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Successful eBay Business » eBay Drop Shipping » What is Drop Shipping

What is Drop Shipping

You may have heard the term drop shipping being used – it is even used on this site, but I have realised that I have not really explained it! So here is an explanation of drop shipping and how it can work for you and your successful eBay business.

Drop shipping is the term used when the product distributor, the company that distributes the product takes care of all of the shipping for you. Rather than you having to order products in bulk and store them then try and sell them, the stock remains with the distributor until you make a sale and then buy from them. They then pack up the product and send it to your customer with our company label on the box.

One of the big advantages of drop shipping for someone who is new to selling online is that there is little or no start up cost as you do not have to buy in products to stock which means that there is also virtually no risk involved. Another advantage of using drop shippers is that it removes one of the issues faced with online sellers – where will I store my items when I am waiting for them to be sold? There is no need to store them in your spare room or garage or hire a storage facility because the items are stored at the drop shippers warehouse.

However, there is also a drawback with drop shipping. It is a little bit more expensive drop shipping than buying in bulk as the drop shipper often adds
US$2 – US$5 onto the cost of the item so that they can cover their costs of processing the product. This means that in order to keep up and stay competitive in some of the high profile categories like electronics and clothing could be hard but it does not mean that you will not be able to make money drop shipping, it just means that finding a niche market is even more important.

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