What Is Drop Shipping?

In days gone by every retailer had to deal with the storage of stock

, keeping goods at ideal temperatures, keeping supply levels just right. Each item bought from a wholesaler had to be bought in bulk, and represented a risk. What if it didn't sell? All the money spent on stock would be wasted. When a business moved onto the internet the problem got worse, not better. The business may not need premises or a shop assistant, but stock must be stored somewhere and someone has to pick and pack the items and arrange their shipping to the customer.

But since those early days things have changed. Now internet retailers can forget stock AND shipping and concentrate on their main job; sales. Holding stock, like many other business functions, can be outsourced. The process is called drop shipping.

A drop shipper (or drop ship supplier) is very similar to a wholesaler, but does not sell to you in bulk. A drop shipper will supply goods to you as and when they are purchased from your web site. The customer pays you retail price, you pay a drop ship price to the wholesaler who packs for you and ships direct to the customer. The difference between the amount the customer pays and the amount the drop shipper charges you is your profit. No space consuming inventory, no time consuming packing and shipping, and no capitol required up front. Best of all the process involves little or no risk. If for any reason the item doesn't sell, it doesn't matter. With no money tied up in stock you are free to try again, until you find the product, or combination of products, which is successful for you.

Almost anything can be drop shipped. Perfume, dry goods, bicycles, electronic equipment (although the competition in this area is intense), bed covers, furniture, toys, the list is endless.

If you've just made the move to Internet selling, you may find it difficult to find drop shippers who will work with you; worse still you may be scammed by some who ask for up-front fees. You may even find that the fee your drop shipper charges makes his product more expensive than those customers can buy direct from bulk retailers. It's important to choose both the product and the drop shipper wisely and carefully. If you do, drop shipping is without doubt the most risk free way to start an internet business.

The market is constantly changing. Small companies can use this to their advantage because they can bring on new products and change the way they work far faster than the corporate monsters. By finding a reliable source to keep your online business supplied, you take the first step in creating a money machine designed to provide you with a location independent stream of income.

It's time to get out the laptop and get down by the pool. Using a drop shipper means you can run your business from anywhere. So ask yourself, where will you go?

by: Kirsty Hale

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