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With the economy fluctuations, many Americans are facing the threat of unemployment of are looking for options to supplement their incomes with additional work from home based businesses. With very little experience in online marketing and web development skills, many Americans are turning to drop shipping companies to assist them in building a home based business from the ground up.

With a minimal investment in start-up costs, home based entrepreneurs are giving companies like 3XP Web Solutions the opportunity to help them turn a profit and earn extra money in these uncertain times. These drop shipping companies provide their clients with state of the art website design and instruction for building an internet business at home without the need of a brick and mortar storefront or the additional expenses of running a business and storing inventory. As a drop shipper, these companies provide all of the online tools and training a home based business person will need to start their entrepreneurial venture including coaching support and search engine submission for unique web address listings.

With simple ease of use access to the drop shipping web site the small business investor can track inventory and update the inventory that they are carrying at the touch of a button. The ability to choose what products to sell is a key component of successful online retail affiliates. The smaller less expensive products do not have much margin for profits but they can be sold in large quantities to multiple consumers whereas big ticket items like electronics are specific to a select group of consumers so sales may be limited, but the profit returns are larger.

Finding the right mix of products can be a difficult predicament so some drop ship companies suggest that their clients stay in a specific niche and offer only 100 or so products through their affiliate websites to lessen confusion for online targeted consumers. The ease of the shopper’s online inventory browsing and making purchases through a drop shipping company’s website is helping many Americans to start home based businesses with confidence.

The ability of the sites to process credit card information online makes ownership of a small business easier and even more appealing to adventurous homemakers that are seeking ways to expand their household income. The real proof of any business is the results that they gain back from their small business investment. With a quality drop shipping company providing the training, coaching, inventory and professional easy to use web sites for home based business entrepreneurs; the economic future of many Americans is looking up.

3XP Web Solutions (http://www.3xpweb.com) is an e-commerce business site that helps people set up and run their own 3xp web solutions business with drop shipping services of over a million product offerings from 3xp websolutions. Art Gib is a freelance writer.

As the world wide recession continues, many online retailers are looking at their operations to figure out how to save money and enhance revenue. One of the less frequently looked at areas is the channel from your supplier to you or to your customer, in the case of drop shipping.

Many retailers are asking suppliers for materials handling help doing a better job managing inventory and information.

Supply problems can create both headaches and revenue loss for the online retailer. The more time you have to spend straightening out orders that have been incorrectly filled, chasing back orders and sorting through billing problems, the less time you have for attending to the business of selling the product.

One of the ways that suppliers to online retailers are beginning to help is by developing electronic data processing capabilities that can track orders; assess inventory, monitor order fill, shipment and billing. This type of system is capable of producing an extremely valuable tool, the ASN or advanced shipping notice.

The ASN is an electronic packing list that can be used to list the contents of a shipment of goods as well as additional information relating to the shipment, such as order information, product description, physical characteristics, type of packaging, marking, carrier information, and configuration of goods within the transportation equipment. The ASN enables the sender to describe the contents and configuration of a shipment in various levels of detail and provides an ordered flexibility to convey information.

The ASN contains essentially the same information as the bill of lading; its great value lies in the fact that it is received ahead of shipping so that the order can be reviewed for accuracy and corrections made before shipping occurs. The ASN saves logistical time and expenses. However, the ASN is only as useful as its accuracy.

If the ASN accurately describes the order you submitted, but the person who packed the shipment has failed to include the correct items in the shipment, there is still a logistical headache to contend with once the items are received. And, to the extent that you are using just-in-time (JIT) shipping to keep your inventories low, the problem can become a customer relations issue as well.

This situation is leading online retailers to do things. First, they are looking for suppliers who offer the best automated systems for ordering, packing and shipping. Second, where possible, they are negotiating penalties for inaccurate ASNs.

This strategy may not be possible in every case, especially if you are a low volume retailer at this point. If you do not feel that you can negotiate a penalty, then at least speak with the supplier about how they can help you make up the cost of dealing with their fulfillment mistakes and see if they will offer an assurance backed up with some type of ‘put your money where your mouth is’ program.

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In the past you are likely to have purchased goods by mail order or on deferred delivery. This is when a retailer shows you their product range on a catalogue or in their showroom, accepts your order, takes your payment, and then delivers the order after xx days/weeks:

1. The retailer holds enough stock to showcase it (sometimes only the pictures of the stock if selling through catalogue only), and then;

2. Asks the manufacturer / distributor to (manufacture if necessary and) dispatch the order to the buyer as soon as possible.

