What is Dropshipping? Most people that search for information on how they can make money online at one point or another come across the opportunity of dropshipping but then struggle to understand just what it is.
Basically dropshipping is where you act as a retailer but instead of having the hassle of storing an inventory of stock on your own premises the order you take is instead passed on to a wholesaler. The wholesaler will then deliver this order directly to your customer.
The obvious benefit of this is, as mentioned above, the fact that you never actually have to deal with the items yourself as basically you act as a middleman. Another benefit is of course the fact that you will make a profit on the item as you will be getting the item at a wholesale cost and selling it at a marked up price.
Dropshipping is beneficial for small businesses that simply cannot afford to buy in bulk or afford a warehouse in which to store the products until they have been able to sell them on. Although small retail shops and those using mailing catalogs can benefit from dropshipping there is no doubt that the biggest users of dropshipping are those with internet based stores.
As users of dropshipping don't have to worry about an inventory for their stock it also means they are unlikely to need any staff other than themselves, another way you will be saving expenses.
Manufacturers are using dropshipping more and more as they see it as a good investment and a way of lowering there cost.
Sending items in bulk is expensive for manufacturers thanks to the cost of fuel if they have their own fleet or the expense of hiring an haulage firm to deliver for them. With a smaller number of items to dispatch they can use cheaper methods, such as couriers like UPS, to deliver goods.
Another benefit for the manufacturer is that they are of course obtaining an extra sales person but with the added benefit of not having to pay them a wage.
Of course it would be stupid of me to claim that there aren't any drawbacks that come with dropshipping as there most certainly are. That said with good information at your disposal then it is certainly one of the best ways to make money online you will come across.
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