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How to Research Products Effectively

by Lily O'Halloran


Drop shipping becomes very lucrative when you implement three simple strategies. Each strategy focuses on saving you money and time, while increasing your profit margin. These three easy steps will enable you to maximize your profits and provide customer satisfaction. The three simple strategies to implement are: select the best drop shipper available, research potential products, and choose products that will maximize your profits. The next sections will delve into each strategy to reveal how they can work for you.


Choose Best Drop Shipper

Choosing the best available drop shipper is crucial to the well being of your business, because the drop shipper is responsible for shipping the products to your customers. Anytime a drop shipper is used, you lose a small portion of control in your sales. However, selecting the best drop shipper makes up for this loss of control with tremendous profits.

How do you determine which drop shipper is the best? Look for a drop shipper that offers a large percentage of in-stock merchandise. The products must be available, so that they can be shipped to customers on demand. If products become unavailable frequently, then you may not be able to fulfill your customer’s order. The drop shipper must provide quick shipping. Fast shipping provides customer satisfaction, and decreases your customer service costs.


Research Potential Products

You can determine which products will potentially be profitable by completing a little research. A good place to begin your research is the exportable data file, which is usually supplied by the drop shipper. Use the data file to import the product information into a spreadsheet. Sort product information by profit margin; to determine the profit margin, compare the manufacturer suggested retail price (MSRP) with the cost of the product. Now you can determine which profitable products are the easiest to sell.

Search Amazon.com, eBay.com, or other well-known web sites to determine current selling prices. Use the completed auction filter to check the ending prices of eBay auctions, because most auction prices rise quickly at the end of an auction. The ending price will give you the true selling price. Compare your cost of a product to the price of items sold on these web sites. This will give you an idea of the potential for profitability of the product.

You should also search comparison shopping price web sites to determine the going price of a product. A few popular comparison web sites are: PriceGrabber.com, Shopzilla.com, Shopping.com, and Google Products. Many of these web sites have a current hot product list available. Compare your cost to the price of these products to find profitable products.


Maximize Your Profits

It can be difficult to find drop ship products with a high percentage profit margin, but that is fine. What you really want to find to maximize your profits are products that provide high dollar profit margins. For example, if you sold a $10 item and made a profit of 100%, you would only make $10 profit from that sale. On the other hand, if you sold a $200 product and made a profit of 35%, you would make a $70 profit! Therefore, the profit margin percentage is not nearly important as the actual dollar profit margin. Selling high price products is not any more difficult than selling low price products. Choose products that will potentially bring in high dollar profits to maximize your earnings.


One Last Note

The more you research, the easier this process will become. There may be times that a product will flop, but don’t give up. By following these three simple strategies, you can potentially make huge profits. Each time you research a product, your research skills improve. The research gets easier, and you find your information more quickly. Don’t delay, start right away. Implement the three easy strategies listed above to boost your profits today.



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