Dropshipping, An Introduction

If you've ever spent any time online on eBay, or some other ecommerce site, you've probably come across the term dropshipping. You're probably wondering what it is and how it works.

Put quite simply dropshipping is a supply chain management system where the manufacturer ships the products directly to the retailer's customer but the retailer makes the profit.

This means the retailer doesn't have to pay for, or store, items he won't sell freeing up space and money. It also reduces the number of hands the item passes through as the product goes directly from the wholesaler to the customer.

To guarantee customers remain loyal to you most dropship firms will use one of two methods.

Blind drop shipping: When drop shipping companies send out products without any of their own advertising or logos on them.

Private label dropshipping: When the client of the dropshipping company provides shipping notices to go in with the package, allowing the client to customize and ad value to orders.

There are literally thousands of dropshipping services on the internet with a Google search of dropship companies receiving 210,000 results at the time of writing.

The community of people using their service is just as large; a Google search for 'dropship forum' showed 121,000 hits at the time of writing.

Chinavasion reported their daily dropship shipments, thanks to eBay Powersellers, are now up 300% compared to the same time last year.

You don't need to have spent much time on eBay to have seen the list of dropshipping companies and dropshipper wholesale suppliers for sale on the site, often for a very low price.

Unfortunately, these lists are often filled with these dead or fraudulent sites, meaning they aren't even worth the little money you initially paid for it.

Dropship aggregate companies, or companies that supply you with a selection of dropshippers, should be treated with caution for the same reason. Unless your store stocks a wide range of products that require a number of different types of products you may be more successful finding the companies yourself.

You will often enjoy more success by approaching a wholesalers or factory agents directly or using a wholesale dropship company. They usually keep up to date more regularly and are more reliable at sending out products

By making some adjustments to your payment system you should be able to get customer's details sent to your drop shipping company automatically.

The first thing you will need to do is to set up your shopping cart so that it will notify the drop ship website automatically when a customer has placed an order and pass on all the customer's details in a format suitable for the drop shipper to fill out the forms necessary to start the shipment.

Most e-commerce sites already have a shopping cart but they will need to check that their carts are compatible with their wholesale dropshipping company's invoice system and then find out what needs to be done to make the whole process automatic.

Drop shipping is an exciting supply chain management system that, with a little bit of care can save you money and save storage space. With a little more research you could well be on the way to kissing your storage problems goodbye.