by: Jim Staley
If the irritations of returns, shipping, receiving, handling and inventory are taking over your online business, switching to dropshippers can be a cost effective, sanity-saving light at the end of the tunnel.
Drop shippers are merely companies (usually wholesalers, distributors or manufacturers) who ship directly to your customer for you, saving you the time, fees and office space of acting as the middle man in a buy-sell arrangement. In a nutshell, this means that you can offer a wide variety of products at your website without carrying any stock in-house.
Ideally, dropshippers receive an email from you whenever one of your customers wants to purchase something. For instance, Mrs. Jones wants to purchase an Italian charm bracelet from your website, and makes an order, using PayPal as her method of payment. The bracelet costs $37, plus $6 shipping, for a total of $41. Once you receive Mrs. Jones’ order, you email your dropshipper, advising them of the purchase, along with Mrs. Jones’ shipping information. You also forward on a payment of only $28 to the dropshipper. Since YOUR cost of the bracelet is only $16, and you’ve passed along the shipping costs of $6 to the customer, you’ve just made a $19 profit.
Dropshippers are an excellent alternative for smaller, home-based businesses especially who don’t need or have the space for inventory. Plus, if an item becomes obsolete or out-of-date, you have nothing to worry about since you aren’t carrying any inventory.
Once you’ve found a dropshipper to work with, research the following information closely before entering into an agreement with anyone:
o What is the dropshippers’ return policy? If they do not offer a guarantee, warranty or return policy, look elsewhere.oHow are you going to pay the dropshipper? Some companies offer direct, monthly billing, but most ask for a credit card payment up front.
o What shipping company does the dropshipper use? Do they offer any tracking for their packages? Are there handling fees as well, in addition to their shipping charges?oWhat is their complaint resolution policy, or do they even have one? What hours is their customer service department available?
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