The Value of Drop Shipping

If you want to start a business on the internet, but lack the capital and/or expertise to build an e-commerce store from scratch, drop shipping might be your best option.

Drop shipping is an arrangement in which a retailer does not keep goods in stock, but instead transfers customer orders and shipment details to either the manufacturer, another wholesaler or dropshipper.

In this post we'll talk about what drop shipping is, how it works and how it can benefit your new business venture.

There are a lot of benefits to operating a drop shipping business. Some of them are listed below.

Drop Shipping is Easy!

Building a dropship ecommerce site is very easy and low cost compared to building a traditional ecommerce web site. A drop shipped site can be built by anyone with basic HTML knowledge in just minutes. There is no need for you to purchase any hosting or domain names for your business. You will create your own business website using blog or CMS software such as WordPress , Blogger , etc.. You can then easily customize it to suit your business needs.

The Shopping Cart is an Amazing Tool!

A shopping cart is a great tool for ecommerce businesses of all types and sizes. The shopping cart allows you to collect orders from customers over the internet and also allows you to manage customer's credit card information and send them invoices. A drop shipping website can have its own shopping cart with a small storefront that will display the price of merchandise dropshipped by the merchant, with sale prices listed next to the discount amount for customers who want to buy multiple items at a time.

How Does Drop Shipping Work?  Drop shipping works in one of two ways: buy it now or wholesale (drop ship).

Most of the time, drop shipping businesses offer their customers the option to purchase items at "wholesale" prices. The customer can look through a list of products, select some items they would like and purchase them at a lower price than they would be able to find them anywhere else.

If you're familiar with wholesale or discount sales, then this process won't really come as a surprise.

However, it's not always so simple for customers who are used to buying things online with just one click of a button. Drop shipping websites that have their own shopping cart allow customers to choose items from the online database and put them in their shopping cart.

The customer can then proceed to the checkout page where they will choose to pay for their order by credit card, bank information through PayPal, or a combination of methods.

Once payment is received by the drop shipping website, the merchandise is then shipped directly from the store's warehouse to their house (or apartment), or wherever else they tell the dropshipper to ship it.

The dropshipper ships the products directly from their store and receives payment directly from the customer. Once items are shipped, they create an invoice and send it to customers through one of several sales channels available online such as Facebook , Twitter , email, etc..

Some companies also offer free shipping on orders over a certain dollar amount. Other companies offer store credit for customers who make their first purchase.

In either case, the customer can make the decision to purchase additional merchandise from the same site or from a different drop ship website.

How Can Drop Shipping Benefit My Business?

Drop shipping is a form of business that allows you to operate an ecommerce business while avoiding many of the costs associated with purchasing and operating your own inventory. There are also several other benefits when you run a drop shipping business that include:

There are no costs associated with warehousing items because you don't have to store anything. You never even touch any of the merchandise! All you have to do is add items to your web site and send invoices when orders come in.

You do not need to purchase inventory. All dropshipping sites have an inventory of their own and ship thousands, if not millions, of products each year.

You can accept credit card payments from customers through the various sales channels built into all drop shipping websites such as Facebook  and Twitter  .

You can offer free shipping on orders over a certain dollar amount.

In most cases, there are no monthly fees or maintenance costs associated with your drop ship business (only fees for transactions. There are also some fees for services for one-time purchases only.

What are the Disadvantages of Drop Shipping?

As previously mentioned, there are several disadvantages to drop shipping. These include:

Depending on the price of items and whether they are sold in limited quantities, it might not be a very profitable business.

It is generally easier to sell products through traditional retail stores than it is to sell through a dropshipping site. This can be good or bad depending on what brand names you want to carry and how much inventory you have available to offer your potential customers.

Using dropshipping sites requires the customer to purchase an item from their storefront rather than a retail store. The price difference between the sale price of items sold through a brick and mortar store and the sale price of items sold through a dropshipping site can be significant.

You cannot take advantage of the free shipping promotions offered by certain retailers on dropshipping websites, such as free shipping offers for customers who buy over a certain dollar amount.

Your customers will not have the option to return an item purchased through drop-ship websites without paying for return shipping costs. You will, therefore, need to be diligent in addressing potential customer concerns or issues with your online business.

When compared to operating a brick-and-mortar store, operating a drop ship business can be quite difficult. This could be considered a positive because it means you still own your business even if your sales are not great. You can also add Drop Shipping  to an existing retail store to increase sales.

Drop Shippers help small businesses and ecommerce websites earn extra profits by delivering the goods purchased by customers from the dropshipping site directly from their warehouse.

By utilizing dropshippers you can buy wholesale products in bulk, with more time to search for new items and brands that will be profitable for your store all year round, plus take advantage of free shipping promotions offered by retailers on their websites.

Conclusion