Drop shipping is basically the process of buying and selling different products online. Often people think that it requires a complicated infrastructure, but in most cases it’s very simple. It requires a few essential key players and components.

The online reseller has the responsibility of promoting and marketing the products. The interesting part here is that as you are selling products online, so you don’t have products in inventory. In most cases, you will never see or touch the actual product.

Drop shipping Reduces Many Risks, Even During an Economic Downturn

Now the big question here is; how do the products sold online reach your customers? This is where the drop ship supplier comes into play. They provide you with the products and they also have the responsibility of storing your products. Yes, you don’t have the responsibility of storing the products you are selling. You don’t need to worry about maintaining a warehouse and stocking the products. Instead, you can focus on the promotion and marketing of the products.

There are several additional benefits of the drop shipping business model. You can start your business without making a big investment. One great advantage of this business model is that you don’t have to buy the product first hoping to sell it quickly. You only pay the drop shipping supplier, after a buyer has purchased your products and paid you completely. So, you don’t need to worry about whether people will buy your products or not. During bad economic times, retail stores are stuck with inventory.

With drop shipping, you as a reseller don’t need to worry about inventory risk because you don’t have any physical stock on hand. It’s the drop shipping company that stores all the inventory and bears the inventory risk.

The Down Side of the Drop Shipping Model

Not every business model is perfect, including drop shipping. Here are the down sides of drop shipping. If you observe this business model carefully, you will find that the supplier plays a huge role here. This is why it is important to choose a company that will keep its promise on carrying quality products and providing reliable shipping. Most important, they should not upsell your customer. They control the packaging and shipping of the product to your customer. Some drop shipping companies, especially the middleman, will put product promotional materials in the shipped parcel to steal your customers.

Another drawback of drop shipping is that you don’t see the products first hand. You have to place all your trust on your supplier. If you choose an unreliable supplier, you will have unhappy customers and your business will suffer.

The following are a few tips to help you succeed with your drop shipping business. On your website you can offer coupon codes, newsletters, and free shipping on certain items. Seasonal discounts or holiday specials and promotions are always a good idea.
Website security is a must with the infinite number of viruses and spyware on the Internet.

In any type of business, there is always risk. The advantages of drop shipping outweigh the disadvantages of drop shipping. The cost and hassle of inventory storage is eliminated and shipping hassles are minimized. Doing research to find a good drop ship supplier will increase your chance of having a successful business.

Part 8: Ups and downs of drop shipping
This is part 8 of 8.
Thanks for reading!
Share This Drop Ship Article>>
| More

>> Ups and Downs of Drop Shipping