Partner Article

Drop shipping: What is it?

Drop shipping is when a retailer passes a customer order to a supplier and does not maintain inventory. This eliminates many start-up costs and allows a business to be run from anywhere with an internet connection. Many successful drop shipping operations cost less than £50 a month to run. Even major retailers operate by drop shipping. In a traditional business, processing three times as much business will entail three times as much effort, but drop shipping outsources most of the work to suppliers. Sales growth will, however, bring additional work in the form of customer service. One disadvantage of drop shipping is that it’s highly competitive due to the ease of getting started.

Many merchants sell items at rock bottom prices. Merchants can skimp on their websites and customer service, but their prices will still be compared to yours. If you’re wondering what to sell online, you can search on the internet. If advertisers are devoting money to a product, people are buying it. Both eBay and Amazon provide facilities to track sales so you can gauge which of your wares is selling best. If you’ve decided which products to sell, you can contact the manufacturer to obtain a list of qualified distributors. There are also directories of wholesalers who are prepared to drop ship ? not all do. It’s best to use more than one supplier. Even the best of shippers makes mistakes, and mediocre ones make many. It’s amateurish to blame a supplier when dealing with a customer. In addition to the number of problems, the ease of remedying them is one factor that determines whether a shipper is good.

The convenience of drop shipping for a retailer is at the expense of the effort of resolving logistical problems: it’s a cost of doing business. It you wish to have examples of a product before you, it’s possible to recoup costs by selling the item as used. Both Amazon and eBay frown upon drop shipping, but many retailers do it nonetheless. One estimate said that 95 percent of eBay home businesses drop ship. In both cases, you need not worry about marketing, which is one of the greatest challenges of launching a drop shipping business and makes these services preferable to operating your own website. If fact, these two companies assist your marketing by providing customer ratings.

Product listings must follow eBay’s or Amazon’s templates, which makes it harder to create a professional-looking page. There could be some repeat customers, but most will probably never use you again ? goodwill is generally not retained and you won’t be creating a business you can sell. Neither company will reimburse you in the case of fraud, so it’s prudent to wait for a payment to clear or to ‘phone the customer before parting with goods. If you ship the product as a gift, your invoice won’t be delivered with the package, concealing the fact that drop shipping has occurred. Both services provide facilities to track your sales, eBay Pulse in the case of eBay and Seller Central in the case of Amazon.

This was posted in Bdaily's Members' News section by Victor Sameau .