What is Drop Shipping?
So, just what is drop shipping?
At Pure-Ecommerce, all of our internet businesses for sale are stocked with drop ship products, but what is drop shipping? Drop shipping is a supply chain management technique in which the retailer does not keep products in stock, but instead transfers customer orders and shipment details to the vendor, who then ships the goods directly to the customer. The website owner then makes their profit on the difference between the wholesale and retail price.
By holding a drop ship relationship with your vendors, this allows an ecommerce business owner the ability of not having to invest or carry any product inventory. The drop ship order process is simple and can save a business owner a lot of time and energy since you don't have to focus on holding inventory or shipping product to your customer.
It is simple - when you receive an order on your website you simply send the order information directly to the vendor to process for you. The vendor then fulfills the order and ships the product directly to your customer. You never have to touch or manage inventory, nor do you have to make the often large, initial investment into inventory to start your business.
How Do You Make Money with Drop Shipping?
The vendor charges you the wholesale price and you charge the customer the retail price. Your margin is the difference between these two numbers. We choose vendors who have margins of 35% and higher. Once the order ships to your customer, the vendor will charge your business credit card on file. The customer has already paid you directly for the product ordered and shipping, so you profit from the difference between what your customer paid and what your vendor charged you.
Are There Fees in Drop Shipping?
It certainly depends on the vendor. Some vendors do charge you a drop ship fee while some vendors do not charge you a fee to market their products for them. The fees vary depending on the product offering and the vendor. You can work the fee into your product price if you desire.
Where Do the Items Ship From?
Pure-Ecommerce only works with vendors that drop ship directly from America or Canada. When working with a drop ship vendor you can ask them directly where their products ship from, the normal processing time and their overall ordering process.
Are There Issues with Drop Shipping?
Pure-Ecommerce works with vendors that happen to offer drop shipping as a part of their business model. They also offer their products to departmenet stores and boutiques across the US. They just happen to also offer drop shipping, since it's a model that makes sense for their particular business.
To be able to receive drop shipping from a reputable company is a privilege and not all companies offer drop shipping. The companies we choose to work with are mid to high end professional branded companies.
What are the Benefits of Owning a Drop Ship Business?
The two biggest benifits to drop shipping are simple and quite clear:
- Drop shipping allows you to start an ecommerce business with minimal investment and risk.
- Drop shipping allows you to not have to worry about shipping inventory, therefore, you can focus your time on your own business with marketing and search engine optimization.
