Blinky
Owner
Many times I started writing about DropShipping-а. By having a great number of question, directed to me, I decided to give a little bit more information of what exactly is DropShipping. So, what is DropShipping? It is just a service. Service that 99% of the biggest manufactures in USA offer. But what does DropShipping means?
DropShipping is a service – the manufacturer of the product X packages and sends it to the client, but you make the sale. So, the package has your name on it. Most online stores on the Internet follow this model. And to make it clear I will give an example. You are building your site (mostly online store), that will offer many products. After that you make a connection with as many as you want manufacturers producing umbrellas and ask them do they provide the service DropShipping. If they do, will send you a catalog and a price list of all of the products that you are interested in. You insert the products you want on your web site. For umbrella XYZ, the manufacture gave the dropshipp price of $20 (this is not a wholesale price, the wholesale price is $15). You make your page on your web site for the given umbrella and put price, for example, $55. The client finds the page and the product, and decides to buy it for $55. You take this amount of money and send the order to your dropshipper (the manufacture or some specific department, that is responsible for the merchants like your). The dropshipper package the product and send it to the client giving your name. You pay the dropshipper $20 and the other - $35 is your profit. Cool, isn't it?
What are the main disadvantages of using DropShipping?
What are the main advantages of using DropShipping?
If you have more questions, please ask us below.
DropShipping is a service – the manufacturer of the product X packages and sends it to the client, but you make the sale. So, the package has your name on it. Most online stores on the Internet follow this model. And to make it clear I will give an example. You are building your site (mostly online store), that will offer many products. After that you make a connection with as many as you want manufacturers producing umbrellas and ask them do they provide the service DropShipping. If they do, will send you a catalog and a price list of all of the products that you are interested in. You insert the products you want on your web site. For umbrella XYZ, the manufacture gave the dropshipp price of $20 (this is not a wholesale price, the wholesale price is $15). You make your page on your web site for the given umbrella and put price, for example, $55. The client finds the page and the product, and decides to buy it for $55. You take this amount of money and send the order to your dropshipper (the manufacture or some specific department, that is responsible for the merchants like your). The dropshipper package the product and send it to the client giving your name. You pay the dropshipper $20 and the other - $35 is your profit. Cool, isn't it?
What are the main disadvantages of using DropShipping?
- You are take all the responsibility of the service your provide to your clients. If something goes wrong, you are the person who burns. Unlike affiliate programs, where you are not responsible for anything, except bringing traffic and sales.
- More work on building up the site and doing SEO.
- You have to provide direct contact - phone.
- Of course there is always an option, where the manufacture could sell the products you promote on your prices or even cheaper. In case, this happens, change the manufacture. Fortunately, in most cases the manufacture also put it profit of about 500-600%. We are talking about the end-point-customer, you can't sell the same product at the same price to clients and dealers. Rules are rules.
- Most dropshipping sites (your dealer site) have more than 200 product, so it's kind of hard work to update the site. You need to do it frequently. Unlike affiliate sites, where you not suppose to update every single page when the product is out of stock, no available colors, sizes..., prices and many more.
- You can not begin without investing some money. You need a stable amount. Starting an affiliate site, you need just a few bucks – hosting, domain, content.
What are the main advantages of using DropShipping?
- Profits. Comparing to affiliate program, you can make more money – you decide what will be your profit.
- Plenty of products. Basically, you can sell whatever you want. When you promote affiliate programs, you are choosing from their selection, while doing dropshipping, you just need to find the DropShipper and contact him, asking about the products.
- Flexible. You are the boss of your profits. You can change prices, give discounts and more. There is no fixed prices. Some sites have 400-500% margin for its owner. (Example: manufacture sells product X for $500 on his site. You sells the same product at price of $200, because the manufacture provide it to you for $120. That way you earn $80 and guess who does the client choose – from you for $200 or $500 from the manufacture.
If you have more questions, please ask us below.