Basically, you have an online store with no product risk at all. When you receive a retail order from your customer, you pay the product supplier the dropship price (lower than retail price), who then ships the product directly to your customer under your business name.
Why Is Drop Shipping the Best Solution for Online Retailers
- Increase Cash Flow by not Having Any Inventory
Many business owners know that the biggest amount of money is put in the inventory. This is also the biggest risk. If the product can be sold quickly, your cash is tied up in the inventory. With drop shipping you don’t need to worry anymore about cash flow.
You pay for the product to the supplier only after you have received an order from your customer. If the product doesn’t sell, you just remove it from your shopping cart. You can save your money for growing your business
- Improve Customer Service by Saving Time on Inventory Control
With drop shipping you don’t need to shipping, packaging and labeling anymore. No need pay thousands of dollars for a warehouse and no hassle with moving large inventory. Your supplier will ship the product from the warehouse directly to your customer with your invoice inside the package and your business name.
- Increase Store Sales by Offering more Hot Selling Products
With drop shipping you can offer a larger variety of products without any commitments. You can test the market and the product demand without putting a penny on the inventory. If a product doesn't sell, simply stop offering it and try something else until you have found the hot selling products.
- Increase Profits by Finding New Customers
With drop shipping the shipping, storage and inventory management is done by your supplier, so you save more time and money. Now you can focus on marketing and sales to get more customers and retaining the existing ones. More customers means more profits.
