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The business of drop shipping

The Business Of Drop Shipping

Drop shipping is a technique of delivery of items. In this method, the retailer receives the payment from the customer and the manufacturer directly ships the product to the client. The retailer serves the purpose of a middleman. He receives the order from the customer and sends the details to the manufacturer or wholesaler, who in turn, sends the order to the customer. The profit of the retailer lies in the difference in amount between the retail and the wholesale cost.

The retailers may display some items in their store. This allows the customer to have a look at the product similar to the one they want to buy. The retailer may also show a catalogue of the product or a website where you can get the details of the product.

Drop shipping is ideal for a retailer who deals in small quantity. On receiving a large order, the seller may make arrangement to ship the goods to the client directly. It is also useful for shipping large items to the customer.

Drop ship eBay is an auction site where the sellers make a list of the new items and send the product to the person who has made the highest bid from the manufacturer. The seller is also allowed to list the items that are not presently available with him if he abides the policy of eBay.

Drop shipping is very useful for small retailers and sellers who only use catalogues and for online stores. The customer of these stores does not expect the product right at the time of purchasing of goods. So a bit of delay in the delivery is not considered as a drawback. The customer may place an order by inspecting the similar item displayed in the shop or by looking at the picture in the catalogue. The retailers also need less space for storing the items in a safe and secured place. They can dedicate most of the place for displaying the items rather than stuffing it with bulk items. Drop shipping retailers also need not maintain an inventory. There is also no need to hire large number of employees for security, inventory, and handling of goods.

Drop shipping wholesalers prefer this method of delivering goods as the bulk orders can be shipped directly to the customers by cheaper methods of shipping. The retailer functions as a salesman and the drop shipper do not have to pay for the fuel and handling charges. The items also remain safe and secured as the wholesalers have better storage space than the retailers. Moreover, there is no scope for duplication of the product as it is shipped directly from the warehouse of the drop shipper, thus decreasing the cost. The flow of cash is also positive in this method as the cash remains for a certain period with the retailer.

Drop shipping has certain drawbacks as the customer has to pay both the shipping charges and the cost of the product, which may prove to be quite expensive while ordering large items. Yet it is a preferred method of delivering goods as it is easier and helpful for small and online stores who have problem of space. The manufacturers can also display their products properly.

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