You may feel more comfortable if we called this method of retailing dropshipping; dropshipping is just a new word, the concept has existed for a long time and remains more or less the same today.

This form of distribution was started in the USA, and was conceived much earlier than the Web. The idea was to allow retailers to trade with wholesalers and manufacturers located in far away states. A retailer would first sell the item and then pass the order(s) to the distributor to be shipped; goods could then be delivered directly to the buyer, only when required, and only once already sold. This setup was initially popular with bulky items and, as catalogue shopping grew in popularity, it was extended to smaller items.

With the advent of the Internet, some retailers realised they could use the web as a global mail order catalogue to exploit its far reaching powers and cost effectiveness. Retailers like Amazon started precisely this way, by using dropshipping. By using products which do not need face to face inspection by the buyer (in the case of Amazon, books), Amazon exploited the power of the Internet to become its biggest retailer.

Since then, many more businesses have started selling online; simultaneously the number of buyers has increased tenfold. However, while transactions are now being completed through a new channel, the fundamental rules of retailing have not changed. On the web every level of the supply chain is still duly represented, from the high end retailer, to the main stream retailer, to the retailer and market trader selling on eBay, to the manufacturers and wholesalers coming online in increasing numbers.

Yes the Internet has shortened the supply chain by removing many middle men, and you will experience more competition at each level as a result. However it has also substantially decreased promotional and administrative costs. If you are serious, and you select your position carefully, you can make bucket loads and more.

Therefore, if you are planning to start trading online, the first question you should ask is “At which level of the supply chain do I want to position my business?”, which is the same question you would ask if you were planning to start trading offline.

- Do you want to fight to the cent and penny on eBay for mainstream products that sell fast (if you have the right price)? If so, do you have the financial strength to meet the minimum order requirements of the big distributors offering mainstream products at competitive prices?

- Do you prefer to buy surplus and liquidation to obtain cheaper wholesale prices? If so, can you handle the variation in the type of stocks that become available, and in some cases sifting through ungraded stocks to ensure sellability?

- Or would you rather create your own product idea and manufacture it, to distinguish yourself in the marketplace with a unique proposition and a strong marketing effort to allow your idea to pick up? If so, do you have the investment required to manufacture your own product line?

The budget required for this option may be lower than you think; if you develop a mainstream product, but with the specifications sought by the market at the time of selling, you can make some seriously high profits. You would then keep on renewing your product offerings by listening to the market demand and by developing new and unique products (the minimum order requirements of manufacturers are not as high as you may fear, even for custom products).

- If you want to use dropshipping instead, do you have access to a wide range of verified dropshippers that offer a broad range of products and that allow you to vary your offerings regularly? Are you choosing products suitable to the level of competition in your market? If you want manufacturers and wholesalers to dropship for you, can you guarantee them the volume they require to setup such an arrangement?

Manufacturers and large distributors can dropship for you, but they need you to prove to them you can generate volume, and that managing your dropship account will have a good return for the manufacturer / distributor as well. If you can guarantee the volume they require, how can you prove it to them in advance?

- Would you rather distinguish yourself as a trendy upmarket supplier, with your own website and a well thought out marketing plan? Is dropshipping suitable in this case (a good example of a market where dropshipping could work well is custom-made expensive furniture delivered directly from the manufacturer)? Do you need a showroom to maximise sales? (by the way, did you know retailers like MFI used to work using dropshipping? Surprising right? Can you undercut them?).

The choice is yours to make. As with any business, if you deal in branded products, the brand will sell itself and do a great deal of the work for you, however you will be competing with many more retailers, therefore price will be a big factor (especially on the Internet, where comparisons are quickly made).

If you develop your own product(s), you must have a strong marketing plan in place (one way to reduce your costs of market research is to know what buyers are searching for on the Internet), and identify the unique selling points (USPs) of each product you distribute. This option offers lower sales volumes but higher margins; statistics show that, for small businesses, the higher margin for unique in-demand products will always outweight volume in the long run.

The options available are only limited by your creativity and your desire to succeed. There are many sectors on the Internet that have not been covered, or that have not been covered as they should. Now is the time to choose your position in the marketplace, plan your business, start unfolding your strategy, and take the bull by its horns.

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