While drop shipping is very similar to the simple marketing
of a conventional product on the internet that we discussed
earlier, there is a clever difference in this approach to
offering conventional tangible products on the web. While
Amazon.com markets, sells, keeps an inventory and ships its
own products entirely on its own, the drop shipper in contrast
only markets the products and collects a decent percentage
of each sale without ever having to deal directly with the
product itself. You are basically an online middleman. It
is an inexpensive way for the supplier to move their products,
it is amazingly simple and inexpensive for the drop-shipper,
and it is convenient and usually inexpensive for the customer.
Even though you are still offering conventional tangible
goods, the drop shipper eliminates the typical costs related
with offering these goods for himself/herself by removing
the need for an inventory or large orders of these goods and
the need for the eBusiness operator to ship them. The drop
shipping based eBusiness owner finds a good supplier of goods
and then markets those goods for the supplier. The supplier
handles all of the inventory and shipping, so the eBusiness
owner has to do nothing but market these products from their
website, direct their visitors to the products, sell them
at retail price, pay the supplier the wholesale price, and
keep the difference. Often the better suppliers actually customize
the packaging so that it looks like it came directly from
the eBusiness rather than the wholesale supplier. In this
type of business the eBusiness owner actually becomes a middleman
and only promotes the product for the supplier from a hands-off
“digital distance”, never even touching the product.
This eBusiness still handles their exchanges only in a purely
digital fashion which allows the drop-shipping online business
to qualify as a purely digital online business.
How do I find companies who will
Drop Ship?
If you’ve worked out what you want to sell, your first
step will be to approach the manufacturers of the goods and
ask if they will drop ship for you. You may be in luck. In
most cases though you’ll probably be referred to a distributor.
If they won’t drop ship, you’ll have to find a
distributor who will, either using the trade press or the
Net. (Searching Google using drop ship product name as the
search parameters usually gives good results.)
So, drop shipping is the way to go
… right?
If drop shipping sounds like a fantastic way to make money
with an eBusiness, it can be. It can also be dangerous. While
I know individuals who are making great money with a drop
shipping eBusiness, I have also heard a few horror stories
as well. There are two major risks often associated with drop
shipping that you need to be aware of if you are contemplating
this approach for your business:
1) You have absolutely no control
over the order fulfillment side or your business.
No matter how smoothly and efficiently you run your side of
your business, your supplier could let you down. Your customer
does not care why they aren’t getting their product
in a timely fashion or whos fault it is. Problems in order
fulfillment can make you look really bad to your customer,
even if the problem is out of your control. Remember, your
chain is only as strong as your weakest link. Make sure that
you ally yourself with a dependable and reputable supplier
if you decide to go the drop shipping route.
2) If you are not careful, you can
easily get ripped off.
Be careful of scams. I can’t really tell you what to
look out for specifically, but do your homework before you
build a relationship with a supplier. Make sure the products
are legitimate and don’t be afraid to ask for references.
Better safe than sorry.
The best way to be positive that no one else will be able
to negatively impact your precious online business is to …
choose one that you can be responsible for from top to bottom.
The only sure way to avoid a potential risk is by eliminating
it yourself.
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