either of these sites. You will have to go to a third-party mailing service such as Stamps.com. I really can not recommend these unless you ships more than 20 first class or medial mail packages a month because the third-party online mail providers charge at least $15.99 per month just to use their service. And lastly, whatever you do, do not have The UPS Store package your items for you. They do a good job, but charge way too much for putting your package in a box and adding packing peanuts that you could buy yourself in the same store.

eBusiness Data Mining

Regardless of the business you are in, you will generate data about sales, expenses, and profits. Before Google changed some important AdWords policies, I ran a successful AdWord affiliate program with a company that provides toll free numbers to individuals and businesses.

Google AdWords is a program where you can purchase ads that appear highlighted and to the right of the results from a Google search. I registered with the toll free phone company's affiliate program. Then careful wrote the Google ad text and had the ad up in less than 30 minutes.

Google provides all sorts of statistics about how many clicks you are getting, you cost per click, click through rate, and cost of the ad campaign. I was getting some results, but it was difficult to get quantitative feedback to learn if the ad campaign was successful.

I created a Microsoft Excel spreadsheet and used the results of the AdWords campaign. I was able to keep up with the amount of money I was spending on the ads and track the results of the residual income from the telephone company. It took about six months to get over the hump and become profitable. Because the telephone company gave you a percentage of the incoming calls placed to the toll free numbers registered to you affiliate account, it took a few months to have enough customers to balance my expenses.

It was beautiful. I had balanced ad text, the maximum cost I would pay for an ad, and the income created to generate a 20 to 30 percent return on my ad costs. But all good things......

Since that time, Google has changed its policy regarding the AdWords target URLs. Google is not allowing multiple ad campaigns to use the same target URLs. To successfully run a Google AdWords campaign you must use your own website as the target of the campaign and then link to your affiliate program's website. I am still working on a new formula for success and will post the results in the future.

eBay Radio

I have been enjoying listening to weekly shows from eBay radio over the past couple of months. If you do business on eBay, then you should check it out. Multi-task and listen to it while you are doing other things online or download archived MP3 files to your iPod to listen while away from your computer. The host Jim "Griff" Griffth works for eBay and is the author of the The Official eBay Bible.

eBay "Profits"

Here is a good little store about doing "business" on eBay:

Wife goes to the mall for the day and buys 50 widgets at $10 average($500). Spends 20 hours over the next week taking pictures, making cute graphics and writing descriptions. Lists them all on eBay, sells 40% at $12 average($240). Relists the rest at .99 and sells 40% of them at $8 average($96). Wife calls friend to go for lunch(-$40) to celebrate having grossed $336 on items sold that cost $320. Doesn't occur to her that 15% fees (-$45) have been taken off. Final tally is $500 spent to end up with $251 cash and 18 more dust collecting pieces of junk. Wife tells hubby if she spends $1000 next month she'll do even better. Hubby says, "Yes dear, I'll start going into work on the weekends now too".

The moral of the story. Look at doing business on eBay as a business. Keep track of how much you pay for an item, subtract eBay listing and final value fees, PayPal fees, packing supplies, and postage from the price to find the net profit. Better yet , keep track of all of this in a simple Excel Spreadsheet.

Affiliate Links

You will notice some web links (the actual name is hyper-text links) in my blog. I want to disclose that some are affiliate links and some are just regular links. They are all web links to outside web sites. And with some of the link I may be paid some small compensation if you click on the link and then use the service.

I do not place links on my site to companies with products or services that I do not use or that I would not recommend any friend to use. I think that using affiliate links is a fair way to receive some small compensation for posting useful information on the web.

This blog is not simply a forum for affiliate links, but a way to share my experiences and promote ethical, but profitable online business practices.

eBay Store Closings

Many eBay stores are being closed. Businesses are not abandoning eBay, they are still using the action format. But recent fee changes are finally driving people away from opening stores. I have tried using an eBay store, but like many other closed it in the past few weeks. My main concern in using the store was in the unfriendly search function within eBay. But I feel the store was a valuable way to cross-promote my items for sale between the Thanksgiving and Christmas shopping frenzy.

