Drop shipping has many advantages to the Internet supplier, the most important one being that you do not need to stock your inventory, hire employees or make arrangements with other carriers for your shipments. What this does, of course, is free up your cash flow, allowing you to invest your money in building up more business.
Getting established with a reputable drop shipping company allows you to establish an exemplary reputation as a seller of quality, brand name products. Dealing with an experienced, reputable drop shipper will go a long way in affirming that your Company will go the extra mile, offering your customers a service that is fast, efficient and non-cumbersome.
As a "stockless retailer", drop shipping allows you to promote a product, obtain orders and then forward the orders to the distributor. The difference in price from what the wholesaler charges you and your cost to the customer is how you make a profit on your sales.
Your first step should be in establishing a retailer account with your chosen wholesale supplier. You then get to pick and choose from their line the products you want to promote on your Internet site. Just as bricks and mortar department stores mark-up their stock, you, too will sell your product at a retail price. Once the customer buys the product from you (usually with a credit card), you will collect your asking price from the credit card company. Then, you simply email the order with all relative customer information to the supplier who then forwards the product directly to your customer, with your Business name on the return address.
Sounds pretty simple, doesn't it? Done correctly, drop shipping is not only simple, it is also economical and can be a real boon to your business. However, as with any other business undertaking, you must do your homework.
You must be aware that there are hundreds of phoney companies advertising via the Internet who claim to be wholesale drop shipping companies; however, they are simply agents. They do not own warehouses or product and, for a percentage of your profit, they will act as middlemen between you and the actual drop shipper. So, you should always make sure you find a reputable, legitimate drop shipper - one who owns his or her own well stocked warehouse. Once you obtain your retailer's licence, a legitimate warehouse will never charge you a recurring fee for the 'privilege' of placing orders with them.
Bona fide drop shippers are manufacturers or wholesale distributors whose business it is to ship your product on an individual, sequential manner. In addition, they will never ask you to buy inventory up front or require you to pack or ship the product yourself.
Drop shipping offers a myriad of advantages to the small business owner, not the least of them being that there is no need for your Company to maintain facilities for product storage, nor do you have to maintain a shipping and delivery operation on site. Drop shipping is a relatively inexpensive way for you to promote and sell your product while still turning a profit.
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