What is dropshipping?

I’ve just started buying wholesale clothing and have come across offers for dropshipping. Although I have tried to research this on my own, the explanations I have found are complicated. Can anyone explain dropshipping in a straightforward way to me?

Dropshipping is service where you sell goods without ever seeing the goods. In other words, you accept payment from a buyer for goods, and then the wholesaler or other third party distributor sends those goods to the buyer in your stead.

The wholesaler or manufacturer blind ships the products to your customer, meaning that they will not include their name or logo on the packaging.

You make a profit by selling goods at retail prices, while only paying wholesale prices yourself. You get to keep the difference. Wholesalers offer dropshipping services because it helps increase sales.

What are the advantages and disadvantages of using a dropshipper?

Using a dropshipping service is advantageous for small retailers, Internet-only stores and retailers who are catalogue-based. These businesses do not need to spend money on stocking merchandise when they dropship.

A disadvantage of using a dropshipping service is that you are putting your business in another company’s hands. Any customer service problems with the dropshipping will reflect on your company. Also, shipping takes longer than normal when you dropship; the customer places an order with you, you place an order with the dropshipper, and the dropshipper processes the order. This can add one to three extra shipping days. Be sure you include this delay in your shipping disclaimer.

How can I find a reliable dropshipper?

There are many reliable dropshippers, but if you are just starting out, I would recommend only using dropshippers that you have researched as thoroughly as possible. Call them, email them – visit their facility if possible. Make sure they’re completely above-board.

Here are a few other tips you can use in your search for a dropshipper:

● Stay away from dropshippers who don’t have a Tax ID number or a valid physical address.
● Only use a dropshipper who uses a traceable carrier service such as FedEx or UPS.
● Make sure the dropshipper has valid references that you can contact and talk to.

When you do choose a dropshipper, make sure you are in constant communication with them. You need to be aware when its stock is low or gone on certain products so you can warn your customers. They should have an XML script for your website that updates as they gain and lose stock. Speak with your potential dropshipper to make sure they have this option. If they don’t, you should look at someone who does in order to avoid any conflicts with customer orders.

It's quite new for me to read about dropshipping, but it is really interesting though. :)