Drop Ship Business Models Made Possible by an Electronic Payment Processing credit card machine
An electronic payment processing credit card machine opens up a number of business opportunities. When your business is limited to cash or check as payment tender methods, you must maintain a store front and do business directly with customers. This involves many incidental expenses. You pay top dollar for good retail spaces, and employee costs are higher. Because you must maintain the same staff that you would for a warehouse, and in addition, you must have sales staff as well. Marketing expenses are also higher, since direct local marketing often includes print media, television and radio. The expenses for these types of marketing are very high.
When you work using a business model that avoids these expenses, you overhead can be very trim. The only expenses to get started are often, shipping and web design. You can open on online business in minutes, and start turning a profit immediately. Online sales are direct, and cut out a large portion of customer interaction. In some cases, drop ship businesses do not even need to maintain a stock to stay in business. Drop shipping allows online merchants to be a middle man with no direct contact with the product. Many wholesale operations offer this as an option. The shipping costs are higher with this business model, so the margins are lower per sale, but there are virtually no expenses. Because the only thing your business does is enable sales.
Drop shipping is the process where a retailer orders an item from a wholesaler and has it shipped directly to the customer. The product never goes to the business operator. This enables some businesses to operate out of a one room office that can be set up from home. By keeping operating costs very low, the business owner is able to keep pricing competitive. Since operational expenses are minimal, the lower margins are not as much of a concern. Every dollar of profit goes directly to the business owner. These models only work with the addition of an electronic payment processing credit card machine. A processing credit card machine allows businesses to offer remote transactions to consumers. When a business operates solely online, they need to be able to offer convenient payment methods for a fast turn around on shipping. An electronic payment processing credit card machine allows consumers to pay immediately so there is no extended wait time on shipping.
By creating a system where you have no stock, no storefront and no overhead, you enable stress free sales. Because there is no debt accrued, you don’t have to struggle to make monthly loan payments or payoff vendors. Positive cash flow is guaranteed due to the way the business is structured. An electronic payment processing credit card machine allows you to process payments instantly and arrange shipping same day. This means that orders come in and are processed in a matter of minutes. The only thing you have to do is reconcile accounts and collect your profits at the end of every month.
