There are over 37 Million Websites that attempts to answer the question “What is Drop-Shipping“. This title, “What is Dropshipping” is really not something I thought I would even want to entertain talking about.
I really feel like a “Pea Brain” in an “Ocean of Skulls” with my rendition of this answer, simply based on the 37 Million plus Websites. But you know what? After going through some of the pages, I realize that they don’t know everything and right now, you want the answer from me… So I’m gonna give you the best answer I can give you. Lets’ go!
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My Personal Explanation of Drop-Shipping
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- Drop-Shipping is when you offer a product for sale. A product that you do not hold Inventory yourself nor have you yet purchased this product.
- Once you receive a payment from a Buyer, for that item, you would then take part of what you’ve received (the money), and purchase this item from “Your Supplier” (The Drop-Shipper).
- When you make the purchase from “Your Supplier“, you have to let them know that this is a “Drop-Ship Item“.
- So when “Your Supplier” ships the item to Your Buyer, you do not want Your Buyer to know where the item came from (This is called Blind Shipping). Also ask them not to include any “Sales Material” or You can have them send the Invoices to you, while the item goes to your Buyer.
- Your Buyer would then receive the item as promised and all is well.
The money you would make from doing this, would be from your “Markup or Profit“. For example – Your Drop-Shipper has a product that you can buy for $60. You offer and sell it for $150. Your profit would be $90 minus your expenses.
Easy Money
Again, you stored no Inventory and you didn’t even make the purchase until you already made a sale and collected the funds, on your end. The only real thing that you have to do when selling items via the “Drop-Ship Method“, is to advertise. Well, that’s my simple answer. Let me show you a few other answers that I found. With over 37 Million Websites talking about “What is Drop-Shipping”, some of them are bound to provide more or less, information that I’m providing to you here today.
Others that Speak on the Subject of “What is Drop-Shipping”
Wikipedia – Drop-Shipping is a supply chain management method in which the retailer does not keep goods in stock but instead transfers the customer orders and shipment details to either the manufacturer, another retailer, or a Wholesaler, who then ships the goods directly to the customer.
As in retail business, the majority of retailers make their profit on the difference between the wholesale and retail price, but some retailers earn an agreed percentage of the sales in commission, paid by the wholesaler to the retailer.
Oberlo – Oberlo gives a lot of “Fluff” when answering this question. I’ll do my best to keep things in order. Okay, here it is;
Dropshipping is a business model that allows entrepreneurs to sell products to their customers without ever actually stocking the items themselves. The benefit of not carrying any inventory? You can concentrate more on the important things – bringing in new customers. In its’ simplest terms, once a dropshipper sells a product they will buy it from their supplier, who will ship it directly to their customer.
Shopify – Dropshipping is a retail fulfillment method where a store doesn’t keep the products it sells in stock. Instead, when a store sells a product, it purchases the item from a third party and has it shipped directly to the customer. As a result, the merchant never sees or handles the product. The biggest difference between dropshipping and the standard retail model is that the selling merchant doesn’t stock or own inventory. Instead, the merchant purchases inventory as needed from a third party – usually a wholesaler or manufacturer – to fulfill orders.
Last but not the Least
Worldwidebrands – Drop-Shipping is not a new term, it has been around for quite some time. But there are also misconceptions on what Drop-Shipping really is. We know Drop-Shipping and we understand it. We have been dealing with thousands of legitimate drop ship suppliers for years.
So, the question, what is drop shipping? Let’s start with terminology. We hear many people state they want to dropship and become a drop ship business. This is wrong! They really mean that they want to be a retailer that uses drop ship suppliers. Drop-Shipping is a service offered by (some, not all) Wholesalers. When you use a Wholesaler who offers Drop-Shipping you don’t have to worry about stocking or shipping products.
Instead, when you get an order from a customer, you contact your wholesaler and they ship it to your customer for you. This means you, as a retailer, can sell a variety of products without ever having to stock any inventory whatsoever. This makes Drop-Shipping very appealing for new, small, home-based online businesses.
In Conclusion
To simplify, here is my simpler answer to the question of “What is Drop-Shipping“. Drop-Shipping is a “Three Party Component Transaction” (ABC). You firstly sell products to “C“. Once payment is made, you take the proceeds and purchase the items from “A“. “A” will ship the item to “C” on your behalf. The difference between the Dollar amount received and what was paid out…. is your profit.
So there you have it. Keep it simple, take your time and learn as you go.
I hope this post on “WHAT IS DROP-SHIPPING”, has pointed you into the right direction!
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