We all are in the online business world because we want to make money, work for ourselves, gain additional income, support our families and build passive income.
In most cases people look at 2 models:
Direct product sales...selling items you own or have ìpurchased wholesale to sell retail.
Affiliate sales ...promoting others items for commission
However there is another model that done correctly avoids the risk of spending thousands stockpiling and purchasing stock while seriously increasing profit and commission ...DROP SHIPPING
WHAT IS DROP SHIPPING?
Drop Shipping is in reality a supply chain management technique.
You as the retailer do not keep goods in stock nor do you spend in advance purchasing items wholesale.
As a drop shipper you sell items directly on your website and when a customer orders a product you transfer the order and customers shipment details to your partner manufacturer or another wholesaler who then fulfils and ships the goods directly to your customer.
Drop shipping allows you, legally, to sell products you don’t actually own.
This method is brilliant if you wish to set up your own online store. You can list and sell as many products as you wish for no initial outlay of money.
You control the cost and markup on products meaning a much greater profit margin than affiliate sales. For example if you sell PRODUCT A as an Amazon Affiliate and the cost to the customer is $100 you'll probably get 10% meaning $10. As a dropshipper the wholesaler may list PRODUCT A at $50. You can then sell it for $60 - $100 or more meaning you control the profit margins.
When a customer purchases a product from your store you forward the order to your supplier, minus your profit.
The supplier ships the goods to your customer on behalf of your company.
As with any online models the are advantages and risks. Lets look at some of these
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
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.
John
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?
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
