We have all used an online auction site at one point or the other. After noticing that the sellers make a pretty decent profit, you have decided you want to sell on eBay or open your own online shop. The problem is your resources and finances are minimal. It is not an easy thing to acquire the space you would need for holding stock, and you may not have the time to pick up, package and post the items you want to sell.
The idea of having to with large orders that need shipping and handling can put you off, but in the business of buying and selling, there is a technique called drop shipping.
Now, why should you use a drop shipper? Well, for starters, you won’t have to spend a lot of money on holding an inventory of items. This is costly and requires a lot of paperwork. If you intend to do all the work yourself, this may save you from having to hire others in the long run to handle work that can become too much for one person.
If you want to sell on eBay for example, you can just set up your own eBay store with the products you want to sell, like toys or electronics. When the products get sold, you purchase them from the drop shipping firm that you have developed a business or trade relationship with.
Because you have no inventory, you will have no storage costs. This means that with a lowered overhead, you will be able to make a sizeable profit. If you do use the services of a drop shipper, it would be like having your own staff at a convenient warehouse.
Since the drop ship system is so promising, there may be drawbacks to be aware of. As a small business, you must be cautious. Some companies that claim to be drop shippers are actually not. A drop shipper should not charge you extra fees, such as a small sum to drop ship each product or a monthly fee. You should only have to pay for the item and the cost of shipping and handling to deliver to your customer.
Another problem that may arise with drop shipping is that the product is out of stock. To prevent this, it is best to test the firm’s services by having an item delivered to you. This way you can see for yourself how they package the item. You will also see the details and information they put on the packages. You would want them to put your company details, so that your customers would remain loyal to you.
It is also important to ensure that the catalogue they provide is not out of date. It would not be fair to get the blame for a drop shipper that cannot deliver quality to a customer on time.
Now that you know the ins and outs of drop ship and wholesale, you would want to find the right firm. You can look for books, in the reference section of your local library or on the internet for a wholesale directory such as Salehoo.