Sell Other People's Products
Even when you have a related line of several of your own products/services, you can still supplement your profits by selling products of others. The major benefits of selling other people's products are that you can build a related line of offers faster, easier, and with less risk.
While the profit on other people's products is usually less than you get with your own, it's profit nonetheless, which you won't get if you don't offer related items. Your own products should therefore be given greater prominence in your marketing, but you can still take advantage of related products of others to expand your line and complement your own offers, thus bringing you additional profit.
Two variations of selling products of others are:
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Having them drop shipped.
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Investing in inventory.
Drop Shipping Versus Carrying Inventory
Drop shipping, as you may know, is a unique marketing method, which lets you expand your line rapidly, with no inventory investment. Since the customer pays for the products in advance, little cash outlay is required. It's also a simple, low-risk way to test the sales potential of a product. Testing a drop shipped product can be as simple and inexpensive as making space available in your catalogue, and seeing how well it does.
How does drop shipping work? The dealer obtains prepaid orders for products through advertising, free publicity or other promotional methods (such as a catalogue), and then sends the orders (including payment, and usually a shipping label showing the dealer as the sender) to the drop shipper that stocks inventory. The drop shipper, in turn, drop ships the products directly from his inventory to the customers of the dealer. The difference between the full price and the dealer's discount price (usually around 40-
50% off retail) minus any other charges such as shipping, is the dealer's profit.
Buying other people's products in quantity to stock as inventory will generally give you greater discounts than drop shipping them in single units - and thus greater profits - but there are some risks involved in inventory investment worth taking note of.
Inventory costs money . . . not only for the inventory itself, but it can also cost you to ship, store, maintain, protect, and insure it. There is also the risk of stocking too little inventory. If you receive more orders than you can fill within a reasonable period of time, this will result in disappointing your customers and perhaps losing them, as well as loss of profits due to refunds if the delay is too long.
There is also the risk of buying too much inventory. If something doesn't sell as well as expected, or becomes outdated, you may be forced to cut the price, or sell it at a loss to recover some of your investment. Inventory investment also ties up precious capital that may be better used on other aspects of the business, such as marketing.
On the plus side, by carrying inventory, you can ship faster and include bounce-back offers (package stuffers) to promote repeat sales.
When you decide to invest in inventory, do so cautiously.
It's usually better to buy too few units of a product, than too many. You'll be better able to estimate how much inventory of a given product to invest in after you gain experience, based on it's past sales record.
Persist at building your product line, both with your own products/services, as well as products of others.
Continually expand on your successes, and revise or drop what doesn't work for you. As your catalogue grows and improves, your profits will increase accordingly.
Considering all the benefits catalogues can bring to a business, it's no wonder that Lawson Traphagen Hill (founder of two multi-million dollar catalogue companies) wrote: "...almost all successful mail order businesses, sooner or later, end up with a catalogue." Since a catalogue is such a powerful profit tool, not only in mail order, but in a wide variety of other businesses, wouldn't it be smart to consider developing one, if you haven't already, and if you have one, make sure you're using it profitably?
