Dropshipping

September 20, 2010 by

The Internet is making dropshipping increasingly popular. Dropshipping is when a retailer does not actually have items on stock, but instead sends a customers orders to a wholesale company, or a manufacturer, and they send the items to the customer. The retailer makes a small profit between the customer sale and the manufacturer price. Companies that use drop shipping techniques are Ebay, commerce hubs for retail stores, such as Sears, Doba, Salehoo, and Worldwide Brands. Most people who order online do not know that the person selling the product does not actually have the product in their possession. Most dropshippers hide the fact that they do not have the product in their possession by using two different methods, which are blind shipping, and private label shipping. The customer who receives the product will only find a private shipping label with a return address to the person who sold the merchandise. This is to hide any negative stigma that might follow these types of methods, because most people like the idea of obtaining a product from a retailer that actually belongs to them because they believe that they are getting a quality product. If the retailer does not know anything about the product, the customer is actually getting a blind product that may or may not work correctly. However, dropshipping is usually a successful business venture, where all parties are happy and none the wiser.

The benefits of dropshipping for the retailer is that they make a nice profit from the venture. Many online businesses would not have a business without dropshipping. Buying products to sell can be a costly venture that many people do not have, but they can still do business with dropshipping techniques. Merchants do not have to have a distribution center in order to have a business. Not having a distribution center saves on costs. It makes businesses much more profitable when they can just take the orders from customers, and then send the orders to a wholesaler, who then sends the products to the customer. Merchants also do not have to worry about packing up bulky products, and trying to ship them to a customer. Their main purpose is just to take the orders, and then send them to the manufacturer, or wholesaler. This also helps manufacturers and wholesalers from needing to do all of the leg work. The drop shipper is really just a middle man. Manufacturers will have to pay a license fee and a charge per transaction that goes to the drop shipper. Most of the time this is completely worth it for them. They are making much more in profits than they would if they did not have a drop shipper.

The only drawback with dropshipping is that the wholesaler will not be held responsible for faulty products. The customers will go straight to the dropshipper, and they will have to sort out the problem, so this can be a stressful part of the dropshipping line of work.

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