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How Drop Shipping Works

by John Lynch

One of the most frequently asked questions on the Net is: "What should I sell online?"

Many people know what products they want to sell. However, they don't know how to do this. Should they physically stock the products themselves or promote other companies through affiliate programs?

Drop shipping may be the answer for some website owners who want to become stockless retailers, whereby they keep no stock themselves. Instead they promote products on their website and get a drop shipping company to despatch these products for them.

Here are the steps involved in drop shipping:

1) You open an Internet Store with a shopping cart and accept credit cards on your site. You can also sell on Internet Auction sites.

2) You find a distributor who will "drop ship" the products you want to sell.

3) You open an account with the "drop ship" distributor(s) you choose.

4) You receive descriptions and images of the products you wish to sell from the distributor and put them on your Internet Store or Auction.

5) When a customer buys from your Store or Auction, they pay with their credit card. Your Store or Auction charges their credit card plus shipping.

6) You e-mail the order to the drop ship distributor with the customer's name and address.

7) Then the drop shipper despatches the product to your customer from the warehouse with YOUR business name on the package.

8) The drop shipper charges you the wholesale price plus shipping. Remember you have already passed the shipping charge on to your customer, so the shipping costs you nothing.

So that's how drop shipping works. You don't have to buy products in bulk and store them, hoping to sell. You don't have to pay to have it shipped to you, and then pay again to ship it to your customer. All you had to do was send an e-mail to your drop shipper.

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