Benefits of Drop Shipping
1. Low Investment.
By far the major benefit and attraction of drop shipping is being able to launch and operate your own online store without the need to spend thousands of your hard earned cash by purchasing or stockpiling goods in advance.
In the physical retail world shop owners need to spend large amounts of money before they can consider opening to the public and making sales.
Dropshipping is advantageous as with your online store you do not buy the product until a customer has made a purchase. In reality you are using the customers money to buy the product and have it shipped.
Drop shipping means low start up costs and far reduced risk.
2. Save Your Time and Money.
Think of the benefits of having an online dropship store compared to a physical shop or online retail ship with your own product base..
- A growing majority of people prefer to buy online
- You do not need to find, purchase or rent any physical space saving thousands.
- You don't need warehouse or storage space.
- You do not pack or ship your orders.
- No monitoring or control of stock levels.
- No additional people expenses...packing, delivering, stock control.
You simply list products, sell products, pay your supplier and the supplier does the rest.
Join the Discussion
Nice post, Jason. I especially liked your pointer with the shipping fees, hadn't thought of that yet. The profit margin may be smaller but you also don't have the risk of being stuck with unsellable inventory, so that ay even out a bit.
Is there a special 'lingo' for dropshippers? I can imagine it being so popular that googling 'dropshopping inventory' may not lead to the best results ;-)
Thank you, Wim
Is there a special 'lingo' for dropshippers? I can imagine it being so popular that googling 'dropshopping inventory' may not lead to the best results ;-)
Thank you, Wim
Reply
kapalmquist
Premium
I work in the IT department ("backoffice" enterprise group) of a fairly large electronics component distributor. I am deeply involved with our dropshipping operations. I would agree wholeheartedly with your analysis of the pros and cons. I recently developed an auto-dropship system that creates Vendor POs from Sales Orders. Even with more than one year to deliver, a large budget and several testers I must say that auto-dropship is one big headache. And it wasn't even considered until the volume of dropship orders exceeded 400-500 lines per day. So your advice to stick to manual fulfillment is spot on.
And now that I have become an "expert" and am looking to enhance my pre-retirement income and develop income streams that I can continue after my official retirement, it looks like Dropshipping could be a winner for me.
And now that I have become an "expert" and am looking to enhance my pre-retirement income and develop income streams that I can continue after my official retirement, it looks like Dropshipping could be a winner for me.
NWHiker
Premium
Hi, Thanks for your information on drop shipping. Do you know of any plugins that will calculate a shipping quote for a customer on a site linking into the API from a trucking company, UPS ground or FedEx ground? I saw this capability on a website recently. You could get a UPS ground quote or press another button, fill out a small amount of info and get a LTL truck quote.
John
John
DaisyB
Premium Plus
Hi Jason, Good information.
Questions: When you are checking out the reputations of various drop shippers, how do you find out whether they actually fulfill their ends properly? Is there somewhere to see any comparison charts of the different drop ship companies?
Is this the same thing as if you find a company that sells and ships it's own physical products which you become a (seller) for. For example, I know a company called Regal that produces it's own stuff and looks for people to market it. They will give you your own site or just the ads. You post these on your site with pictures and your link back to the company site where they process the purchase and order. If this is not drop shipping - what is it?
Questions: When you are checking out the reputations of various drop shippers, how do you find out whether they actually fulfill their ends properly? Is there somewhere to see any comparison charts of the different drop ship companies?
Is this the same thing as if you find a company that sells and ships it's own physical products which you become a (seller) for. For example, I know a company called Regal that produces it's own stuff and looks for people to market it. They will give you your own site or just the ads. You post these on your site with pictures and your link back to the company site where they process the purchase and order. If this is not drop shipping - what is it?
JasonGB
Premium
Hi Daisy
The best is to find a drop ship listing company . There are many but you need to verify the quality by reading their reviews and recommendations
Dropshippers basically are the suppliers of products. They will form an agreement with you to sell you their products for a certain price. You then list those products on your website and you decide how much to charge your customers. When someone orders a product they pay you. You then order and pay the dropshipper. So if you sell a product for $25 you may only be paying $15 to the dropshipper
You keep the profit and the dropshipper sends the product to your customer.
What you describe is more affiliation where you promote the goods but the order is actually made on the suppliers website and you gain a commison - like Amazon
Hope this helps
The best is to find a drop ship listing company . There are many but you need to verify the quality by reading their reviews and recommendations
Dropshippers basically are the suppliers of products. They will form an agreement with you to sell you their products for a certain price. You then list those products on your website and you decide how much to charge your customers. When someone orders a product they pay you. You then order and pay the dropshipper. So if you sell a product for $25 you may only be paying $15 to the dropshipper
You keep the profit and the dropshipper sends the product to your customer.
What you describe is more affiliation where you promote the goods but the order is actually made on the suppliers website and you gain a commison - like Amazon
Hope this helps
JamesGoolsby
Premium
Jason, I would love to hear your recommendations for quality drop shipping suppliers. My wife and I tried to make a go of it a few years ago and by the time we factored in all our costs it just wasn't worth it with the companies were were using. In fact, on more than one occasion we actually lost money on the deal. We still shipped, of course, because the customer expected what they bought, but we soon threw in the towel. :-)
JasonGB
Premium
Wow, one very good example of why finding the right suppliers and planning profit margins remain important prior to any agreement. Thank you for sharing this with us. I know there are some pretty unsavory dropship suppliers out there.
OldMCSEGuy
Premium
I've done this in the past. I think this will be one of the features of my new high in store but it won't be 100% drop ship. at this point I am just at the stage of getting my suppliers. but my goal is a little bit bigger. This does require some work and access to some software to avoid things like promising stuff you no longer have in stock. currently we have 21 employees so after this big Christmas rush I think we're going to tackle it.
JasonGB
Premium
Sounds excellent, you're right it does require work but is a great way to get into larger scale retail. Wishing you much success
