Drop Shipping: The Overview Of Dropshipping
Drop shipping is a business model which allows anyone to set up an e-commerce store
to sell physical products without spending a fortune on inventory, warehousing, market research and shipping.
If you like to learn by doing, then drop shipping is ideal for you.
At one time most business on the Internet was Internet related. Online stores sold software, virtual, and information products while the only physical product on the web for years was books.
Even amazon made a loss at first, but slowly the real world leaked in to the virtual; online shops began to sell real, physical products, and not just any product, not just low priced products.
Luxury stores, though slow to follow the trend, moved onto the web and were surprised to find that customers would spend thousands of dollars on items they had never held or seen.
With no requirement for physical premises or store clerks, online retailers appeared to have very low overheads, but their problems were the same as in a physical store.
Before you can sell something you have to either make or buy it, online stores might appear to be cheap to run, but they were just as expensive to set up since you had to purchase inventory and store it, something which was more of a problem for a business which had no physical location and no stock room.
Enter the drop shipper. Drop shippers are a hybrid between a wholesaler who supplies the items you sell, and an outsourced shipping department. Instead of buying stock and having it shipped to you, you buy stock only when you have sold the item on your website.
When the customer buys from you, you buy from the wholesaler. The customer pays you, you pay the wholesaler. The wholesaler delivers direct to the customer. If all goes well, your involvement is minimal.
The saving in money is enormous, and while there is less profit to be made than when buying inventory in bulk, there is no risk, making this ideal for anyone new to a particular business niche.
Better still, there is no need to learn the complex business (and it can be complex) of shipping - many drop ship suppliers have accounts with the major shipping companies which allow them to charge less than any new store could; in many circumstances drop shipping is an ideal way to start up in business.
So what can go wrong?
Wherever there is a good idea, there is a con man trying to take advantage of it, and drop shipping is no different.
It is a pest to have to supply business details and sign up for an account before you can get shipping and pricing information, but beware any supposed drop shipper who does not ask for proof of your status as a business.
There are many scams in this area, all of which point to the absolute necessity of getting your information about drop ship suppliers from an independent, reliable source.
As long as you do, drop shipping can be the ideal way to start a business online.
by: Kirsty Hale
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