Auction Articles

Discover the Advantages and Pitfalls of Drop Shipping

By: Melanie Burns

Drop shipping can be a great way to get started with your online venture. Just be careful to make sure that you know the quality of the product your supplier offers, what their shipping policies are, and their reliability. Your reputation is on the line with your customers, not the drop shippers reputation. You must be able to stand behind your product and service not matter what the source for them.
Make sure to order at least one of each of the items you would receive from the drop shipper. This gives you several things:
1.It will show you the quality of the products. This is very important. You don’t want to offer a product and have your customer receive something that is low quality, falling apart, or obviously not worth the money.
2.It will show you what the packaging is like. How well is the product protected during the shipping process? Is it likely to break or arrive damaged due to inferior shipping or packaging.
3.You can see first hand who they shipped through and how long it took for the item(s) to arrive.
There are many advantages to drop shipping, for example when you are first starting out, capital may be an issue. With drop shipping you can get around that by selling the product first, collecting the money from your customer, buying from the drop shipper, and
keeping the profit. Although you profit may not be as high as it would if you had purchased the products in bulk beforehand, it is still a profit that can get you started.
Another advantage is you don’t have to have products stored around your house.
You don’t have to worry about being stuck with inventory that you cannot sell. If a product doesn’t sell, you can simply drop it from your offering and go on to other more sell-able products.
You can find and sell more items since you don’t have the limitations of on-hand inventory.
If you are considering going into drop shipping to get yourself started, established, or as an ongoing business model, take the following potential pitfalls into account:
•You will get a price break from a drop shipper, but it is often not as low as you could get from other avenues. Be careful to make sure that you have a product that is quality and the price point for you is one that will ensure a profit for you if sold. This is
especially important if you will be selling via auctions. Auctions tend to sell new products for 25-30%below retail. If your price is not good enough, you could loose money on an auction.
•Make sure that the drop shipper gives you a good shipping and handling fee. They have lots of shipping and get a very good price on it themselves. If shipping and handling is high, something is wrong.
•Don’t pay a ‘fee’ to do business with anyone. You are giving them business by buying product from them. If they want more money for you having the privilege of doing business with them, you know this is not a company that you want to
even consider.
•Find out how the drop shipper handles problems. If you have a customer return, how will they handle it. What kind of support will they give you.
•Get references for the drop shipper. How long have they been in business and what is their financial standing? Check the Better Business Bureau. Google their company name to see if there are any complaints or problems you might need to know about before making the decision to do business with them.
If you are ready to make the drop shipping model your own, jump right in. Take these points into consideration, but don’t let anything stop you. Be as informed as you can though, continue to learn and find out all you can about those you do business
with. The road to success is not always a smooth one, but if you can avoid the pot holes, it makes the ride much more enjoyable.

About the Author

Copyright © Melanie Burns

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