What is drop shipping?

by Markod123

Posted: 13 years ago 12 replies

INTERNET MARKETING

Hey Warriors

Can anybody please explain to me in as much detail as possible as to what drop shipping is, how it works and how much investment (financial) needs to be done. Any examples would be great.

Many thanks in advance

Marko

#drop #shipping

TheCG 13 years ago

Drop shipping is when a product manufacturer agrees to take individual orders directly from you and ship it to your customers address.

Say for example I sell coffee cups. I sell them for $5.00 each plus $3.00 shipping. You set up a site where you sell the same cup for $8.00 each plus $4.00 shipping. When you take an order for a cup, your customer pays you $12.00 (the cup and shipping) and you forward the order and customer information to me, pay me $8.00 (the cup and shipping) and I ship the cup directly to the customer.

You pocket the $4.00 difference.

This allows you to be the middleman with zero overhead.

Make sense?
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yichuan118 Banned 13 years ago

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- genietoast 13 years ago
  
  From my understanding, dropshipping is a form of ecommerce with a webstore.
  
  You work with a wholesaler who has the products you want to sell and promote them on your webstore.
  
  When you receive an order, you call the wholesaler to package and ship the product to the buyer. This is one of the advantages of dropshipping. You don't have to deal with storing inventory.
  
  You will have to take into account wholesale cost of the merchandise, shipping fees and state taxes. Therefore you have to markup prices in order to make a profit. You deal with all customer service issues. The dropshipper service does not. You create your own webstore.
  
  If you're a US citizen, you will be required to get a merchant's license or register an LLC because some wholesalers will simply not deal with people with no business licence.
  
  So dropshipping is similar to internet marketing, but it requires a business license, and you need to keep an eye on the logistics supply chain.
  
  Check Worldwide Brands and Salehoo for more information about dropshipping.
  
  Thanks
  
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  GlobalTrader 13 years ago
  
  I would like to add my endorsement of Worldwide Brands as provided in the post above.
  
  I have know Chris Malta the founder of Worldwide Brands since he started back in 2000 and his site contains a wealth of free information, including many videos about both drop shipping and Internet marketing.
  
  One thing to be extremely wary of is a company that claims to offer dropshipping but who requires you to make some kind of payment to gain access to their inventory and services. These kind of companies make more money off the fees they charge would be dropshippers than they do off of actually selling their products through dropship dealers.
  
  There may be some WF'ers who disagree with the above paragraph but Chris Malta will not allow those type of companies into their database for the very reason just stated.
  
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  GlobalTrader
  
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  entry 13 years ago
  
  When you pick up a toy ship and then drop it from high up.
  
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  BruceWood 13 years ago
  
  Another form of drop shipping is used by those who manufacture or import items and pay a warehouse/shipping company to hold the merchandise and ship it out as orders come in. In that case, your costs are the items + warehousing + shipping. This method is popular with broadcast marketers, and offers a better mark-up.
  
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  Bryan Zimmerman 13 years ago
  
  Track down Sam England on this, he knows what he's doing with drop shipping.
  
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  Sam England 13 years ago
  
  Thanks Bryan, but it looks like most of you all answered the original post perfectly...
  
  ~Sam
  
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  > Ecommerce Riches < | > Drop Shipping University < | > Ecommerce Goldmine <
  
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Sniper28 13 years ago

They said it well. But Manufacturer dropshippers are better than middlemen dropshippers.
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- Daniel J 13 years ago
  
  I will add another endorsement for worldwide brands. I'm not an affiliate, but I should be for how much I promote them on this forum
  I am a member and the membership has been EXTREMELY valuable. One thing to note is that dropshipping sounds amazing, but it has drawbacks- you don't have control over your inventory. If the manufacturer/supplier runs out of stock, you've got some big customer service issued to deal with that are not fun. Also, the profit margin is less than buying in bulk which makes dropshipping a horrible option for selling on marketplaces like ebay, Amazon, half.com etc (your competitors will always be priced lower and you will be penalized if anything is "back ordered.") With that said, if you can find a hot market and you know enough about SEO, PPC etc, you can do very well with dropshipping and it won't cost you a dime up front!
  Daniel J.
  
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  lamasta 13 years ago
  
  Hey Marko, I would just like to direct you to a video just released by Steve Clayton with an online dropship directory of 1000s of dropshippers and wholesalers.
  
  I had purchased Steve Clayton's ecommerce course, "Niche Blueprint" and his latest 'DropShip Blueprint' product is a must have if you intend to do any ecommerce marketing. And yes, I do affiliate his products... only because they are what I use... Peace...
  
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  Mikee17 13 years ago
  
  I agree with those above. I've personally know Chris Malta of WorldWideBrands for nearly a decade. Very honest, trustworthy, and has a great product.
  
  They have a membership where you can find just about anything you want and have it dropshipped.
  
  Just be sure to check eBay "street prices" against the wholesale price.
  
  Also, pick odd-ball , non-commodity items so lessen your competition.
  
  ...Mikee17
  Founder: AuctionTNT.com and PlatinumPowerSeller.com
  
  Thanks
  
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