Drop shipping is a process where the product distributor does all the shipping transactions
for you.For instance instead of ordering products in bulk, it stays at the distributor such that when you process a sale, the product is packed and sent directly to your customer and the label of your company is emboldened o the delivery box.Drop shipping favors new online sellers as it requires no startup capital and there are minimal risks.There will be the benefit of investing in products that you are sure will sell.It also provides solutions to storage nightmare faced by many online sellers.This ensures great reduction in the storage costs.
TYPES OF DROP SHIPPERS
There are basically two types of dropshipers middlemen dropshippers and master dropshippers. Please find explanation of these dropshippers below.
1.Middlemen Dropshippers: Drop shipping aggregators also referred to as drop shipping warehouse companies are primarily middlemen who carry out aggressive web advertisements on the web emphasizing on their multiple brand name products to be sold online.Majority of them also provide predesigned websites consisting of these items.The companies show a list of items in their virtual warehouse that exist in other real wholesale companies.They therefore do not have any item in the stock but make money from handling or membership fees.The moment you order something from them, they in turn order it from the real wholesalers while marking up the cost and charging you the transaction fee.
2.Master Dropshippers: The second type of drop shippers is drop shipping manufacturers and master distributors.There are multiple manufactures that normally drop ship directly or seek the services of a master distributor.Operating directly with the product manufacturer enables you to get products at a lower and affordable cost.
Its always profitable to deal with master dropshippers as there is no middlemen involved.Its always important for you to know that the person you are dealing with is middlemen or master, as some people try to act as master even though they are middlemen and mislead you.
Importance of Blind Dropshippers
Blind Dropshippers are the ones who dropship on your behalf as if it is coming from you.It is quite important to look for blind dropshippers as they does not reveal your identity and your customers will not be confused and beleive as if its coming from you. They are many major ecommerce sites for eg: Overstock.com, TigerDirect.com, Buy.com to name a few who use blind dropshippers to a large extent and you doesnt even know that somebody else is shipping for them.
Benefits of Dropshipping
Two great benefits of drop shipping is the elimination of positive cash flow and upfront inventory.The positive cash flow results from payment of the seller when the purchase is transacted. The seller normally remits payments to the wholesaler through credit card. This creates some period with customers cash in the hands of the seller before paying the wholesaler.The duplication of transaction is minimized in drop shipping as only a single warehouse will be responsible for picking, packing and shipping the product.It significantly reduces shipping and entire inventory management costs reflected on the customer.