Drop Shipping Wholesale Distributors: A Necessity for Some Businesses
Many home business entrepreneurs have been able to enter the business world through the use of drop shipping. What is drop shipping, you ask, and how has it turned many average Americans into full-fledged entrepreneurs? Drop shippers are in essence companies that provide you with your inventory. When you are a small business entrepreneur, just getting started, how can you possible offer your potential clientele a good selection of products? That is when you need drop shippers.
Potential Advantages
Drop shippers essentially allow you to eliminate the need of an expensive inventory. They allow you to launch your own web-based or home business without having to plunk down thousands of dollars just to get started. With the aid of drop shippers, you can operate your own business without having to worry about hiring and keeping employees, renting an expensive warehouse to keep all of your products stored safely in, and you don’t have to worry about established accounts with UPS and FedEx or other such carriers. Drop shippers have also become increasingly sophisticated, now you can offer potential customers well know and highly sought-after brand names, all from the comfort of your home computer.
Drop shippers may supply you with your entire product inventory and take care of the shipping, but it is still your business. When the drop ship distributors send off your merchandise to your customers, the products will be shipped directly to your customer with your business name on the package. So in essence, you are simply responsible for taking your customer’s orders, and then passing it on to the drop ship distributor. You may be wondering just how lucrative drop shipping is. Sure it sounds great and so easy, but what are the drawbacks.
Potential Disadvantages
The profit split works something like this: you (the business owner) get to keep the difference between the wholesale price that you were charged by the distributor, and the retail price that you charged the customer. One of the potential drawbacks of working with a drop ship distributor is that you don’t have much control over the inventory. Let us say that you have a great idea for a product or product line that you would like to offer your customer. You can’t very well do this when you work with a drop ship distributor. You are limited to their inventory. Pretty much what they have is what you have. This makes it difficult to respond quickly to customer demand or preference. You are tethered by what the drop ship distributor can do for you. Some people find this thought comforting—they don’t want to worry about inventory. Other people may find drop ship distribution limiting—they would like to offer their clientele more, but they simply can’t.
Another potential drawback of working with a drop ship distributor is that you must be very careful about who you choose to work with. For instance, let us say that you have found a drop ship distributor who carries the kind of products and product lines that you would like to offer your customers. Great! But what happens if the drop ship distributor you are working with turns out to be unreliable? Say that they do not ship as quickly as they initially promised, or their products are of low quality. In short, when you decide to go the drop ship distribution route, you have to be very careful about who you choose to work with. Even if the drop ship company is technically responsible for missed shipments or broken products, it is your name and your reputation that is printed on the box.
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