In simple terms, drop-shipping is when a retailer offers for sale some item(s), which he doesn't stock, but passes on the order to a manufacturer to fulfill and ship. In this way, a business owner can show items for sale but be spared the cost of manufacture, inventory and other costs of business such as shipping.
This gives you the illusion that the retailer is stocking and shipping everything, simply because when it comes to drop-shipping, the company who makes the product isn't relevant - this isn't like affiliate marketing where you represent another company.
This has been done quite successfully for years by such big names like Sears and Wal-Mart. But these days, drop-shipping is now gaining popularity among ordinary people who run their own Internet-based business.
For example, John Smith sells custom T-shirts. Not surprisingly, opening Jane's catalog or opening her website on your browser would display some of the most beautiful wedding gowns you have ever seen. A customer will choose and submit an order to John's Custom Ts. Jane would not be the one sending you the item - she would outsource the shipping to a drop-shipper, who would fulfill the order and get it to your address.
Jane knows nothing about the wedding gown that was just shipped, as she has never had it in her stocks, nor has she been responsible for manufacturing and shipping the product. He is the order taker, that's who he is. But should you fail to receive your order on time, or if it may be damaged, you may have to go straight to Jane - though this depends largely on the drop-shipping provider.
In our next example, put yourself in the shoes of a retailer who wants to sell a muscle building supplement - very popular in the market - but you don't quite know how to come up with the funds or resources to start the business. But with the help of research, you have found out that there are companies who can manufacture the product and take care of completing the orders. You would still have rights to the logo, the label and the name of the product, but through this means, called private label drop-shipping, the manufacturer will be the one processing your request.
Drop-shipping can be quite beneficial to you in more ways than one. This frees you up to focus more attention towards simply taking the orders and making sure you present your items well. Your forte would be marketing and sales - getting consumers to see your offerings. There's no hassles with hiring employees to maintain a large manufacturing concern.
As for the manufacturer, they can do what they specialize in doing, which is making the products while you take care of the business side. This is an extension of common sense business practices as you let others specialize and do the same on your end. There are more benefits that we can mention.
The days of entrepreneurs spending so much on overhead and watching these costs eat into their profits is over - they can now save through drop-shipping while taking care of what they should be taking care of - marketing their product to the public.
This gives you the illusion that the retailer is stocking and shipping everything, simply because when it comes to drop-shipping, the company who makes the product isn't relevant - this isn't like affiliate marketing where you represent another company.
This has been done quite successfully for years by such big names like Sears and Wal-Mart. But these days, drop-shipping is now gaining popularity among ordinary people who run their own Internet-based business.
For example, John Smith sells custom T-shirts. Not surprisingly, opening Jane's catalog or opening her website on your browser would display some of the most beautiful wedding gowns you have ever seen. A customer will choose and submit an order to John's Custom Ts. Jane would not be the one sending you the item - she would outsource the shipping to a drop-shipper, who would fulfill the order and get it to your address.
Jane knows nothing about the wedding gown that was just shipped, as she has never had it in her stocks, nor has she been responsible for manufacturing and shipping the product. He is the order taker, that's who he is. But should you fail to receive your order on time, or if it may be damaged, you may have to go straight to Jane - though this depends largely on the drop-shipping provider.
In our next example, put yourself in the shoes of a retailer who wants to sell a muscle building supplement - very popular in the market - but you don't quite know how to come up with the funds or resources to start the business. But with the help of research, you have found out that there are companies who can manufacture the product and take care of completing the orders. You would still have rights to the logo, the label and the name of the product, but through this means, called private label drop-shipping, the manufacturer will be the one processing your request.
Drop-shipping can be quite beneficial to you in more ways than one. This frees you up to focus more attention towards simply taking the orders and making sure you present your items well. Your forte would be marketing and sales - getting consumers to see your offerings. There's no hassles with hiring employees to maintain a large manufacturing concern.
As for the manufacturer, they can do what they specialize in doing, which is making the products while you take care of the business side. This is an extension of common sense business practices as you let others specialize and do the same on your end. There are more benefits that we can mention.
The days of entrepreneurs spending so much on overhead and watching these costs eat into their profits is over - they can now save through drop-shipping while taking care of what they should be taking care of - marketing their product to the public.
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