- This is a … box…commonly used by wholesale dropshippers.
Drop-shipping is a term to describe is a type of retail business model. In this model stock is not held by the home based small business. When an order is made, the order and shipment details are passed to the manufacturer or authorized wholesale dropshipper, who will then send the goods to the customer directly. If a blind wholesale dropshipper is used, the goods will arrive under the retailers name only, sans information of the wholesale dropshipper. It is therefore suitable for home business newbies who have low start up capital and who do not intend to hold inventory. It is not surprising that many home business owners have included drop-shipping in their home based business plan.
Engaging a wholesale product dropshipper has its advantages an disadvantages to oa home based small business. The main advantage is of course the possibility of not carrying any stock and thus saving on space or rent of space, and on insurance for the space and the goods itself. This will also result in savings on manpower needed to store, pack and transport the goods. Furthermore, the issue of overstocking and then getting rid of excess stock at very low or no profit, or even at a loss would not arise.
The home business newbie need not worry about product catalogs and the countless numbers of product shots that are contained within. All the research would be carried out by the drop-shipper and the seller need only focus on how to market the product.
Wholesale product dropshippers do not require an MOQ (minimum order quantity) which means it is not necessary to sell in bulk.
In terms of payment, it need only be made after a confirmed order has been received. Some wholesale dropshippers even offer an additional 30 days interest free credit period.
The main disadvantage of engaging a wholesale dropshipper is that shipment is 100% wholesaler dependent. Some wholesale dropshippers have inefficient inventory and distribution systems and this will affect the home based small business owner directly.
Profit margins are effected by fluctuations in wholesale pricing especially for price sensitive products like computers and other electronics products such as cell phones. Smaller wholesale dropshipping companies have lower economies of scale and may not offer competitive pricing.
Some wholesale dropshippers have customer support services that leave a lot to be desired. This may result in customer dissatisfaction and even return of goods which will inevitably lead to lower revenue. The sellers reputation will also undoubtedly be affected.
Suffice to say, it is imperative that start ups and home business owners associate with wholesale dropshippers which are reputable and reliable which will go a long way in establishing the sellers reputation.
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Brad Keet is an entrepreneur and Internet junky. Brad invites you to journey with him as he dishes out home business startup tips and other home based small business information. For more of Brad’s take on things, log on to www.fromhomeeveryday.com
Tags
Getting started, Home biz guide ropes
Tags: Getting started, home based business plan, Home biz guide ropes, home business newbie, home business startup tips, home business venture, small home based business opportunity, wholesale dropshipper, wholesale dropshippers, wholesale product dropshipper, wholesale product dropshippers
Dropshipping only works if you do it right…
nice blog, thanks
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