This is a technique for sales of goods that do not have available. When selling a product you connect with a producer or wholesale supplier and provide information for delivery. Then courier delivers the product directly to your customer. Profit is derived from the difference between the retail price and the price of one (manufacturer).
– Frequently drop-shiping apply to online sales and catalog sales. But not a few cases when customers visit a physical store or the so-called show rooms and view samples. So they actually see and touch what they will get.
Many world sites such as eBay and Amazon dropshiping techniques used in their online sales.
Eliminates the need for large inventories of goods. In traditional trade trader first purchased goods store it and then sell it. In dropshiping things happen back. The goods are first announced by the merchant, the customer sees it and buys only after which a trader buys from the supplier and sent to the client. Ever – increasing share of online sales due to drop-shiping principle.
The achievement of positive cash flow. In online selling on eBay, they enter the money in your account to pay pal. Under certain conditions, you can operate directly with the money. Then go to a wholesale supplier or manufacturer and pay the resulting product with more money. As I said – above the price difference remains, as your profit.
Eliminates the cost of packaging and shipping. The product does not need to come to you and then you send it to your customer. All of this is borne by the wholesaler or manufacturer. Even some retailers may offer free shipping for 2 days.