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Discover the Ins and Outs of Dropshipping

One method for making money from home that allows you to work exclusively at home is to sell items from a drop shipper.

Drop shipping is a method whereby you sell a product and it gets shipped by the drop shipper. It’s an easy and excellent way to make money, but there are some precautions.

How does drop shipping work?

First, the basics. Let’s create a scenario so you can see how this works. You sign up with a drop shipper and choose several of its products to promote and sell. You begin selling the products on Ebay or through your own site. You can use photos and you provide a good description of the item.

Someone buys one of your items and you send an email to the distributor or manufacturer and inform them of the sale. They in turn ship the item. You don’t have to keep an inventory or pack up items or ship them. You simply manage the sales and let the distributor or manufacturer handle the rest.

You can determine your profit margin when you sell drop shipped items. If you sell candles that you pay £5 each for wholesale and that cost £3 to ship, you can charge £10 per candle, plus £3 for shipping. Your net profit is good, nearly as much as you might make selling your own inventory. But you save time and money by not having to deal with the inventory.

Advantages of drop shipping

There are many advantages to drop shipping. While the manufacturer or distributor handles the product inventory and shipping, you can handle just the sales. This gives you time to build a website, market the website, and even post eBay listings. You can spend more time marketing the products.

For people without a lot of space for inventory, this method is ideal. You can provide many choices in product and give the impression that you have solid inventory, but you don’t actually have to deal with the inventory.

You can offer many more products for sale than you might be able to offer if you had to store your inventory and you can also offer products that are unusual and unique, often coming from artisans in other countries.

You can also skip the hassle and additional cost associated with having to ship inventory. There are no boxes to store, no tape to buy and no shipping companies to deal with. You can save money this way.

Disadvantages of drop shipping

The main disadvantage of drop shipping is the risk you take with the distribution company or manufacturer you choose to use. Some are unreliable and will ship items slowly or not at all. If they run out of an item, they might not inform you fast enough so you will continue to sell it without knowing that your customers aren’t receiving the item. This can seriously damage your credibility.

Other problems can arise from product quality and overall reliability of the drop shipping company. Good research into the company itself can help you head off many of these problems.

How to choose drop shipping company

Do a lot of research before you choose a drop shipping company. You want to know how long the company has been in business and what kind of customer satisfaction the company can boast about. You want to know that the products for sale are good quality (you can check on this by ordering a product for yourself).

Don’t pay a drop shipping company any money for a “monthly service” or anything else. You should only have to pay them for the wholesale price of the items and nothing more. This can be paid incrementally, as each item is sold, or you might pay the company each month for items sold that month.

As with anything, it will behoove you to do your research, try it out a bit and then make sure (through regular quality checks) that the drop shipping company is the right company for you.

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