Instead of buying products in bulk, like from wholesalers, dropshippers will sell you single/multiple items at a discounted rate (Not quite wholesale and not quite retail the price, it will be somewhere inbeteween) They stock the products. You only buy from them once you make a sale from say eBay or your own website. When you purchase the item from the drophipper, you pass the dropshipper your buyers delivery details and they will deliver your ordered item straight to your buyers door in clean plain packaging. This sounds a little too good to be true? Well it isn't, this is how dropshipping works.
This is how many people make money online from the comfort of their own home. There's no need to have large upfront capital, like you would need if you planning to buy wholesale. There's no need to have storage space as the dropshippers stock the items and they also package the item and send it out.
So what are the draw backs?
To make you realise this is a serious business module i'll show that there are some drawback to dropshipping. These draw backs don't stop people from making a serious amount of money online.
- Small profit margins - As I discussed previously, you will be buying your items at a price somewhere inbetween wholesale and retail, so there will be a smaller profit margin than if you were to buy wholesale, but as you know with wholesale you have to buy in bulk. So lets say you're selling a toy car and the retail price is $20 the dropship price is $13 and the wholesale price is $5 dollars you might thinking you're missing out on a potential $15 profit. Well no note really because remeber with wholesale you have to buy in bulk. So there will be a time delay before you could see a profit. You'll also have to store and post your wholesale stock. So those smaller margins you make with dropshipping, just means you need to make more sales to see the same returns wholesale would bring you.
- Broken items - Many dropshippers won't take returns, so you will need to take these as a loss and issue a new product. You do not have control of the packaging procedure a dropshipper follows and you can control the person handling delivery. This is part and parcel with selling it can happen even with wholesale items, if they get damaged in transit you need to swallow it and take it as a loss. The time and effort it takes to try and resolve the issue with who's to blame, its is just simpler to just send another product straight out. This will happen rarely but you need to be prepared for it. Have a kitty for returns and broken items.
- Wrong orders sent - This can happen as dropshippers deal with hundreds if not thousands of orders it can sometimes happen that they send out the wrong product. It my time of dropshipping this happened very rarely. Customers can understand errors are made, so by being prepared that there are some losses in selling you can issue another straight out.
- Out of stock - Because you won't be holding stock (Although it is a good Idea to stock a few of your best sellers ) you need to keep an eye on your dropshippers stock levels. If they are out of stock of your item you've just sold on eBay, you can always ask your dropshipper when they will be getting new stock in. Sometimes, they can have the item back in stock within a couple of days so you can still place your order. Or you can ask your customer whether they would like a refund or another item. Communication is so important.
- Finding them - Dropshippers are hard to find in the search engines with the keyword "dropshippers" there's good reason for this. Would you want dropshippers easy to find? Ofcourse not! Dropshippers are only interested in resellers ( you ) not people looking to buy items at a discounted price for themselves. So they don't actively try and rank in the search engines, if they did they would dilute their market and become an unattractive dropshipper if everybody was using them.
So there's some of the main draw backs to dropshipping. All dropshippers are different and you'll have to come up with your own criteria of what makes a good dropshipper and whether you'll use them. So is it a viable way to make money on eBay? It certainly is! It is best to start off small and slowly build business, the more money you can set aside to use for your venture the better, although you can start with as little as $100. So lets look at why this a great way to make money online, at home.
- You work when you want
- Low start up cost's
- No need for storage
- No need to buy in bulk
- Make money at any time of the day
- Work anywhere in the world
- No need for a website
- Make enough to pay your phone bill each month, or earn as much as you want.
- Sell a variety of products.
- No need to spend your time posting and packaging
The eBook Dropship 4 idiots show's you dropshipping's full potential and how you can seriously profit from it. By reading this eBook you'll understand where people go wrong and how to avoid their errors. It will show you more than just finding a dropshipper and listing it on eBay. They have a set out business module that you can follow. It will show you the bigger picture than just selling through eBay, by having your own website too. Ways to pull in traffic to set you apart from other dropshippers who are like the other 95% relying on people searching through eBay. This eBook also comes with a free 200 dropshipper list with every purchase. ( Finding 200 dropshippers through Goolgle will take you months! ). If you want to know more of what dropship 4 idiots will teach you Click Here!