US Drop Ship companies that are reliable are hard to find. To help demystify the science of drop-shipping, authors Jeremy Hanks, Nichole Haims and Brandon Williams co-wrote the book ‘Drop Shipping 4Dumbies’. In it, they explain the basic steps of starting a drop shipping business and how to make it successful. Hereafter, we shall outline some of the general concepts to drop shipping.
In the normal wholesale and retail business, the wholesaler buys goods in bulk and sells them to the retailer. From his storefront, the retailer then resells the product to the customer. The basic idea in drop-shopping is that the drop-shipper buys the product in bulk and then sells it to the retailer, who in turn sells it to the customer. The difference in drop-shipping is that the retailer does not store the product in his store. The retailer is basically ‘stockless’. He simply collects the payment from the consumer then places an order with the drop shipper who then delivers the goods directly to the consumer. This means that the retailer is saved the trouble of making an inventory. He only needs to ‘show’ his product on his website and send the customer’s order and location to the drop shipper.
For the retailer, having another company ship the product is and economical way to do business. As is cited in the book ‘Drop Shipping 4Dumbies’, ‘Using a drop ship model is an excellent idea if you don’t have a lot of capital to start with.” The cost of rent, labour, shipping and the building lease is eliminated. On the other hand, drop shipping is more expensive for the drop shipper as he incurs the added cost of shipping.
One major disadvantage with having another company be in charge of the merchandise is back ordering. This occurs when the item that was paid for is out of stock and the customer has to wait until it is in stock. This reflects badly on the retailer as the customer has already paid for the product but cannot access it as was agreed.
Another disadvantage is that the retailer will not get a good deal as the orders are made individually and not in bulk. Also, the retailer cannot control packaging of the product which could significantly boost his business.
Private label drop shipping is the latest trend in the eCommerce line of business. A manufacturer makes a specially designed item as instructed by the retailer then drop ships it to the consumer. Such items include custom-made tshirts and special combinations of nutritional supplements.
Finally, as pointed out by Jeremy Hanks, co-author of ‘Drop Shipping 4Dumbies’, “Drop shipping, which was first popularized by Amazon.com and other large-scale multichannel retailers, used to be off limits to small businesses.”Fortunately, with the aid of technological advances, this business model can now be taken up by small-scale retailers who work from the convenience of their homes. All they need to do is advertise to potential customers via the web, which has rapidly become a ‘shopper’s paradise’.
If you want to learn concepts taught in this book for free, and want to find US Drop Ship suppliers read below.