Reason #18: Drop Ship Internet Businesses Offer Good Profit Margins
When you are researching and looking to become an internet business owner it is important to research industries and the margins within those product industries. Margins are very important as that will dictate your profits. When researching vendors you may see margins as low as 15% and as high as 65%. The range can also depend upon the industry, the type of product, whether the vendor is a wholesaler or drop shipper. Each vendor is different and it is very crucial to understand not only what discount you will receive, but also their pricing policy.
Normally with drop ship vendors they will price their products at the manufacturer's suggested retail price (MSRP). This term means they are requesting you, the retailer, list a product at this particular price or use the recommended retail price (RRP) on your website. The intention here is to help to standardise prices among other retailers. You may also work with vendors who use the MAP pricing method. Minimum advertised price or MAP is the practice of a manufacturer providing marketing funds to a retailer contingent on the retailer advertising an end customer price at or above a specified level. Minimum advertised pricing (MAP) policies are particularly critical to manufacturers who sell their products for online resale, given the ease at which consumers can now conduct online and mobile price comparisons. MAP policies are also established to help small businesses compete and sell on service and value, rather than entering into a price war with cost-cutting big box stores.
When you choose to work with Pure-Ecommerce your new internet business will come with the initial drop ship vendor relationships setup for you. The drop ship vendors we use at Pure-Ecommerce have margins ranging from 30-50%. We strive to start our clients off with a great range of margins and then teach them how to research, contact and find additional vendors as they grow their business.
Watch this video from Jennifer Varner, CEO of Pure-Ecommerce, as she explains the profit margin criteria and standards we establish for the websites we create. To find out more about the drop ship internet businesses for sale, please visit us at www.Pure-Ecommerce.com. Be sure to visit our Common Questions page and Video Library to find the answers to additional questions you may have!