Drop shipping is a fairly simple concept, but often difficult to pull together. The concept is that you would build an ecommerce website, load the cart up with all of your suppliers’ items, and you are open for business. Someone places an order on the site, pays for it, and the shipping via credit card. You get confirmation that someone has placed an order on your site, usually via e-mail. Once you have confirmed that the payment was actually received, you would go to your supplier, and place the order on your customer’s behalf. You pay the supplier the wholesale cost, and usually a small handling fee (after all, the supplier is warehousing the items for you), and you keep the difference between that and what the customer paid. The supplier usually has the ability to place your logo or store name on the invoice along with your contact information, so it looks just like it came from you to the customer.
This is a great business model for a home business because there is no inventory to keep track of. My 10 year old daughter can update the cart on our dropshipping t-shirt business – WalkingTestimony.com with no trouble at all.
The site is powered by a shopping cart produced by ecommercetemplates.com that I have found to be exceptional both in performance and the service when trying to troubleshoot a problem within the cart. It is really flexible for couponing and other nice features. More on the cart later – back to the subject at hand.
One of the drawbacks to drop shipping can sometimes be the return process. What I do is get the returns myself, and then instead of sending them back to the company, I use them, give them away as a promo, or sell them on ebay.
The biggest difficulty I have found is getting the word out about the products, and promoting the site…traffic is never easy to come by, and that is where you will find yourself spending the most time.
This is kind of a crash course in the drop shipping concept, but it can be profitable, challenging and rewarding all at the same time.