Drop Shippers

I thought it would be worthwhile giving a decent explanation of what a drop shippers are, as there seems to be a lot of confusion surrounding drop shippers and how this business model functions. As a matter of fact, drop shipping, when done correctly, can be a very lucrative business model. But before we delve into the world of drop shipping, a little background on how it all began...

As long as there has been someone who had something, and someone else who has wanted something, we have had some form of commerce. People have always been coming up with ways of selling, swapping and bartering things, it is what has made us such a consumer society today. The general consumer model goes something like this. The manufacturer realises that he is good at making blue widgets, and if he has done his research properly, he has also figured out that there is a demand for them in the general public. The manufacturer, however, has no interest in sales. He is too busy making his blue widgets to be worried about buying shops and hiring staff.

So, along comes the wholesaler or the distributor. These guys really like moving stuff around, especially blue widgets. And they can see that there are plenty of shops out there that would be more than happy to stock blue widgets on their shelves. So the wholesaler buys the blue widgets off the manufacturer for $10 a box. He then goes to the retail shop and sells them the blue widgets for $20 a box, making a great profit. Of course, the retailer doesn't mind, because they are selling the blue widgets off the shelf for $5 per widget, so they are making their own profit and everyone is happy.

That's how it's been for a long time, and of course there are always variations to this model, but this is the generally accepted model of how we purchase goods. There is another model however that is continuing to grow in popularity - drop shipping. There are a couple of different ways that drop shipping can work. The first of these is that the manufacturer themselves becomes the dropshipper. What this means is that the manufacturer takes on another role, that of packaging and shipping their blue widgets to buyers. Instead of the manufacturer using a distributor to on sell their products, they can use middle men salespeople. The second model is that the wholesaler themselves become the drop shipper. This means that they no longer have to worry about on selling to retail shops, because they have an army of people around the globe selling their wares for them.

This model opens up a whole new opportunity for the average person who would like to make some money selling products, without having to have products on hand, and without having to worry about storing them and paying shipping costs to get them to the buyers. This has become a very popular model for entrepreneurs, and websites like eBay have made it possible to be accomplished by anyone with a little knowledge of how online sales work.

How To Make Money With Drop Shippers

Basically, the first thing you need to do is decide on a group of products, or a niche, that you would like to promote. You would then set up an eBay store based around that product. Your next step would be to find a drop shipper (or a list of them) that stock this product. Remember that drop shippers can be either the original manufacturer of the item, or a wholesaler that specialises in that product range. You would then get a listing of items that drop shipper has for sale and put their details on your eBay store. Of course, you mark the product price up so that you can make a sale on the product. When a customer places an order at your store, all you have to do is forward that customers details on to the drop shipper, they bill you for the wholesale cost of the goods and ship the product off to the customer without you having to lift a finger.

The only problem with drop shipping is that it has become so popular that it has almost reached saturation point. There are so many people taking advantage of this business model, that they are all trying to outdo each other on price, which means you end up not getting a great amount of profit from your sales, and the game ends up being about quantity sold instead of the quality of the product and service.

Another thing to watch out for is the scams. Any business model that becomes as popular as drop shipping has become opens itself up to unscrupulous people trying to make a quick buck by messing with the system. These scammers will make out like they are drop shippers when they are in fact just middle men like you. They are pretending to be the distributor and shipper of the product, when in fact they are putting their price on top and selling it on to you. This leaves you in the positions where you are unable to put any money on top of the sale and still match the price of the competitors. A genuine drop shipper should never ask you, as the middle man, to pay a shipping and handling fee. That should always be the responsibility of the drop shipper.

Like any business model, if you are looking at seriously entering the world of drop shipping, then you need to do your research before hand. Don't be had by the scammers because you were in a rush to get started. Read up as much as you can on the subject, join forums and become a part of the community and read lots of books. There is still money to be made using drop shipping, if you are careful and methodical and don't mind working your way up the ladder. Good luck.