Dropshipping can be a very simple and effective way to become involved in ecommerce. Many established online merchants are now turning to dropshipping companies as a means of minimizing stock on hand, decreasing shipping costs, and cutting down delivery times to customers. Drop shipping allows business owners to send low quantity orders to manufacturers or wholesale warehouse companies, who in turn ship the items directly to the customer. You do the promotion and collect the payment, and the dropship company looks after the order fulfillment.
Because dropship companies can buy in large volumes, they will also be able to offer you the best prices on products, and shipping, which in turn will leave more profit for you. There is no capital investment for you to outlay, and no danger of you having a pile of outdated items in your inventory. Using dropshipping allows you great flexibilty in terms of product range. Instead of worrying about inventory and delivery, you get to focus on listening to the market, and discovering the product your customers want, and then being able to rapidly add those products to your site.
Many wholesale companies will have an interest in working with you in a dropshipping arrangement, as it's an easy way for them to generate extra revenue, but there are a number of points to consider and things to look out for:
Pricing- Don't accept that first drop shipper you come across will give you the best deal. Shop around for the most suitable wholesaler company.
Dropship Fees & Charges- Some dropshippers will have a handling fee over and above freight costs. It's important to know all the costs involved so you can calculate your profit margins accurately. Any wholesaler company that wants to chrage you a "regular participation fee", should be avoided. The only time you should have to pay dropship company anything, is in connection with a specific order.
Shipping- Is the company going to ship international? You will want to ensure their shipping methods will see your clients get their products in one piece and in a timely manner. Also bear in mind that you may need a specific type of shopping cart in order to handle dropshipping.
Accounts- Will the dropshipping company automatically debit your credit card on each order you submit, or can you get monthly payment terms? When you are starting out with a company, they are unlikely to offer credit, but it's good to check if this will be possible once you've established credibility.
Refunds- Returns & Support - The last thing you will want is to be caught in a nasty situation where you have a number of returns- and have to foot the bill. Ask the dropshipping company about their returns policy, what support they will offer you for their products, and what type of guarantees are associated with their products. Be sure to get it in writing!
Credibility- How long have the dropshippers been around for? Do they respond to your requests for information rapidly and professionally?
There are a couple of approaches you can take to finding suitable dropship wholesalers. You can contact a wholesale supplier directly that stock goods of interest, and enquire about a drop shipping partnership. Always be a little cautious if the company hasn't been involved with these kinds of partnerships before.
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