Like with most businesses, profit margins vary when it comes to drop shipping. It will depend on the company, their fees, and the products, and can range from 5% with electronics to 100 percent when it comes to accessories. When it comes to drop shipping versus doing it yourself, you may find that you save a lot of money drop shipping when you factor time into the equation.
First, let’s go over the type of fees that a drop shipper often charges:
Monthly Memberships - Many drop shippers charge a membership fee to allow you access to the products. However, while some legitimate companies have a fee, there are those without the fee too. Let the monthly fee be a potential warning of a possible scam wholesaler before joining - but not the only warning.
Per Order Costs - Most drop shippers charge a fee each time they ship out an order to you, to help them cover the cost of shipping and packaging. This is usually a low fee of fewer than 5 dollars per item.
Monthly Minimum Fee - You may also face a charge if you don’t sell a certain dollar amount of items each month. This is where the monthly fee may come into effect before you’re up and running, but then once you are making regular sales the fee is waived if you’re selling a certain amount.
Restock Fee - Some drop shippers charge you a restocking fee if your customer returns an item. Sometimes they charge this to your customer and sometimes they charge you both a small fee for restocking.
Now, let’s look at the type of expenses and time commitment you may face if you do it yourself:
Storage Fees - You will need a place to house any items that you will sell to your customers. Depending on the size and storage requirements, this can get expensive.
Purchasing Costs - You will have to buy the merchandise first, which can be pricey to stock enough products. Then you might overbuy and have to sell at cost - or worse, be left with inventory that you can’t sell.
Packing Costs - These costs can be expensive and will go up as your business starts selling more. Tape, packaging materials and more will cost you more money than it costs through a drop shipping company due to the volume pricing they get on these supplies. Plus, you’ll need to hire help or do it yourself, which can be very expensive.
Shipping Costs - While you will pass on some of those costs to your customer, you’ll pay more for shipping from the wholesaler to you, and then from you to your customer, which can cut into your profits.
When you add in the cost of your time to do all of these things, you can clearly see that starting a drop shipping business is normally going to be less expensive and suck up less of your time than doing it yourself. Why would you bother doing it yourself when you have so many options?
Spiffy is a must have tool if you are serious about conversion optimization AND you use Infusionsoft. What most people do not understand is that there is a difference between “mobile friendly” and “mobile optimized.” The truth is that Infusionsoft order forms are only “mobile friendly,” so there are many elements that while they show up on the mobile browser, they are hard to click, see, and use. This leads to a poor mobile experience and will hurt your conversions.
In today’s world, there are more and more people using mobile devices for everything. Don’t believe me? Are you using your phone to read this article right now? If you are not, I bet you that your phone is with-in arms reach right now. I would even bet you that your phone is with-in arms reach when you are sleeping!
What Spiffy does is actually pretty cool and Infusionsoft originally instead wasn’t even possible…in fact, a lot of people said that it wasn’t possible. Well, what is it doing? What Spiffy does is uses JQuery client-side scripting to re-render the entire HTML DOM so that it is mobile compliant, giving a seamless end-user experience on both desktop and mobile devices. It’s awesome because you as the user can just WYSIWYG your order form and have it load on any device just as you want it with-out having to do any coding AND having the order page hosted by Infusionsoft so that you are compliant with all the PCI, and other merchant rules that we all have to follow.
I have tested with many different projects and every time, Spiffy has made all the difference in increasing conversions. I use Spiffy for all my order forms and I require all my clients to use it as well.
You can check out Spiffy here: http://gospiffy.com/tag
PlusThis is one of the most trusted and used addons for marketers. We use it extensively where at Think, Automate, Grow. We also have all of our clients implement many of the PlusThis features in their advanced and automated marketing funnels. Founded by two of Infusionsoft’s past executives, PlusThis is guided by innovators in the add-on space. In addition, it is rated as one of the top three Infusionsoft apps on the marketplace with over 99+ five star reviews.
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