You plan to start you own business and decide to sell your products online. After doing some market analysis, you decide a range of products to sell. Things just get started, there are many others factors to consider before you can start running your online business. After deciding what products you will sell, you are immediately faced with many challenges:
First: "Where to store my products? I want to sell my products online and operate my business from home. I do not have much storage space for inventory at home, should I need to rent a store or a warehouse for this purpose?"
Second: "Since I do not have a physical retail shop because I operate my business from home, are the suppliers willing to deal with me?"
Third: "Many suppliers and distributors have a minimum order requirement if I want to purchase at wholesales price, it may cost thousands of dollars, but I don't have that much of money, do I need to apply for a loan from bank to purchase them? What if these products not sell well, Will I tie up with debt for the money I owe to bank? Why should I tie it up in inventory?"
Fourth: "I will have to upgrade or install security system at my home as I keep my inventory here. And I may budget out my money to buy extra insurance to cover for my inventory to avoid heavy losses which may due by theft, fire, flood or twister".
Fifth: "Shipping cost is another thing to worry. I need to pay the shipping cost for buy my products and I may need to pay to delivery goods out to my customers if I want to offer free delivery service to customers."
Six: "How much do I need to spend in packaging and fulfilling orders? Will I need to hire employee to do the packaging job?"
Wow! There are so many things to take care before I can start my online business. Is there a shortcut for these? The answer is "Yes". These problems can be reduced or eliminated by drop shipping.
Drop shipping is a method that enabled you to sell your products without the need of stocking your inventory, your drop-ship partners will take care of packaging, shipping and handling of your orders and they will directly delivery the orders to your customers.
First of all, you need to open a reseller account your selected distributor which can provide you with drop-shipping service, the distributor will become your drop-ship partner. Normally, some fee involve in reseller account set up. Once your reseller account has been set up, you can start your online business right away.
When you make a sale, your customer will pay you at your selling price plus shipping charge, you will route your order to your drop-ship partner and make arrangements to pay for the order at your wholesale price plus shipping charge. Your drop-ship partner then ships the product to your customer with your invoice and shipping label.
There are many advantages of using drop-shipping partners in your online business:
- You eliminate the high costs of holding inventory at your place
- You don't get stuck with goods that don't sell
- You don't need to pay for other expenses associated with maintaining inventory.
- You not need to worry about packing, handling and shipping to fulfilling your customer's order; your drop-ship partner will take care of it.
In Summary
The real advantage to drop-shipping arrangement lies in keeping your costs variable. Instead of being stuck with these expenses up front, whether you sell or not, you pay only when you make a sale. With drop-shipping arrangement, you can set up your online business fast and easy.
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