Dropshipping is not a new way of doing business even though some traders and merchants still have yet to embrace it. However, let me say, if you are new to trading, whatever it is you are interested in trading, you should take a good look at dropshipping before you move on to other business models.

Dropshipping is a great way to start a business if you have very little money up front. With dropshipping there are no costly overheads like buying stock, expensive warehousing of stock, insuring stock and periodical stock taking.  Let me say, before I discovered dropshipping some years ago, I had boxes and boxes of stock all over my house!

How Dropshipping Works

First you find yourself a supplier who offers a dropship service - and these days that is not a difficult task since many suppliers now offer this service.  Doesn’t matter what you’re looking for, from electronics, to designer wholesale clothing, to sex toys, they are all offering a dropship service.

Once you have your supplier you sign on with them. Choose what you want to sell from their stock and you advertise the item on eBay or your website.

For instance if you find a product that your dropshipper is selling for $50, you might go ahead and sell it yourself for $80. 

Once the item sells, and your customer pays you, you immediately pay your dropshipper the $50 and you keep the $30 as your profit.  You then pass your dropshipper your customer’s name and address and the supplier ships the item to your customer.  Done!  All without you ever seeing or handling the product.

Your customer never knows that you personally didn’t ship or handle the product they receive, they just assume the product has come from you.

When dropshipping works well, it is an amazingly profitable and stress free business model, for you the middleman.

You should beware though, that within this chain, is the scope for fraud, scams and simple dishonesty. If you have a dropshipper who takes your money and doesn’t ship, you are the one who has to refund your buyer.  Equally, if your dropshipper does not ship the item to your customer in a timely manner, then that will cause problems for you when your buyer wants to know where their item is.

Also if you have a dropshipper who deliberately or accidentally leaves their company/contact details inside the product they ship to your customer, your customer could bypass you the next time they order and go straight to your supplier and get the item cheaper. These and more are all issues you need to be aware of!

If you decide to go the dropship route, it is a superb business model. However you need to make sure that your dropshipper is honest and can deliver what he says he can. Because when your customer comes calling, you’re their only port of call and you have to take responsibility for the transaction and not your dropshipper – Find Reliable Dropshipers on Salehoo!

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