Thursday, July 12, 2007

Sell products without carrying inventory: Why Drop Shipping should be your choice

What is Drop Shipping? If you’ve never heard of the term, Drop Shipping is basically selling products offered by wholesalers directly to the end consumers, while making a nifty profit in between which is usually decided by you. To be more specific, I’ll give the Wikipedia definition of it:

“Drop shipping is a supply chain management technique in which the retailer does not keep goods in stock, but instead transfers customer orders and shipment details to wholesalers, who then ship the goods directly to the customer. The retailers make their profit on the difference between the wholesale and retail price.”

Sounds like a great idea right? But you might be asking yourself how you can start, and how would you sell these, considering you don’t have inventory; its simple really.

Some of these companies may actually offer catalogues (though they may you want you to become a member prior to trusting you with their materials) by which you can show customers different products that you can offer to them. You may find many drop shippers like this that engage in selling antiques, women’s products, household products, collectables, and decoration pieces. This is a nice choice if you have an extensive number of friends and family, especially if you are active in your community since it can open may different prospects for you to form a customer base and develop a network of customers that spreads by word of mouth.

Nowadays, many drop shippers offer services by which you can sell directly through the Internet. Many of these are also geared towards people who wish to sell on eBay, which can prove to be a positive choice considering you won’t have to stock up on inventory and worry about building an excess. In fact if a product doesn’t sell, you won’t even have to worry too much as you didn’t even pay for it in the first place. Plus if you wish to work from home or work from home already, you can’t miss the chance to build some extra income from something that probably wouldn’t take much time out of your day. There is only money to be made in this business, since you have virtually no up-front costs for it (unless the company requires you to be a member).

Given these reasons, it should be a no-brainer for many people why this is an ideal choice for a home based business. But keep in mind that there are many scams out there too. Some of these scams include selling you false drop ship lists that have outdated or fraudulent companies. They may not even be drop shippers at all, but other businesses or individuals who act as middlemen between the wholesalers and retailers, which would leave little room for retailers to make profits.

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