Drop Ship

Written by Ava Grzegorczyk
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How Can Drop Ship Help You?

If you think of the sales process as a chain, you will understand where drop ship fits in to make your Internet business a success. As you probably already know, supporting a substantial inventory is needed to meet customer orders and to insure that you have a variety of products to sell. Inventory is, however, a very expensive proposition, especially if a particular product doesn't sell.

In the past, major retailers devised a system in which they offered a reasonable guarantee of volume sales to a manufacturer. The manufacturer then kept the stock at his warehouse, absorbing the costs of storage and insurance, and accepting the risk that the products might not sell. When the retailer got an order, s/he notified the manufacturer who then shipped the product directly to the consumer. Both the manufacturer and the retailer benefited from this process.

Internet Vendors and Drop Ship

In order to become an Internet entrepreneur, you have to have a product to sell. That means you have to either manufacture them yourself or establish a contract with a manufacturer. If you plan to sell a line of products, that could mean establishing contracts with multiple manufacturers. That increases your administrative costs.

You also have the option of working with an online wholesaler who will provide you with a wide range of products and who will also offer drop ship services. They can do this by contracting with multiple manufacturers and offering those manufacturers the volume that comes with supporting multiple online vendors. When an order comes in to your website, all you have to do is to notify either the middleman or the manufacturer, and the product will be on its way.

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