How Drop Shipping Works
With drop shipping, you work with a wholesaler or distributor that offers this service. Not all manufacturers and wholesalers offer drop shipping, but many do.
You handle all the marketing for your business. This means that you set up your website with a shopping cart (or set up a virtual storefront on Amazon), write your blog, do social media and email marketing, and any other way you can contact your prospects and customers. You will tell them all about the products and use your selling skills to tell them how the products will enhance their lives. Essentially, you do all of the marketing, advertising, and promotion to get the customers and make the sale.
When it comes time to actually send out the product and fulfill it, this is where the drop shipper takes over. The drop-ship company has the inventory in its warehouse. You send your dropshipper the orders that come in, paying the wholesale price for each order.
This can be done by email, submitted online, or through a spreadsheet file—it depends on the drop shipper. The dropshipping company puts the order together and ships it directly to your customer, without including any pricing details or information about the supplier, so that the customer thinks the package came directly from you..
Drop-ship companies do charge a fee for this service. Each company is different, but usually, it’s about $2 to $5 per item or order, and is often called a handling fee or a dropship fee. That’s on top of the wholesale price for the product itself and the cost of shipping, which does add up.
However, you can still make a profit as a drop shipping business, despite the thinner margins. If you want to increase your profits you can raise your prices—at least as much as your market will bear. You can also sell more volume. And you can always contact your drop shipper to negotiate a lower handling fee.
Remember though, that you aren’t risking your money upfront. You are only paying these fees if you actually sell a product.
With drop shipping, you work with a wholesaler or distributor that offers this service. Not all manufacturers and wholesalers offer drop shipping, but many do.
You handle all the marketing for your business. This means that you set up your website with a shopping cart (or set up a virtual storefront on Amazon), write your blog, do social media and email marketing, and any other way you can contact your prospects and customers. You will tell them all about the products and use your selling skills to tell them how the products will enhance their lives. Essentially, you do all of the marketing, advertising, and promotion to get the customers and make the sale.
When it comes time to actually send out the product and fulfill it, this is where the drop shipper takes over. The drop-ship company has the inventory in its warehouse. You send your dropshipper the orders that come in, paying the wholesale price for each order.
This can be done by email, submitted online, or through a spreadsheet file—it depends on the drop shipper. The dropshipping company puts the order together and ships it directly to your customer, without including any pricing details or information about the supplier, so that the customer thinks the package came directly from you..
Drop-ship companies do charge a fee for this service. Each company is different, but usually, it’s about $2 to $5 per item or order, and is often called a handling fee or a dropship fee. That’s on top of the wholesale price for the product itself and the cost of shipping, which does add up.
However, you can still make a profit as a drop shipping business, despite the thinner margins. If you want to increase your profits you can raise your prices—at least as much as your market will bear. You can also sell more volume. And you can always contact your drop shipper to negotiate a lower handling fee.
Remember though, that you aren’t risking your money upfront. You are only paying these fees if you actually sell a product.
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