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What is the meaning of Dropshipping? Concept, Definition of Dropshipping

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Definition of Dropshipping



1 Meaning of Dropshipping

Drop shipping, Dropshipping or Drop shipment is a type of sale to the retail where the retailer does not keep the goods in its inventory, but instead passes the customer order and details shipping wholesaler, who then shipped the goods directly to customer. The retailer gets their profit on the difference between the wholesale price and the price retailer.
Some retailers will display items in stores, so that customers can inspect a unit similar to that which they can buy. Other retailers will only provide a catalogue or online presence.
Drop Shipping can occur when a retailer (who typically sells in small quantities to the general public) receive a single order of many units of product. Instead of direct distribution through the store retailer, the retailer agreed that goods are directly sent to the buyer.
The bookselling industry is an example. Shops retailers of books normally sell a single copy of a book to the customer. But a store may receive an order from, for example, 50 copies of a book of a company that wants to buy these books for their employees, customers or shareholders. The Bookseller will agree (editorial) wholesale supply books directly to the company.
Drop Shipping is one of the most used by retailers on eBay.

Operation

For Drop Shipping will be specialized companies that have their own products so that virtual stores offer to their audience. Its mission will be to buy the products, store, package them and send them under the name of the shop, also will handle returns.
As for the shop it will own the database of customers and who will be billed for them. This must be constantly checking the availability of products as well as their delivery times.

2. Definition of Dropshipping

What is Dropshipping?

It is a method of sale that is currently being used to make money on the Internet, in which you act as an intermediary between the manufacturer of the product (Dropshipper) and the person interested in buying it.
You don't need to have product to sell, your task is to get to sell items you consider in demand. To do this you can offer them on your website, in your store or far can your imagination. This means that you do not use a physical storage space and you can offer countless items of all sizes and in all over the world, generating you a shower of money. In addition you will have the security elements will always be in good condition because the producer will be responsible for all the work that this entails.
Manufacturer (Dropshipper) will give you two prices for the product: the lower price that you'll buy it, and the wholesale price that you sell it to the public. The difference between the two, will be your gain.
To request the item to your Dropshipper, your customer will have to crediting it to you first, and then buy it for the lowest price and keep your profit.
When you use Dropshipping (sell without having the product) must be taken into account that the delivery period can take up to 60 days, and is a point that you clarify your client rather than send you the money.
Manufacturer is responsible for the entire process of shipping to get the item to your customer, your group of professionals will carry out this task. At the time of the address of you sent, you must enter that corresponds to your client, so that the product arrives at his home, not yours.
Your buyer will never know your supplier, you will only have to you as your reference. This is the wonderful thing about Dropshipping, you can forge a reputation making money with the sale of other products.

Advantages and disadvantages of Dropshipping

Advantages of DropShipping:

1) Not an investment is required: there are dropshippers that don't charge money for the subscription; Although there are others Yes, but the fee is very low (round between 50 and 100 dollars) and you can retrieve it with few sales, also offers far more benefits than the free.
(2) Do not use physical space: because the products are the care and safety of the manufacturers.
(3) Do not have a limit of time or quantity on sales: you can sell only 1 item or 100.
(4) Sales around the world: you have the possibility of offering products in your region or in many countries, although I recommend that you use the second option to earn more money.
(5) Shipments organized by the manufacturers: the only thing you have to do is enter your customer data.
(6) Multiple dropshippers: there are no working with several manufacturers at the same time, even if they are of different items (jewelry, sport, clothing, etc).

Disadvantages of DropShipping:

1) It is is not accepted in some places: mainly those of buying and selling, auction and classified, because they require that the offered product is physically in stock.
(2) Possess little information product: as you do not have it in your power, you will not know the functional characteristics of the article. It is advisable, to the extent possible, purchase the product first, try and sell it; Or forward the questions from your customers to your dropshippers and reply to your customers as they are responding to manufacturers.
(3) You are solely responsible for: like you lights to sales, also will have to expose you to the erroneous actions of your dropshippers (lack of merchandise, wrong shipments, late deliveries, etc.). You will have to offer apologies to your client and give you an assertive solution to the drawbacks.
(4) Customs retention: there are countries (usually Latin) that have a strong customs policy, where is come to pay up to 50% of the value of the product by its entry in the country. Some entrepreneurs ask them their dropshippers that items are shipped as a gift and not as a sales. The problem here, is that you can only import elements of a one at a time.

