Drop Ship Source

Written by Kathleen Gagne
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Finding a Drop Ship Source

It sounds as if it would be obvious for online vendors to find a drop ship source on the Internet. In fact, there are hundreds of drop ship options advertised online through individual websites and in directories dedicated to bringing vendors and drop ship wholesalers together. The reasoning is simple; online vendors can experience a positive cash flow by minimizing or eliminating inventory costs and by waiting to order products for shipping until they have received payment from consumers.

In order for the system to work, the vendor must find one or more drop shipper sources for the types of products s/he wants to sell. The product line can depend on several factors such as a particular area of interest or expertise of the vendor. This can be an especially important factor if the vendor is an individual working out of a home. Some vendors establish their relationships with sources and then determine which products they want to sell based on the wholesaler's stock.

Why Should You Use a Drop Ship Source?

The most important reason to use a drop ship wholesaler is, of course, capital. Most new companies have very little capital with which to fund all of the segments of their business. An online sales venture requires some specific functions that are not especially necessary to off line retail outlets. For example, there are still off line retail stores operating without credit cards. Online, there is no option, unless the vendor wants to rely on snail mail for payments.

By establishing a cooperative relationship with a drop shipper, the vendor eliminates the need to have any inventory at all. The effects on a company's cash flow cannot be overstated. It becomes a process of doing business without owning anything to sell until it's already sold. The wholesaler benefits because there are so many new online businesses to purchase their products. The vendor benefits because of the positive cash flow generated when they can get payment before buying product.

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