Definition
It is an arrangement in between the business and the distributor or manufacturer of the product the industry wished to sell wherein the distributor or the manufacturer and not a business will ship the goods to the business clients. If you have been interested in beginning with your personal internet business but you have attempted to shun the hassles of the things like producing and developing the products, tracking the inventory, setting up the warehouse space, and then maintaining a confusing receiving and shipping infrastructure, then, drop shipping can be the best answer that you have been waiting for. It will allow you to sell brand-name and quality products on your personal website for the hefty profit and while somebody else looks after the product development and the order fulfillment.
Even though the procedure may be a boon into the internet, entrepreneurs, you must know the disadvantages and advantages to the business model just before getting started.
First, what is the wholesale amount they can give you on the products? You will need to be sure the wholesale amount they are offering is low enough that you will be capable of generating the best profit from what you can be able to vend the products for. Second, are they charging the handling fee for the drop shipping and also how much? Lots of companies that are dropshipping will just add the amount of the UPS or the FedEx shipping to the wholesale price, but there are some that will also charge the handling fee that is normally in between a dollar or five dollars. It is for the offsetting of the cost of picking, processing and packing of the ordered items for you. Third, how are they are shipping the products? Almost all of the company that is, dropping the products may use the major global delivery service such as FedEx or UPS. You can inquire from them to include the tracking numbers with an order confirmation that they are sending. This may possibly save you lots of potential troubles when the customers ask you about their orders.
Fourth, how are they are billing you? Most of the drop shippers may bill the credit card with the wholesale amount of the goods plus the handling and the shipping fee the moment they have received the order from the customer. With the others, you can be able to arrange the cycle of the monthly bill where you submit the payments for all of the orders at the end of every month.
Fifth, how are they dealing with the product returns? Make sure to look out what the policy is with about the returns. Most of the reputable businesses will give some type of warranty or guarantee on the products and may deal with the returns of the customers. In this manner, if the customer contacted you with the return, you may simply tell them that the manufacturer may be happy to talk to them directly. If the manufacturer does not accept the returns, look out! You will be that one being stuck replacing the defective goods for your customers.
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Josh MadridJosh Madrid is a serial entrepreneur, marketing consultant, millennial thought leader & speaker. Josh is the host of The Dropout Degree, a podcast show top-ranked as one of the top 10 Business Podcast on iTunes. Archives
January 2020
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