Drop Shipping

Buying items and selling them at a higher price than you paid for them is one of the most basic models for business. Drop shipping is a form of this business model where you have a customer pay for an item, and then you pass along the customer’s details to a manufacturer who then ships the item directly to the customer. You are paid whatever price the customer pays you, and you pay the manufacturer the wholesale cost of the item being sold.

Advantages of the Drop Shipping Model

Because of the structure of drop shipping, there are a number of inherent advantages over other business models. First, you will usually start off in the business with a positive profit because you are paid first without having to invest in any merchandise. Additionally, you never have to allocate money or resources to managing an inventory because you don’t have an inventory to look after. With drop shipping, you can do business from almost anywhere that you have an Internet connection, meaning you aren’t ever going to be tied down to a single location because of your business. You’ll also be able to adjust the products you buy and sell according to changing marketing conditions more easily than a competitor who keeps an inventory since you’ll never be faced with selling items after their value has dropped.

How to Avoid Being Scammed

Drop shipping has a bad reputation in a lot of areas of the world because of a common scam. The scam involves paying for a bundle of information about drop shipping which you think you’ll be able to use to start your own drop shipping business. The problem is that you’re actually sold a list of suppliers who aren’t really going to be selling you merchandise at wholesale rates.

What happens because of this is that your costs for the items you’re selling are too high compared to the price people will pay for the items, so you aren’t able to turn a profit. Additionally, you may be asked to pay a monthly or yearly fee for being able to order from the list of suppliers you were sold. Because of how widespread this scam is in some areas of the world, you should do a lot of research into your suppliers and never pay a subscription fee for being able to buy from a supplier.

Pulling Ahead of the Pack With Your Research

The single most important factor that goes into having success with drop shipping is your research. First, you have to do market research to determine what items are in demand and how much they will sell for. Then you have to do product availability research to find suppliers who can drop ship the items in question.

When there is a gap between the amount you would have to pay for an item and the amount of money you can get for selling it, then you have a potential money-maker on your hands. It’s your job at this point to sell the item in small quantities to see if the results your research indicated were correct. If the item is profitable in small quantities, then you can move up to larger quantities, scaling up your profits in the process.

Managing Your Virtual Storefront

With all of the popular online auction sites on the Internet, you don’t need your own website to make money from home with drop shipping. Instead, you can just auction items on these online auction sites and then have them drop shipped to the winners of the auctions.

Even though it’s not necessary to have your own website that acts as a virtual storefront, you most certainly can use one if you’d like. Any method that gets visitors to a web page who want to buy an item you’re drop shipping is valid and can be profitable as long as the costs don’t exceed the amount of money you’re bringing in for selling of the item.

Drop Shipping Articles:

Techniques and Practical Adjustments for Using the Storefront Model for Drop Shipping

by WorkFromHomeJobs on July 11th, 2011

The typical store model is the most basic setup for buying and selling goods. What this consists of on a simplified level for shops on the Internet is a list of items available connected with some navigational structure on a website. However, if you’re going to use the storefront model with drop shipping, there are […]

The Advantages Drop Shipping Has Over Traditional Shop Models

by WorkFromHomeJobs on July 2nd, 2011

The regular model of a shop includes a lot of elements that a shop using drop shipping doesn’t require. Many of these elements have an effect of tying down a shop in the traditional style while limiting flexibility and increasing costs. Because shops that use drop shipping are lacking these limiting components, there are many […]

The Profit Formula: The Math Behind Drop Shipping Success

by WorkFromHomeJobs on June 29th, 2011

All business, both online and offline, requires at least a small amount of math. However, drop shipping requires analysis and market research that use specific skills in math. While these skills aren’t difficult to learn, a mastery of the ideas involved can only be achieved through practice and real-life application. If you want to work […]

How to Avoid Getting Scammed When Starting Your Drop Shipping Business

by WorkFromHomeJobs on June 16th, 2011

One of the negative sides of being associated with drop shipping is that the concept is sometimes associated with a few common scams based on taking advantage of people who are looking to work from home. Due to this, drop shipping has a bad reputation in some parts of the world because of how many […]

Making Money With Drop Shipping and Online Auctions

by WorkFromHomeJobs on June 11th, 2011

To make money from home with drop shipping, you need buyers for products at a price that makes you a profit. The main task that determines your profits as a drop shipper is finding such customers. Because of the variable nature of the prices paid for items in online auctions, it might not seem like […]

Making Money On The Internet With Drop Shipping

by WorkFromHomeJobs on June 8th, 2011

With today’s economy, many in the UK are looking for ways to make a good living from the comfort of their own homes. Starting up a drop shipping company has proven to be a great way for many to make a liveable income without putting in a normal 40 hour work week. As with any […]

Introduction to Drop Shipping As A Work From Home Business

by WorkFromHomeJobs on June 3rd, 2011

Wouldn’t you love to make a sizeable income in the UK by working from home? Perhaps, like many, you are nervous about starting an online business. It is true that many have fallen victims to scams on the internet, but starting a drop shipping company can be a great legitimate way to make money from […]