Drop shipping works like this:
1) Retailer sells item to customer.
2) Retailer buys item from supplier.
3) Supplier ships item directly to customer.
This can be quite an advantage to the retailer - the retailer never
has to stock the item, and only pays once for shipping. All the
retailer has to do is move money around. And sell, of course.
There are some drawbacks, however. The supplier has to be set up for
many small shipments instead of a few large shipments. If there is a
problem with the item, the customer has a hard time getting support
from the retailer (if any support is possible!) And it is harder for
the retailer to develop a long term relationship with the customer.
Perhaps the worst drawback to the retailer is that it's very hard to
differentiate his business from all the others that are drop shipping
with the same supplier.
It's usually very easy to sign up with a drop shipper. On the other
hand, I've found it hard to build a "business relationship" -
regardless of how many sales you generate, you're not buying in bulk,
so you usually can't obtain any volume discounts or any other
advantage over your competitors.
Personally, I prefer being a stocking dealer. True, my costs are
higher, but I find it easier to develop relationships with both my
customers and my suppliers. From the suppliers I can get volume
discounts and marketing assistance, and I can add little extras to the
packages I ship to customers that help keep them coming back.
I hope this helps answer your questions!
Kurt Schweitzer
Urban Village Scooters
http://urbanvillagescooters.com
--- In entrepreneursathome@yahoogroups.com, "John & Ginny Mills"
<jgmills@...> wrote:
>
> I read somewhere that you should never have to pay to get information
> about various drop shippers and that if someone asked you to pay for
> the information, you were getting ripped off. On the other hand, I
> really need a good tutorial about how drop shipping works, how to find
> the best drop shippers to meet me needs, and how to build a business
> relationship with a drop shipper when you're just getting started. Any
> recommendations?
>
> Thanks in advance,
> Ginny in Mexico
>
------------------------------------
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