Dropshipping is the new sales system to make money. As every enterprise has its pro and cons. It is a little study to familiarize yourself better and get rid of the fears.

3 Concept of Dropshipping

Dropshipping or Dropshipping is a management technique of the supply chain in which the retailer does not maintain goods in stock, but it transfers customer orders and shipping details to the manufacturer or a wholesaler, who then ship the goods directly to the customer. As in the retail business, most retailers obtain their profits from the difference between the selling price to the wholesale and the retail, but some retailers earn a percentage agreed sales on Commission, paid by the wholesaler retailer.

Procedure


Some retailers Dropshipping can keep "elements of the screen" on display in stores, so that customers can inspect an item similar to those you can buy. Other retailers may only provide a catalogue or website of their products.

Retailers that trade goods from wholesalers may take measures to hide this fact to avoid any stigma, or to maintain supply to the wholesale of being widely known. This can be done by "send blind" (shipping merchandise without a return address), or "private shipping label" (after submitting the goods to the wholesaler with an address of custom shop). A sheet of custom also packaging can be included by the wholesaler, indicating the name of the retail company, logo and contact information.

The small business


Dropshipping can occur when a small trader who usually sold in small quantities to the public in general receives a single large order for a product. Instead of direct shipment through the store retailer, the retailer available goods that are sent directly to the client. Dropshipping is also very common in articles of high price, as steel buildings where the retailer will take a deposit and the building directly sent to work by the purchaser to the supplier manufacturing facilities.

Auctions online


Many sites online, like eBay auctions, sellers also drop ship. Often, a vendor selling an item as new and ship the item directly to the retailer or wholesaler to the highest bidder. Earnings from the seller of the difference between the winning offer and the price to the wholesale, less any sale and commercial commissions from the auction site.

Customized products


A new trend in business is the transport of goods by private account, in which a manufacturer produces an element for a retailer and then sent it. The range of products of the dropshipper private sent varies from simple keychains and t-shirts with custom logos or photos to the tailor made formulations for vitamins and nutritional supplements.

Developments


Leading supplier of Dropshipping and fulfillment services are based mainly in the United States.UU...

Since 2006 many dropshipping companies have emerged in China, many of which offer shipping services to the wholesale and drop to companies and individuals. This is mainly due to the increasing ease of most Internet plays in e-commerce and e-procurement. With China-based suppliers of the dropshipper have been increasingly able to compete with people from the same country distributors due to the improvement of the logistics for small packages and relaxation of trade barriers.

Benefits


Two significant benefits of Dropshipping are the Elimination of initial stocks and a positive cash flow cycle. A positive cash flow cycle is because the seller pays you when you make the purchase. The seller usually pays the wholesaler with credit card or credit terms. Therefore, there is a period of time in which the seller has the customer money, but has not yet paid the wholesaler.

Dropshipping also eliminates the duplication of efforts, since only a warehouse pick, Pack and ship the product. This approach can reduce total inventory management and shipping costs. These cost reductions can then reduce the price to the consumer.

Risks


As in any business, some risks are involved in the sending of the descent. For example, Backordering can occur when a seller places a request for shipping with a wholesaler, but the product is out of stock. Backordering can be accompanied by a long wait for a shipment while the wholesaler waiting for new products, which may reflect negatively on the retailer. A good dealer will keep retailers updated, but it is the work of the owner of the company to be aware of the quantities that the wholesaler has available.

Dropshipping has also occupied a prominent place in some Internet home-based business scams. Scammers will promote Dropshipping as a lucrative "work from home opportunity." The victim who buy into this scam will be sold a list of shipping companies of abandonment which orders can be placed. These businesses may not be wholesalers, but other businesses or persons who act as middlemen between retailers and wholesalers, no product to sell. These middlemen often charge prices that leave little profit margin for the victim, and require a fee regulation for the use of its services retailers.

Related concepts


The opposite of Dropshipping are gonna call, when a customer collects directly to a wholesaler, rather than through a store to the retail.

The affiliate marketing can also be compared to Dropshipping. As with Dropshipping, affiliate marketing allows a web site to list an item for sale that is not in the hand, but is sent through a third party.

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