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  • How does drop shipping work?

    I would like to get some clarity on how drop shipping works. I think I understand that it is free to drop ship but what if you have more than one order being drop shipped?

  • #2
    “Drop shipping” is an easy way to do business! It means that Smart Living Company stores all of the product inventory you offer your customers, and all you have to do is tell us where to ship the products when your customer orders. We drop-ship their order directly from our warehouse to your customer (you don’t have to store, pack or ship anything!) and put your business name or brand on the return label, so it looks the order is coming directly from you.

    It’s a great program, and Smart Living Company is one of the largest drop-shipping companies in the country, and we’ve been doing it for 60 years! To break it down into simple steps, it looks like this:
    1. You offer your customers products that are stored in our warehouse (through catalogs, direct mail, websites, etc).
    2. When your customer places an order, you charge them retail price plus any applicable shipping and taxes.
    3. You then place the order with Smart Living Company
    4. We package and ship the order directly to your customer from our warehouse with your business name on the label.

    It’s that simple!

    It’s important to understand that when you place the order through Smart Living Company for your customer, there will be tax and shipping charges added. We recommend you charge tax and shipping to your customer so that it doesn’t cut into your profit margin.

    Hope this helps, but if you have any further questions, please call our friendly and helpful Member Services staff at 1-800-345-4762.

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    • #3
      I've been drop shipping for several years. The biggest worry is that thing may be out of stock or discontinued. I check the availability of every item before I list it on ebay, and I still occasionally have to refund and reverse the transaction.

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      • slcAdmin
        slcAdmin commented
        Editing a comment
        Thanks, and yes, it is important to check product availability on a daily basis!

    • #4
      I don't list anything on eBay unless there are over 100 in stock. eBay counts cancelled transactions against the seller now.

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      • #5
        We used to have 3x our cost for retail with SMC and shipping was figured at 1/3 the retail price. Zone 8 was 27% so we charges 9% of the retail. Our profit margin is different now with some items retailing at double our cost and zone 8 is 29% so how can we estimate what to charge for shipping? 1/2 of retail at 15% seems way too high. How do we figure what to charge? Is there a standard, or do we charge a flat rate now?

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        • #6
          I've found that it's more accurate to estimate shipping according to the given percentage for the zone being shipped to. You can always get a quote to verify by adding the item(s) to cart and entering the zip code & state too.

          Any estimated amount under $7.00, just disregard your calculation and charge at least $7.00 which is the minimum + fuel surcharge.

          I've created a sample for zone 8 based on the wholesale price of each product. This should give you a fairly accurate figure but, and especially when the order includes multiple products, double check with the cart quote.

          Estimated Shipping Sample Excel File

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          • #7
            I know how to figure my shipping costs, but how do I calculate what to charge the customer. 1/2 the retail would be too much, I can't pass the whole charges to the customer. If I do an average of zones zone 2 = 17% zone 8 =29% the middle average using a 2x markup would be 12% which still seems high. Whats the best way to figure this?

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            • #8
              What to charge for shipping is the 800 lb. gorilla when it comes to selling via drop-ship. There's no perfect answer & it can drive you nuts trying to get it just right.

              If you're selling via e-commerce, you could implement some type of real-time shipping quote app which many of the carts available include. Or, check out other sites that sell similar items & see what kind of shipping costs they add. You might be surprised to find that 12% really isn't all that high.

              If you're still afraid of appearing to be charging too much, then you could just low-ball it at lower percentage or even offer free shipping over a certain order amount.

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              • #9
                Below is an example of shipping rates by order amount - a method that is common with many popular retailers selling similar products.

                Up to $14.99 $6.99
                $15.00 - $29.99 $7.99
                $30.00 - $44.99 $8.99
                $45.00 - $59.99 $9.99
                $60.00 - $74.99 $10.99
                $75.00 - $89.99 $11.99
                $90.00 - $134.99 $14.99
                $135.00 - $194.99 $17.99
                $195.00 - $249.99 $21.99
                $250.00 and Up Add 10%

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                • #10
                  I've been with SLC since 2003 and I haven't really ever changed my shipping cost to customers. On orders under $20, I charge $6.95. On orders up to $50 shipping is $9.95. Orders $50.01 and up, I offer free shipping. Everything is priced very well so you can run your business however you want.

                  Now if you're trying to sell wholesale, the best way to do shipping is to just calculate the cost by weight because you will need to have a low wholesale price to compete against others selling at the sub-wholesale level and below.

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                  • #11
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                    • #12
                      Great Tool Join and Learn about best eBay drop shipping tool in the market.

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