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Guest post by: Gary Granai Become an Author

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Business startups flock to drop shipping services in droves. And in the common rush to start, they set themselves up for failure with an ultimate failure rate reported as high as 98%. Oftentimes their failure can be attributed to picking the wrong drop shipping business category. And that is because they do not understand that there are categories.

There are distinctly different categories of drop shipping businesses. And one has to approach each one somewhat differently to be successful.

Mini Drop Shipping Business -- This is a highly focused, niche business that can be worked either on the Internet or offline. This is perhaps the best choice for someone who is just getting involved in drop shipping. The risks are low and the business is highly rewarding.

Amazon Site – This is not Amazon. It is a site called an Amazon site because it uses Amazon for its drop ship supplier.

Amazon is perhaps the largest drop shipper in the world. There are many Internet millionaires already retired after having set up Amazon type drop shipping sites. They are not difficult to set up and easy to promote. But they do take more startup capital than most beginners are willing to risk.

Catalog Store -- Drop shipping existed long before the Internet. It owes its origin to the paper catalog companies that generally have never maintained their own inventories. They do the marketing, take the orders, and have a fulfillment house or drop ship supplier handle the entire order fulfillment process.

Today the internet allows you to have your own Catalog Store by putting a relatively inexpensive catalog in front of millions of people.

If you are going to sell something like crystal, jewelry, glass, gifts or any other hard good item, you will be looking generally at the Catalog Store category of drop shipping.

Auction House – Selling on an auction site is a popular venture that gets people interested in drop shipping. Savvy internet marketers sell at a loss on eBay to build customer lists.

Your Income Potential

Ebay is a world unto itself. Its main advantage is that it is an instant source of customers. Your profit potential is limited. Ebay makes power sellers. It does not make internet millionaires. But it does build customer lists.

The other three categories are for those who are interested in making a significant income.

Though a mini business may only generate a profit $500 per month, when one sets up a network of them, the numbers can get big. Some web marketers set up three or four new ones a week. They have hundreds on line. They make a LOT of money.

An Amazon site is a cash cow. It looks complex, but in reality, it is a lot of content surrounding products sold by Amazon. The sites are set up using special Amazon site building programs. They take a lot of promotion to get going. But if done correctly, they are millionaire makers.

The Catalog Store offers you the most flexibility. And there are hundreds of offers out there from web site designers and shop cart companies to set one up for you. You can go far astray, fast, in this category.

Drop shippers within the Catalog Store category sell products that they get directly from drop ship suppliers.

The Catalog Store Category is usually what interests most beginners. And all too often they lose money trying to get started.

Only with experience do people learn that they might have made it easier had they looked at an Amazon Site or Mini Businesses.

If you are considering drop shipping, be sure to study each category thoroughly before you commit.

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