What is drop shipping?
Drop shipping is when a wholesale supplier sends products directly from their warehouse to a retailer's customer. When you list products on-line at an auction, marketplace, or ecommerce website you are the "retailer". Your drop ship program is the “wholesaler” because they manufacture, import, or purchase products in large lot sizes at discounts and stock them directly in a warehouse.
This process minimizes the risk to you as a small business retailer, because you are not required to buy products until you have sold the products. The wholesale drop ship suppliers handle the warehousing, packaging, and shipping of the inventory.
How does using drop ship wholesalers benefit you?
You can start a business with very little risk or upfront investments.
If you are not able to sell products, you are not stuck with inventory.
Since the wholesale supplier ships the products to your customers, you do not have to spend time or money on packaging materials, shipping labels, warehouse rents, or shipping services. You work directly with your product sources to purchase from your wholesale account and price level and set your own retail prices for your customers. You don't have to directly manage product returns.
You work within a positive cash flow model, meaning you collect payment from customers BEFORE you spend any money on buying products.
How do you succeed at running your drop ship business?
The key to success in running a drop ship business is similar to being successful at any business enterprise. You need to find the right products at the lowest prices. You need to build your brand and promote and market your products online, and once you gain the trust of your customers you need to provide value adding customer service.
The biggest risks to your success are working with “middleman sources” or programs pretending to be a supplier but who offer you less control over your virtual inventory and have higher prices then working directly with legitimate wholesale suppliers. Once you find a distributor, creating an account is quick and simple. Do not let a simple application form stop you from being successful. Besides not being able to compete on price, working with “middleman sources” also causes you to lose control over your supply chain. You need to have the most accurate information on prices and product counts to prevent selling products that are no longer offered by your supplier, which can change daily, or products that become out of stock since you first listed them on your auctions or websites.
Let Inventory Source act like your IT Department or Supply Chain Solution
When you make Inventory Source your Drop Ship Data Solution Partner you can leverage the benefits of a wholesale drop ship business while minimizing the risk. This is done by using Inventory Source verified wholesale product sources and working directly with your wholesale suppliers as your product solution partner.
Once you have your product sources to choose from, you need to make sure you get the product data in a format that loads to your site, auction, or marketing channels.
You need this data managed across multiples sales channels.
You need to have the newest products, lowest price updates, and latest quantity figures to ensure you are protecting your profit margins and feed back ratings.
You need a solution partner that can save you hours every day manging your inventory, so you can focus on promoting your brand and supporting your customers.
Summary
Drop shipping offers an amazing opportunity for individuals and small business owners to gain control and realize their entrepreneurial dreams. It is such a powerful business model that even large box retailers use wholesale drop ship solutions for their own ecommerce websites! Did you know that many of the products sold on Wal-Mart.com are processed through wholesale product drop ship suppliers? However, many of these multi-million dollar companies using drop ship must cover the expenses of an entire IT Department, data entry personnel, server hardware, and more to make a product selling products from some of the same wholesale supplier sources that you are able to work with directly.
You do not have to try to compete on your own. Let Inventory Source be your drop ship data solution provider and a powerful ecommerce partner by helping to manage your inventory, provide marketing support, and save you hours every day while your control your ecommerce success.
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