I will probably open a store again before Thanksgiving this year. Even with the increased fee.

eBay Store Inventory format listing insertion fees will remainunchanged. The Final Value Fee for Store Inventory items will change as follows:

Closing Price Old Price New Price $0.01 - $25 5.25% of the closing value 8% of the closing price

$25.01 - $1,000 5.25% of the initial $25, plus 2.75% of the remaining closing value balance. 8% of the initial $25, plus 5% of the remaining closing value balance ($25.01 - $1000)

Over $1,000 5.25% of the initial $25, plus 2.75% of the next $25.01 - $1000, plus 1.50% of the remaining closing value balance ($1,000.01 - closing value). 8% of the initial $25, plus 5% of the next $25.01 - $1000, plus 3% of the remaining closing value balance ($1,000.01 - closing value).

Google Buys Keyhole

Google has purchased a Mountain View, Calif. company Keyhole. Keyhole has an amazing technology that you have to see to believe.

Keyhole produces a 3D digital model of the entire earth. You can type in any address and 'fly' to it. It is fun to play with. They offer a free 7 day trial on their site.

They also produce enterprise level software for managing very large geographic databases. The company was founded in 2001. They received start-up money from Sony Broadband and are just one of many recent acquisitions by Google. Google is a company to watch. They are much more than just a search engine. And if I were currently purchasing stock, I would buy and hold some Google.

Click here to see some of Google's lesser known products.

Brainy Nation LLC

I took the time yesterday to setup my Limited Liability Company. I decided to just go ahead and setup my business up as an LLC vs a standard sole proprietorship. I used the online legal service company LegalZoom.com. The total cost was $366, which includes the Maryland filing fees and the paperwork for a Federal Tax ID number.

Because I am the sole member of the LLC, I can operate it like a sole proprietorship for tax purposes. I believe that I still need a State Tax ID number and need to check with the state and my county to see if I need to file for any other licenses. I am sure that I will make a mistake or two, but just decided to jump into it.

Anti-Virus Software Is Not Enough

If you only use anti-virus software and you work on a Windows PC, then you are not doing enough to protect yourself. You should also be using Anti-Spyware software. Spyware is unwanted software that is placed on your machine without your permission, and most of the time, without your knowledge.

SpyWare can make your Internet connection slow, spawn pop-up advertisements, reduced your computer's performance, and result in identity theft and the loss of private information. Microsoft has introduced a beta version of their new free AntiSpyware Software.

I consider myself to be a very careful web surfer. I run anti-virus software on my PC, but I ran the AntiSpyware program and found one piece of Spyware on my machine. I plan to regularly run the software and check my PC. It took less than 8 minutes run the first check, and finding a piece of Spyware certainly made it worth the time.

Any website that hijacks your web browser's default homepage is suspect for viruses and Spyware. You have to be very careful when browsing the web with Internet Exploder (uh, I mean Internet Explorer) because it is very suspecitable to being taken over by unscruptilious websites. I would recommend using another browser for surfing the web.

I have been using Firefox 1.0 and am very happy with it. So far, I have not had any problems viewing any pages with it. My Internet banking site even works with it. One of the best features of Firefox is tabbed browsing. Tabbed browsing allows you to view multiple websites in the same window. Ever had five or six Internet Explorer windows opened? In Foxfire I can have Google in a tab, my blog in another tab, Amazon.com in another, an online spell checker in another, along with eBay, PayPal and MapQuest all in other tabs. Check out Firefox and download, here.

Good eCommerce Link

I wanted to share a good eCommerce link. I heard this guy, Chris Malta, on eBay radio. He was talking about sourcing retail products for your eBay store. He has a good (and free) eBook on starting an online business, and he also has a great list of wholesalers and drop shippers on his site, World Wide Brands, Inc.

Chris has been on eBay radio and also hosts a radio show for Entrepreneur Magazine.

