Real Estate

What is drop shipping and why should you care?

What is drop shipping and how could it positively impact your finances? You may want to give some serious thought to this form of marketing and how you can put it at the heart of your business and save yourself a great deal of stress and money.

What is drop shipping?

Like all good ideas, dropshipping is a simple concept. After you make a sale, you contact the supplier of that item and purchase it, but have it shipped directly to your customer. You may have also heard of this as arbitrage.

The advantages

Holding money in stocks is not a great idea, especially if you are a sole trader, perhaps working from home. Drop shipping eliminates this problem, plus you make a sale before you need to buy.

Buying products in bulk, storing and distributing them will likely mean you’re paying less per unit, but when you factor in the added costs of storage, distribution, handling and prepayment, drop shipping has a lot to recommend it.

If you are a solo entrepreneur, time management is of paramount importance and I suggest you spend 90% of your time concentrating on marketing. You are not essentially a manufacturer, wholesaler, or distributor, so I maintain that you should focus on generating sales and let others do the boring, time-consuming stuff.

If you have made a sale then you have a responsibility towards your customer however if the product is faulty or unwanted it will be returned to the supplier not to you. You may be involved in a couple of phone calls or emails, but again you will avoid handling the merchandise.

In short, you can operate on a large scale without the usual hassles associated with traditional retail.

What does drop shipping have to do with online auctions?

If we take the notion of keeping overheads to a minimum, working from home while also increasing income one step further, then there is a way to combine online auctions and drop shipping.

The best known and largest online auction house in the world is, of course, eBay. Staying at home full time or part time, the eBay business person is a great example of how to eliminate many of the difficulties associated with making money online. You don’t need to create a website or generate leads, eBay does all of that for you, leaving you free to get on with the essential business of offering first-class products for sale.

Finding out how to identify which items sell best on eBay and where to find vendors who ship them to their customers should be the subject of another article; however, I’m sure you can appreciate the enormous potential of this marketing strategy.

I trust I have answered the question ‘What is drop shipping?’ and i also hope you can see why you should care if you have any interest in creating a second income or maybe a full time income that is as uncomplicated as possible.

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