Dropshipping Can Save Your Business

by A.D Paterson on 29/09/2010

Dropshipping is something that many businesses have heard about, but not too many of them actually know what it means, and that means that there are a lot of businesses out there that aren’t taking full advantage of it.

In this article we’re going to start off by looking at what it means to dropship, next we’ll see how it could potentially save your business, and we’ll finish by looking at how you can start dropshipping – even if you’re a small business with no real contacts.

What is dropshipping?

Dropshipping refers to orders that have been taken by one company and then passed on to the company that actually fulfills the order. Let’s say, for example, I wanted to sell top of the line audio equipment from a business that I’m running online. Normally I would have to contact a distributor, get in a shipment of the products, and then try to sell the stock that I have through my website.

Dropshipping cuts out a large section of that business model. What my business would now do is to take the order, send it and the money through to the distributor/manufacturer, and include the buyers name so that the goods can be sent directly to them.

How do I make my money doing it this way? I simply charge the buyer the amount of percentage that I want for the sale on top of the cost it would be for me to buy it from the distributor. Postage is usually charged as an extra. This means that I could find a product that may be 40% cheaper than it is in the shops, add 10% commission, and still save the buyer 30% over the retail price.

How can this potentially save your business?

Well, there are two ways, so it comes down to whether you’re producing products, or acting as a retailer.

If you want to sell top of the range products you no longer have to have them sitting in a warehouse. That means that you won’t be overstocked, and paying for storage, or buying in bulk and risking not selling what you have. You don’t have any problems with dealing with shipping or returns. Generally, you’re going to save money.

If you produce your own products, you can benefit from these networks, too. Some of the networks work with smaller suppliers so can take advantage of the huge numbers of people they have who are looking for new items to sell. Many of the sellers are working in niche markets, so your products may be just what they’re looking for.

How can you take advantage of one of these networks as either a retailer, or a manufacturer?

There are a number of networks out there, so you should be looking for one that caters for the products you want to buy, or sell. See what sort of items they carry, find out what sort of delivery times they have (essential as you don’t want customers coming back to you because they have been waiting too long for a delivery), and find out about the payment methods.

Another important thing is to make sure that items are in stock when people order them from you, so you need to have a way that you can check this out quickly.

If you’re selling you own product via one of the networks like shopster.com then you set your prices, receive, process, and track orders all in one place. You shouldn’t have to go out as a small manufacturer and struggle to find people willing to sell your products.

There we have, a way to reduce your costs, and potentially save your business no matter whether you’re selling or producing. Join a network, set up to either sell products or supply them, then connect with the people who are going to make a difference to your company.

Isn’t there a good chance that dropshipping can save your business?

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{ 4 comments… read them below or add one }

Terry Ramirez November 27, 2011 at 4:14 pm

Thanks-a-mundo for the blog post.Thanks Again. Keep writing.

Louise Patterson December 1, 2011 at 12:38 am

Fantastic article.Really thank you! Awesome.

Eugene Boyd December 15, 2011 at 7:56 am

Very neat article post.Really thank you! Keep writing.

Jessica Porter December 15, 2011 at 11:04 am

“Wow, great blog.Really looking forward to read more.”

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