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What is Dropshipping?

What is Dropshipping?

Dropshipping is a technique of selling items whereby a retailer/seller does not keep actual stock at hand but instead takes orders from customers and transfers them to a supplier who in turn ships the ordered items directly to the customer.

How Are You Paid?

A seller makes money by getting paid the difference between the price you charged the customer and the price the supplier charged you. Some suppliers offer a fixed percentage of items you sell for them. Costly items are bound to bring in more money for the seller.

How To Start A Drop Shipping Business

  • Firstly you need to select a product to sell. Many factors come into play such as availability of the items, cost, etc.
  • Then you need to find a supplier who’s willing to drop-ship items on your behalf and set up an account with them so that the arrangement becomes official.
  • Advertise the items you want to sell online. Make sure that you include the shipping cost when setting a price so that you do not lose any money.
  • Once a customer makes a purchase, you order the item from your supplier and send them the customer details for shipping.
  • Follow up with the customer and supplier to ensure the item is received.

Pros Of Drop Shipping

  • Drop Shipping is advantageous to sellers because they don’t have to keep stock upfront, thereby eliminating the cost of purchasing upfront inventory. The seller also doesn’t have to worry about managing inventory, storage, etc.
  • Another benefit is that you don’t need a lot of money to get started since you don’t have to buy stock up front, so it’s easy to get started.
  • Dropshipping also gives you the flexibility to work from anywhere since you don’t have to man a physical store.

Disadvantages

There are a few drawbacks, however. The amount you make on each sale is usually small therefore you need to build volumes to make a lot of money really; though this can change with a little work and time. There may be problems with inventory as the supplier may run out of inventory to sell to your customers have ordered. This factor may further complicate possible delivery errors and extend turnaround times.

Where Can You Get Items To Sell?

The biggest challenge in Drop Shipping is finding where to get items. Where you get them depends mainly on the type of items you want to sell, location, the cost of the items, and various other factors. Following are some sites which can get you started on your search to find a supplier:

  1. http://www.dropshipsites.com/dropship_suppliers/
  2. http://www.gogodropship.com/
  3. http://www.wholesalecentral.com/Dropshippers.html
  4. http://www.freedropshipperslist.com/
  5. http://www.worldwidebrands.com/
  6. http://www.freedropshippinglist.com/

Where can you sell items?

You can sell items using the following channels:

  • eBay
  • Craigslist
  • Social media such as Facebook
  • A dedicated business website

Drop Shipping can be a tough thing to do. You have to be an excellent marketer to sell items you don’t see, and you have to have great communication skills so that ensure a smooth relationship between you, your customers, and your supplier. But despite the hard work, it can be financially fulfilling if done right.

 

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