Would you like to make higher profits and more control over your business. You don't have your own products and you don't want to manage an inventory. Drop shipping might be your answer.

Mail order businesses have used drop-shipping arrangements successfully for decades. While this method of order fulfillment is not yet well known on the Internet, the potential is excellent.

It works like this.

You set up a drop shipping account with a manufacturer or wholesaler. Next, you generate orders for their products, establishing the retail price yourself. When an order is placed, you forward the sale information to the supplier. The supplier fulfills the order, sending it to the customer with your business name on the label.You remit the wholesale price of the item to the supplier.

The benefits are obvious, you keep no inventory.

Drop shipping arrangements also give you the ability to establish small, low-cost web sites that are targeted to niche markets. These little sites also allow you to test and promote various products. If a product doesn't sell well online, it's an easy matter to remove the web site -- or leave it up, since costs are low.

Consider the following:

You Need a Legal Business Entity
To operate a drop shipping business, you must be a legitimately registered business. In the US, you will need a State Tax ID number. Residents of other countries must determine the requirements in their locale.

Sales Taxes
US residents are responsible for collecting taxes from their own state and from the state of the drop shipper (if applicable). In some states, gross sales must be reported to the state and county for business licenses. Residents of other countries will need to check local requirements for taxation and reporting.

Your Internet Store
You will need a web site, shopping cart software, and a means of processing financial transactions. In most cases, this means having a Merchant Account. Typically, when a customer makes a purchase, you handle the transaction via credit card, then forward the order to the supplier for fulfillment. You, in turn, pay the supplier for the item via credit card transaction. You might arrange payment by individual item or by a net 30 invoice.