An SMB Add-On: Drop Shipping

By Christopher Saunders | Posted October 14, 2004
Small businesses interested in getting in on the hot market for eBay drop shipping can now do so thanks to ztradingindustries' new zdrop software.

Drop shipping — delivering an item to a service bureau to have it sold on eBay — has become a major draw for consumers and some small businesses. It lets you list an item for sale without the hassle of registering with eBay, managing an auction, and worrying about payments.

Now, small brick-and-mortar businesses — particularly local packing-and-shipping services — can get a piece of the action by using the zdrop software as the basis for their own drop-shipping business. Once installed, a store employee can use zdrop to evaluate dropped-off items, post and manage eBay listings and handle payment once the item sells.

Zdrop, which can be installed on most merchants' existing POS system, largely automates the entire drop-shipping process. Ideally, a customer drops off an item she wishes to sell on eBay.

The software walks an attending employee through the process of identifying the item (including assigning a value based on the product's age and data entered by the employee), records it by printing a barcode, and then prints a contract for the customer's signature. Zdrop then automatically posts the product for sale on eBay, complete with an item-specific photo from ztradingindustries' product database.

Once the eBay auction concludes, zdrop alerts the employee with a pop-up to prepare the item for shipping. The employee scans the item's bar code to verify it, then zdrop calculates any taxes and generates the necessary shipping labels, buyer feedback, a check for the seller and e-mail alerts for all parties involved.

Through an interface with zdrop's partner, Wells Fargo, the employee disperses checks to eBay, zdrop, the drop shipper, and the involved credit card company if necessary.

Merchants also have the option of offering their customers a Premium auction — a longer, 10-day auction that includes a specified starting bid price above the $1.00 default. Ideally, Premium fees are credited toward the merchant's commission if the item sells.

According to ztradingindustries, zdrop can help small firms reduce their cost for running a drop shipping business from $23 per item to less than a dollar.

"This allows any brick-and-mortar location to enter the segment," says Ron Rowan, ztradingindustries' chief operating officer. "This increases their revenue stream — you can add an additional $10 per transaction, plus wrap-pack-and-ship fees."

Plus, there's little in the way of investment to using zdrop. You don't need new employees or extensive systems to begin a drop shipping practice — which can piggyback on the store's existing business.

"They're leveraging their original customer base and even driving additional customers into the store," Rowan says.

Already, earlier versions of the software have proven their worth in a production environment. SuperPawn, which developed the zdrop software and later spun out ztradingindustries, successfully used the technology as the core of its successful drop shipping business — which has handled more than $300 million in items since 2003, catapulting it to become an eBay Platinum PowerSeller in three months' time.

Adapted from ECommerce-Guide.com, part of internet.com's Small Business Channel.

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