Dropship - The Pros and Cons

Dropship - The Pros and Cons
Dropshippers are suppliers who hold a large inventory and with whom you enter into an agreement to send out orders to your customers on your behalf. You collect the retail price plus postage from the customer, place the order with the dropshipper, pay the dropshipper the wholesale price plus postage and that’s it. The difference between what the customer pays you and what you pay the dropshipper is your profit.

Dropship Pros
• You do not hold any stock
• The dropshipper usually allows you to use stock photographs for your listings
• You do not have to package or send out the items
• You do not have to wait to be paid commission, your money is the difference between the cost price from the dropshipper and the sale price to the customer
• You can offer a huge range of items without having to pay for them up front therefore you can get up and running with no outlay for stock.

Dropship Cons
• You usually never get to actually see the items in the flesh so have to rely on the dropshipper to provide good quality items
• You have no control over the stock levels so have to keep a close eye on the dropshippers inventory
• The profit is usually a fixed percentage and if you are selling low value items you will have to sell a lot to earn a good return
• Good dropshippers are usually easy to find which means that more sellers will be using the same companies which will tend to saturate the market.

If you like the idea of dropshipping and decide this is the route for you there are a few things you can do to increase your sales. When you search for dropshippers remember that a lot of companies may be interested in the idea but have not tried it yet. This means that they may be open to the suggestion.

Find items that you would like to sell and then approach the wholesalers in writing with your proposal. If they are not interested you have lost nothing, if they are you will have gained an instant step up the sales ladder as you will be offering something different to your customers.

Search smaller sites not just the obvious ones, you will be surprised how many companies are willing to try out new ways of doing business. Do not search simply for “dropship” as smaller companies may be easily overlooked. Skip the first two or three search engine pages and look through the next few pages. You may find some gems here!

Overall, dropshipping can be a profitable way to do business so make sure you do your homework and check out this potentially valuable resource.

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