Drop shipping

What is drop shipping?

Drop shipping is a method for retailers in which they do not keep goods in stock but instead, they transfer customer orders and shipment to another retailer, a manufacturer or a wholesaler. These ones then ship the products directly to the customer.
The profit is made from the difference between your given price to customers and the obtained price from your provider.

Benefits

A big benefit for drop shipping is the elimination of the upfront inventory of products. You’ll use the wholesaler inventory so you will need to stay updated with him about the stocks.

Another benefit is the positive cash-flow cycle. The cash conversion cycle is a measure of liquidity risk entailed by the growth of the company.

Why positive? A positive cash flow will appear because when the purchase is made, the seller is paid.

A drop shipper can be considered as a middleman by preventing direct communication of the final buyer with the original seller.

How it works?

The model consists in a consumer that places an order with a retailer, which sends it to a supplier and then ships it to the customer.

Is drop shipping the path of overnight success? Maybe not, as any successful business you will need to invest over time in marketing, customer service and an updated website.
Drop shipping is a way to get started your own business without having to invest thousands. Give it a try and maybe you will build a successful business.