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What is dropshipping?

Posted by Michael Bloch in ecommerce (Saturday April 28, 2007 )

If you’re looking to get into ecommerce or branching out into establishing new sites addressing different segments, a drop shipping model might be worth considering if you wish to sell hard goods. Using a drop shipping arrangement, you don’t even need to maintain an inventory; so it can really open up many new possibilities.

A killer for any business is not having enough merchandise on hand, or conversely too much – especially goods such as consumer electronics where margins can be slim and the product line is always evolving. What you buy for a thousand dollars today can be purchased for substantially lower within a couple of months, sometimes weeks.

Dropshipping arrangements enable online business owners to submit low quantity orders to distributors who then ship the items directly to the customer. In a nutshell, you handle the pre-sales, sales and after sales service and the distributor takes care of order fulfillment.

The dropshipper can sell to you at close to wholesale rates + shipping, there’s little or no capital investment required from you, no stock control issues to take up your time and allows you incredible flexibility in the range of online stores you can set up.

Drop shipping does have its challenges though, so if you’re interested in learning more about this business model, read my drop shipping guide.



 

 
1 comment for What is dropshipping?
  1. We have been using these guys for all of our dropshipping for years.
    A little pricey but you cant beat them!

    Comment by John — May 12, 2007 @ 6:03 am

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