I think that the best advice from Chris's free eBook is to get your tax ID number when you are starting a home or Internet based business. Legitimate wholesalers and/or drop shippers will not deal with you unless you have a tad ID number.

Franchise Business -- i Sold It
I have thought some about opening a franchise store. If I were interested in opening a bricks and mortar store, I think it would be a franchise. Because of the great expense of opening a 'real' store, I think being a part of a franchise would supply not only the best opportunity for success, but it would also help in getting a business loan.

I have been hearing radio ads recently in my area for a new store. It is called i Sold It. Their website i-SOLDit.com has information about the business (by the way, I think that i-soldit.com is a terrible website name. I hate dashes in names. Just something to think about when registering domain names. I bet that if you go to find the business online in the future you will forget the dash. I did.).

The basic idea is that a person takes an item of value to one of their stores. I Sold It takes photos of the item, does market research, and lists the item on eBay. Then when the items sells, they pack and ship the package to the winning bidder. The person who brought the item into the store gets a check mailed after the successful transaction.

The fees break down like this:

Commission is 30% of the first $500 and 20% of the remaining amount
(over $500). iSold It charges a $5.00 minimum commission per item.

Then, eBay Fees are:
Listing/Gallery photo fee of $0.60 (assumes $9.99
starting bid) plus 5.25% of the first $25, 2.75% of the next $975, and
1.5% of any amount over $1,000.

And finally, Payment Processing Fee

$.30 plus 2.5% of the final selling price.

They show that for:

$100.00 you get $66.23 or 63% of the final value
$1000.00 you get $695.98 or 70% of the final value
$5000.00 you get $3,735.98 or 75% of the final value.

I think that is a fair fee schedule, especially for someone who does not have a computer, Internet connection, digital camera, and/or the time to list and follow through with an eBay transaction.

I wonder how long it will take for someone to turn this into a home/Internet based business. It is not a bad idea....more to come.
Is anyone earning money as an Amazon Associate?
Is anyone actually earning money as an Amazon Associate? I signed up today because I thought it was cool that this weblog can be linked to the Amazon Associate affiliate program. But I wonder if anyone is actually earning money.

I have seen this program for years. I think it must be one of the first affiliate programs on the web, but I wonder how much people are earning? Probably not much by just passively linking items to a weblog? Anyone with experience? How much are you earning?

eCommerce Ethics

So, maybe I am not cut out for business since I seem to have this ingrain sense of ethics. I see websites all over the place that want to sell unscrupulous methods of "Stomping" search engines and so called opt-in e-mail lists for marketing. I just do not believe in such practices, even if it means turning away profit. Actually, I sense that people selling such information are actually selling junk information. Their sites stink of get rich quick and easy money.

I wonder if it is possible to make an honest living on eBay and with an eCommerce sites...selling products you like and treating people fairly. Can someone make an honest living? It seems that there are some good Power Sellers on eBay. I think that eBay’s feedback system may help to keep it more honest.

Day One

Well, I am just getting started and thought it might be interesting to log my progress. I have been playing around with the idea of a home/internet small business for a few years now. Playing around...but want to get more serious.

I have looking online for too long for business ideas. I have tried a business or two. Basically the most successful idea has been on eBay. Selling household items on eBay has financed holiday spending, paying bills, and everyday spending. I appreciate having money in my Paypal.com account for a cappuccino at Starbucks.

But now it is time to get serious. I have only been imagining, or daydreaming, about a business. And I have tried a couple of businesses--a network marketing and Google Ad Words based affiliate business. Needless to say, I did not make any money. But I didn't loose much either.

Getting serious means filling official State and Federal paperwork, getting a tax ID number and maybe forming an LLC for my business.

I have found some good resources at the Small Business Administration. Because I am a veteran I can contact their Veteran Affairs person and plan to do business as a Veteran Owned Business.

Well, I have my work cut out for me. But I think it will be fun.

[Update 1/11/06: Check out my http://coffeenewsinfo.blogspot.com to see me doing this for my 'real' business.]