What is Drop Shipping and How Does It Work?
Drop Shipping is a way to sell products to a customer without actually having any products in stock.
When a customer orders a product, the drop shipper ( who we will now call the seller) then purchases that product from a third party, often a wholesaler, who then ships it directly to the customer.
The seller never comes into contact with the product. The customer pays the seller at the time the order is placed.
The great advantage to the seller is that they never need to keep any stock. The seller’s responsibility is to find the customers and order the products for them.
- It is possible to get started with very little cash outlay.
- No need to store products therefore no need for a warehouse.
- No involvement with shipping or dealing with returns.
- No need to manage stock levels
- You can work from home online
- The main disadvantage is that there is a very low profit margin in drop shipping.
- As you have no control over stock, you may find that a product which has been ordered is no longer available, or that the price has changed.
- If you are working with more than one supplier, things can get complicated.
- The ultimate responsibility for the quality and the delivery and customer satisfaction rests with you. If you find the you are dealing with a poor wholesaler, this can lead to difficulties in this area.
Which Wholesalers To Choose
There are a number of wholesalers who will supply to drop shippers. It can be quite difficult to find them, as the ones that appear at the top of searches are the ones which are good at marketing themselves, and can often be unreliable.
The best wholesalers are often very bad at marketing themselves, which is why they need you! You often have to dig deep to find a good one.
Beware of those who try to charge you for marketing their products. most good ones will not.
A Simple Example Of Drop shipping
A while ago I was wondering about how to start in drop shipping.
I found a program which promised to tell me how to do it. There was a charge for this program (not recommended!) but I decided to look at it anyway.
The idea was very simple, and involved two well-known outlets, Amazon and Ebay.
- We were told to search on Ebay for a popular item and see what price was asked.
- Then we looked on Amazon to find the same item, and if the asking price was less than on Ebay by about 10%, then that item was chosen.
- The next step was to list that item on Ebay, increasing the price as much as seemed reasonable.
- If the item sold, it was then ordered from Amazon, ticking the gift option which meant that no receipt would be included, and asking for it to be sent to the customer’s address.
But not exactly ethical, and after commissions had been paid to Ebay and Paypal, a minimal amount of profit for quite a bit of work!
Needless to say, I asked for my money back on that program, and as they had a 30 day guarantee, I got it!
I am certainly not recommending this method, I am just including it as it does illustrate a very simplified version of drop shipping.
If you want to Start in Drop Shipping
or find out about the best ways to make money online then my best advice would be to learn how to go about the whole thing in the right way before you make any other decision.
Check out Wealthy Affiliate University
where it is free to join and you will get what is undoubtedly the very best training in Online Marketing that it is possible to find anywhere.
I do hope that this has been some help to you, and if you have any further questions, comments or opinions I would love to hear them. Please leave them in the box below, and I will get back to you as soon as I can.
Many thanks for dropping by