Making Money Online with DropShipping, Pros and Cons

What is Dropshipping? 

Many people make money online Drop Shipping. Drop shipment or drop shipping is a type of retailing where the retailer doesn't keep goods in stock, but instead passes their orders and shipment details to the wholesaler, who sends the goods direct to the customer.

The seller makes money on the difference between the wholesale and retail price. This is basically how dropshippers make money online.

Advantages of Dropshipping 

Drop shipping can be a very simple and effective way to get started in making money online. Many online merchants find drop shipping strategies are good way of minimising stock holding, decreasing overall shipping costs and cutting down on delivery times to customers.

No need to hold stock. 

Drop shipping allows web site owners to send single or low quantity unit orders gathered on their web sites to manufacturers, or wholesale warehouses, who in turn ship the items directly to the customers of the web site owner. Typically you take care of the promotion and collect the payment, and the drop shipper looks after order fulfilment.

Buy at low wholesale prices. Drop shippers can buy in huge volumes this means they will be able to offer you the best prices on products and shipping, usually wholesale.

No money up front for stock. 

There's no capital investment, no need to invest in stock and no danger of you suddenly having large stocks you are unable to sell. You can sell a wider product range without buying stock.

Using drop shipping allows you great flexibility in terms of product range. Promote as much or as little as you wish. No need to worry about inventory and delivery You can focus on listening to the market and discovering the products your visitors want to buy.

Disadvantages of dropshipping 

Prices. 

Don't accept that the first drop shipper you come across will give you the best deal, you should shop around.

Fees and charges. 

It's important to know all the costs involved so you can calculate your profit margins accurately. Any wholesale company that wants to charge you a regular "participation" fee should be avoided - the only time you should have to pay a drop ship company anything is in connection with a specific order.

Shipping.

Is the drop shipper using a reputable shipping company to deliver the goods? Where will they ship to?

Accounts. 

Will the drop shipping company automatically debit your credit card on each order you submit, or can you get monthly payment terms?

Support, returns and refunds. 

The last thing you'll want is to be caught up in a nasty situation where you have a number of returns - and have to foot the bill. Ask the drop shipping company about their returns policy, what kind of support they'll offer you for their products and about any guarantees associated with their products - and get it in writing.

Credibility. 

How long have the drop shippers been around for? Do they respond to your requests for information rapidly and professionally? Young drop ship companies and wholesalers have the habit of going bust quickly, or growing too rapidly and as a consequence basic good customer service suffers.

How do I get started with Dropshipping? 

Its fairly easy start making money online with dropshipping, the barriers to entry are low and you shouldn't have to invest much money up front.

• Set up a online shop 
• Find wholesale suppliers of products you wish to sell that will drop ship 
• Open an account with the company 
• Build your site, using content and images provided by the drop shipper or produced by yourself 
• When an order is made your site should alert you and take payment 
• Pass the customer details to the drop shipper 
• The drop shipper should then bill you at the special price you have agreed upon. 
• Fulfils the order (in most cases with labels referring to your business/web site instead of the drop shippers) 

How do I find drop shipping friendly suppliers? 

You can always contact wholesalers directly asking them if they operate a drop shipping program. You can usually find details by searching on the Internet. Searching for the terms "drop shipping" or "drop ship" along with your area of interest usually gives pretty good results.Remember, do as much research as you can before jumping into any business online.

Also, be careful of people selling drop shipping lists, they are usually scams. If you are serious about drop shipping its best to find suppliers yourself.