What is Dropshipping?

Drop shipping is a very simple and effective way of ecommerce. Numerous online established merchants use drop shipping companies to decrease their shipping expenses. Relatively, drop shipping has also been used to minimize online merchant’s stock on-hand. It helps web site owners to send their low/single unit quantity orders which are gathered via their web sites to warehouses or manufacturers, who will then “drop ship” the orders or products directly to the average customer.
Some advantages of drop shipping are as follows:

  • Since warehousing companies are more likely to purchase in bulk, they will also offer you (the web site owner) the best price on your shipping and products, which can generate an increase in your overall profit.
  • There is no initial capital or investment required, and no invested inventory is needed.
  • With drop shipping, you are guaranteed greater flexibility for your product range.
  • Using the drop shipping method, you no longer have to worry about delivery and inventory, so you can get a better focus and idea on markets and learning how to discover products that visitors actually want.

There are a number of factors that you must consider when joining companies via a ‘drop shipping arrangement’. Since these companies view this method as an aim to generate more revenue, you as a web site owner must never accept the first drop shipper offer unless you are positive that they can provide the “Best price guarantee” to you.
Secondly, you should consider the drop ship charges and fees. Knowing the overall expenses involved can help you better calculate the accuracy of your “profit margins”. Make sure that whatever shipping methods these companies are using, are effective enough to ensuring that your clients actually receive their items or orders safely.
In terms of accounts, you must also consider the payment terms of the drop shipping company. Some companies may prefer to debit your credit card with each order, while some may give you a monthly payment. Some companies may also offer credit, so before agreeing to start out with a particular company, it is imperative that you check out their payment style and credibility.
Additionally, you must ask your drop shipping agency about the type of return policy and support they have to offer for their products. Be sure that you get in writing the policy and guarantees which are associated with the products.
The credibility of the drop shipping company must also be prioritized. You must do your research and find out the length of time the company has been in operation for and how effective they are in responding to your informational requests.
So if you are interested in drop shipping, well you can simply set up your web site which includes credit card processing and “shopping cart” facilities, and find suppliers who you wish to open an account with. The rest simply falls into place once you are fully comprehendible with the drop shipping method.