Dropshipping is one of the newest ways to do business online. It involves taking orders from your own website or auction websites like eBay or Craigslist, among others. You take the order and pass it on to your wholesalers or dropshippers.
Dropshippers are companies that store merchandise and take care of the physical shipment for you. It sounds a bit overwhelming, but here is a brief synopsis of how this is easily done.
Sign up with any of a number of wholesale dropshippers. There may be a membership fee involved. This fee may be a monthly or “per sale” membership charge. This membership entitles you to access your entire inventory. Wholesale dropshippers offer you this inventory at wholesale prices. They also tell you the item’s details, what the manufacturer’s suggested retail price (MSRP) is for that item, and what the freight will be. That way, you’ll know the total cost of the items you’re selling, including freight.
The goal is to create the highest profit margin possible. Typically, if you can offer it below MSRP, buyers will generally buy it. If you’re smart, you can include freight in the sales price and offer free freight to your customers for an additional point of sale. To compare prices, Google the product you want to sell to make sure it’s competitive while still making a profit.
Now, take an order and collect the buyer’s payment and shipping information. All you need to do is go to your drop shipping wholesalers and place the order with them. When they ask for the shipping address, have them send it directly to the buyer on your behalf. You keep the difference between the wholesale price of dropshippers and the price marked for your buyer. Simple and direct.
Using dropship wholesalers gives you the opportunity to offer new items in factory packaging. In most cases, the manufacturer’s warranty is in effect, but that is up to the buyer to register the purchase with the manufacturer. You don’t have to worry about returns or defective items. However, the customer can come to you as the place of purchase if something goes wrong with the product.
Many dropship wholesalers will have a service that interfaces with major auction sites, so you can open an entire store and NEVER physically handle any inventory or deal with shipping materials. All it does is offer the material for purchase, take the payment, and process the order through the dropshippers.
The word “dropshipping” is a compound of two words: drop and shipping. The meaning is that you process the order and “deliver” the shipment to a third party; your dropshippers. If you do this correctly and offer the
articles right, you can make a substantial amount of money, especially in custom niches.
Finding a wholesale dropshipper is as easy as doing a web search, although this does take some time. The best way is to sign up with a directory of tried and tested dropshippers. This is much faster and gets you going.
your way to profit. Two services I have used are Worldwidebrands and SaleHoo.