Why Dropshipping Works

Business owners who aren’t familiar with drop shipping are missing out big time. Basically, this is a supply chain management technique that allows retailers to focus on more important aspects of their business.

If you’re thinking about building an online store an selling products online but don’t have the capital to start big, then consider this your best option.  First off, you don’t have to purchase any inventory upfront.  This also means saving a huge amount on the cost of storage. Second, it removes the hassles of shipping and handling from your end.

Dropshipping entails selling goods on behalf of a supplier. All the backend work involved in order fulfillment are handled by the said dropship supplier – this includes filling the order and shipping it out to the customer.

The trick to making money via a dropship business is finding a supplier with good pricing. Remember, dropship suppliers are not necessarily wholesalers. While there are those that offer items in bulk, some dropshippers are willing to supply to sellers looking for only a small amount of items.  You can make profit off the dropshipped items with the difference between the supplier’s price and yours – this is called the profit margin.

Essentially, dropshipping is a good way to enter the retail business because it removes overhead cost while still offering you profit.  Here’s a tip: choose items that are popular among young, internet savvy buyers. Plus points if the product is difficult to find in local stores. 

One of the most successful dropship items last year was the Nintendo WII.  Stocks were depleted in most local stores and the market – the younger audience – had no qualms about making purchases online. This combination made the Nintendo WII a huge seller in the dropship world.

So, whether you’re starting your own online store or using popular sales channels like eBay or Multiply, dropshipping can work for you.

Comments

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[FDEmily]

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[Fargham]

interesting idea!

[Leah]

Yes, drosphipping is a godsend for people who don't have the capital or experience to carry an inventory. However, it's not fool-proof. Dropshipping often has a slimmer profit margin than purchasing wholesale, so it's important not to enter a saturated market where the profit margins are already extremely small (electronics, for instance). Also, most big brand-names do not dropship (Apple, Prada, etc.), so don't expect to be able to dropship any product you please. Your best bet is to enter a niche market. By selling a very specialized product you can compete with mega-retailers who don't have an extensive selection of niche products. Finally, don't be fooled by so-called dropshippers who offer thousands of different products for some kind of fee. Those companies are scams - they are middlemen who do not offer their products at wholesale prices, so you won't actually be able to make a profit (plus the fact that every Tom Dick and Harry who signed up with them is selling the same products as you). You need to buy direct from a manufacturer or distributor. To find real, legitimate dropshippers try www.wholesalematch.com. Unlike most databases, they actually offer a 100% money-back guarantee on finding you a profitable dropshipper or wholesaler for your product.

[Make money on ebay]

Drop shipping definitely works and is one of the best methods for starting an online business. I agree that the only to start is when you have a reliable drop ship supplier.

[Just a Lonely Voice]

Take note: make sure to investigate your supplier before choosing them as your drop ship company. There are too many scams and too many companies who are just out to make a quick buck and then disappear. Angry customer reviews are your #1 sign to stay away from a company!

"Buyer Beware" also means you (the dropshipper).