Dropshipping - How to Avoid Being Scammed

Dropshipping - How to Avoid Being Scammed

If you do a search for the keyword "dropshipping company" in any of the major search engines today, chances are you'll come across complaints or articles that discuss getting scammed when merchants sign up for free drop shipping companies.

While there are some bad elements that leave a negative reputation for the industry, it is more the exception than the rule. Dropshipping has provided a good venue for merchants to quickly get their online store up and running with inventory that is ready to sell from Day 1. On top of that, drop shipping streamlines the online retail process thereby saving merchants thousands of dollars in overhead and operational cost.

First off, let's understand the concept behind dropshipping. It is simply another version of supply chain management that online retailers can use. All the retailer needs to do is to find work with free drop shipping companies to be able to access product inventory for listing in their own site. Once an agreement has been reached with the supplier, the merchant can use an API or an XML feed or even manually upload the products he or she wants to sell into the free website template he is using for his online store. Do note that these products are not physically on-hand, everything happens in the virtual world. So, once a buyer takes interest in the product, the retailer should process the sale as usual - including collection of payment. Then, the retailer places the order with the dropshipper, who will send the order directly to the end-customer.

It's simple and efficient. All a retailer needs to do now is to avoid being scammed by a supplier pretending to be a dropshipper when they are merely 3rd party resellers as well.

With that, it is important to note that a true dropshipping company will not charge you to sell its products. Free dropshipping companies are everywhere, you just need to know where to find them. To make things easier, you can join a network of dropshippers. That is a different case as the networks may charge you membership fees, but it is worth it given the access you'll have to true dropshipped products.

Two, it is also important to take note of the selling price. It would be best then to look for free wholesale dropshippers as they can offer you good profit margins. Those companies pretending to be dropshippers but are out to scam you usually price their goods higher than wholesale. Meaning there wouldn't be much profit for you and you would have a difficult time turning the item around as you will be force to price it over market value given your acquisition cost.

Last but not the least, do your work. As with any supplier you work with, it is important to do a background check. Find out who they are, what others say about them, if they can be certified by a third-party. All that is easy nowadays given the advances of search in the internet. A simple 5-minute check about the company could save you a lot of pain in the future.

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