I am researching drop-shipping as a way to break into an eBay
business to help finance my new company. However, my research was
showing that most of the wholesalers were making the money, not the
sellers. Most sample items I researched were selling for less than
a dollar profit, not even enough to cover the cost of placing the
item on eBay.
Thanks to "How to
Find a Drop-Shipper," I will begin contacting the
manufacturers and putting together some new strategies. I wonder
how many people contact the manufacturers every day with this same
idea?
Anyway, thanks for the time you took to research this for your
readers. I will be visiting your site often.
Richard Allen
Cottonwood, California
Climbing the Ladder
Content Continues Below
I enjoy reading Entrepreneur and save every issue. The
magazine is often filled with great advice. However, I found an
exception in the September 2004 issue.
In "Personal
Finance," Scott Bernard Nelson recommended CD investors
not buy long-term CDs. He recommended against building a CD ladder
if you did not already have one. He is advising people to fall into
a common trap, trying to predict the future and manage return. An
investor who puts his or her money into six-month CDs and rolls it
over every six months will have less money long term than an
investor who puts all of his or her money into five-year CDs. The
reason is that the short-term investor has to make up for the lower
interest rate in future years. However, interest rates rarely rise
fast enough for this to happen.
Smart investors manage risk, not return. A CD ladder is created
to guard against reinvestment risk. A CD investor should always
build a ladder, regardless of the current rate. A CD ladder is set
up by investing 20 percent of your money in each of one-, two-,
three-, four- and five-year CDs. Then each year, when your CDs come
due, you buy five-year CDs. If interest rates fall, only 20 percent
of your money is being invested at lower rates. If interest rates
rise, you get to take advantage of the higher rates. Laddering is
always a smart thing to do.
William D. Barrett
Barrett Web Services
Cocoa Beach, Florida
Scott Bernard Nelson replies: I'd quibble with the
statement that "a CD investor should always build a
ladder." There simply isn't a "one size fits
all" answer to most money management questions-this one
included. On the other hand, I agree that laddering is a smart
strategy, and that it's all about not trying to divine the
direction of interest rates. That's why I suggested that anyone
who has a ladder in place should stick with the plan, regardless of
the skimpy rollover rates available.
The question is what to do if you don't have a ladder but
might consider one in the future. It's a simple observation
that now is not the best of times, with low and rising rates. Going
long, then, locks in paltry interest for years to come. A
legitimate approach would be to stay short for another six to 12
months while deciding on the ladder option, figuring that
longer-term rates are likely to improve by then anyway.
Spin Factor
I read with interest the title of November's issue
("Young
Millionaires"). As I delved into the profiles, the content
struck me as political spin. I related it to the debate regarding
the election: Should every vote count? Or should every
"legal" vote count? There is a difference.
As one who has created several successful ventures, I know there
is a big difference between a company producing a million in
revenue, and the owner being worth a million dollars. With
overhead; salaries; and in many circumstances, high-cost items such
as retail locations, partners and products; just producing a
million in revenue does not magically make the owner a
"millionaire."
The title therefore begs the question, Was it really
"millionaire revenue businesses" or "millionaire
business owners"?
With that said, success to all regardless. A million-dollar
business is an achievement.
Stephen Meade
Chicago
Corrections:
December's "Buyer's
Guide" should have stated that a special DL disc holds up
to 8.5GB of data, up from the 4.7GB of a standard DVD.
The author biography for February's "Tactics"
should have read: "Contact marketing expert Kim T. Gordon,
author of Bringing Home the Business, at www.smallbusinessnow.com."