Browsing through the net, one may come across with a lot of interestingly laid out sites offering to sell a variety of items from clothes, accessories, trinkets to knick knacks. They are collectively known as Drop Shippers. What is Drop Shipping anyway?
Well Drop Shipping is a very lucrative business. Anyone who is computer savvy and has a sense of money making skills can open up a drop shipping business. It is an online shop, set-up to cater to a vast number of clients to sell enumerable types of products. The costumer can choose a product from the catalogue posted on your website by filling out an order form and sending the payment to you. You in turn order products from the wholesalers and they ship the goods directly to the consumers.
Sounds pretty simple, right? In fact it is. Here are some of the things to think about before diving into the business:
1. No need to invest large amounts of money to stock products since you first receive the money from the costumer before informing the wholesalers to ship the product directly to the consumer. So if you plan on not stockpiling products in your own home, you might as well have a positive cash flow, wherein you don’t need to invest a cent at all and gain a profitable income.
2. No regular stock inventories. Since you have the products shipped from the wholesaler directly to the consumers, you don’t need to count on-hand stocks since there is none to begin with.
3. No need for a storage room
4. Have access to enumerable types of products since there are a vast number of wholesalers around to keep you supplied.
5. Saved the effort from packing, transporting and delivering the goods to clients.
6. You can devote most of your time on enticing potential clients.
7. No limits on the size and shape of the product. It will be taken cared of the wholesaler drop shipper.
1. Competition. Many are able to realize the benefits of setting up a drop shipping business. Hurry up and set-up your own while the business is still lucrative.
2. Due to competition, you have to adjust the profit margin of your products.
3. Keep track of supplier’s supplies. In rare occasions, suppliers may run out of stocks and as it is, you have to diligently watch out for the number of stocks ready for sale.
4. Limited number of products sold at a time. In drop shipping, you can sell only one product at a time. In doing so, you get a slightly higher price for the single item as opposed to bulk buying.
5. Drop shipping fee. This is added to the selling price.
6. In rare occasions, clients erroneously fill out order forms.