Dropshipping

The Basic Guide To Dropshipping

There is a general perception that dropshipping is a new marketing method. Nothing could be further from the truth. It’s been going on for quite some time and will only grow as the Internet continues to expand.

Chances are you or your parents at one time had something dropshipped long before you heard the term. Possibly an item at a major department or speciality store that they did not have in stock at the time. Or an item at a hardware or lawn and garden centre that had to be ordered. For the convenience of all, they had it sent direct to your home or place of business. The seller did not have the item in stock, but made arrangements for it to be shipped directly to the buyer, who paid the seller and waited for the delivery of the product.

That’s dropshipping. The buyer pays the seller for a “not in stock” product to be delivered directly to the buyer by the wholesaler, importer or manufacturer. It could be a rug ordered from a sample, an appliance in a color the seller does not stock, but is available from the factory, some floor mats for the family sedan that the local store does not keep on their shelves, etc.

Notice to this point no mention has been made of dropshipping on the Internet. Before going there, some background on dropshipping in general was necessary to show this is not an “Internet Only” marketing method and that it has been going on for decades.

In the US there are companies who have been built around dropshipping for 50 years or more. The dealers write the order and collect the payment, then pass the order on to the dropshipper who ships the order to the buyer using the dealer’s name and address on all documents.

That last part of the above sentence is critical to dropshipping. The dropshipper must make sure there is nothing included with the shipment, no matter if it’s one item or cartons of goods, that have a direct tie to the dropshipper. No sales literature, a packing list without their name showing, a shipping label with the dealer’s name and address as the shipper and no names on the shipping carton.

In addition, there must be a bond of trust that the dropshipper will not at some point or another directly contact the buyer, bypassing the dealer who initiated the first sale. One of the things that sets dropshipping apart from commission sales is that the customer “belongs” to the dealer when dropshipping, while the customer “belongs” to the company / shipper when the person taking the order is a  commissioned salesperson.

With the advent of the Internet, dropshipping took on a new face. Now there are thousands of dealers / sellers with virtual stores showing thousands of products and not a single physical item in stock. And many more offering products on Ebay and other auction sites worldwide.

And, of course, the largest dropship seller of all, Amazon, which was from the start a virtual store-front dependent on suppliers to dropship for them. Which, in turn, produced many more online virtual stores. In fact, many of the established dropshippers began to offer their own “turnkey” dropship websites to their current and prospective dealers.

The Internet also brought a new player to the game, the “middleman”. These people have set themselves up to appear as genuine dropshippers, seeming to have their own goods and shipping for dealers they attempt to have join with them, usually for a fee. In affect, they are simply “order gatherers” who get their subscribing “members” to sell at inflated prices and submit the orders to them.

The middlemen then pass the orders on to the real dropshippers and keep their profit from the inflated “wholesale” prices they charge those foolish enough to join with them. As a result their members are forced to offer their goods at an unusually high selling price, or cut their profits to the bone, either of which leaves the hapless dealer / member often paying dues for an opportunity that is virtually  worthless to them.

 

There are a number of trustworthy and dependable genuine “tier one” dropshippers available. To qualify as tier one they should:

• Hold their own inventory

• Have no minimum order amount

• Be willing to ship as little as one piece at a time, with no extra charges. (There may be a “small order fee” for items under a certain cost, this is normal with all wholesalers.)

• Ship “blind” with no reference to themselves

Should you decide dropshipping is for you, with some investigation, or investment in one of the several true, guaranteed dropship source directories, you can have a very profitable business with little investment.