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Drop Shipping: The Secret Your Online Business Needs to Boom

Published on February 26, 2013 2:32 PM EST

Your business is where it is today because there is something you have done or you are yet to do. If you are not satisfied with the profit margin and overall revenue being generated by your online business, then, you will need to incorporate a business model that has become popular in the 21st century. 

This business model is drop shipping. This is one of the models that determine whether an online business will succeed or collapse. This is the gap that is making your competitors realize more profit than you. However, you can mend the bridge by embracing this model in conducting your business. So what is drop shipping and how does it function?

Drop Shipping and How it Works

Drop shipping is a type of business model where you as the owner of an online business, contacts a dropship supplier who manufactures or owns a warehouse to supply a certain product to your customer. When operating in this business model, you don’t need to have a physical store or warehouse. This is how drop shipping basically works:

  • The customer places an order for a certain commodity to you as the retailer
  • You then forward the order and the details of your customer to the dropship supplier you have chosen
  • After going through the ordered products, the drop shipper supplier packs and ships them to your customer. 

That’s pretty easy. You can join EcomElites to gain an understanding of how this business model can work for you. If you also have a physical warehouse, you can also use drop shipping. But why is this business model gaining popularity so much?

Why Drop Shipping?

  • It is very easy to kick start and set up
  • There is no way you will be having hiked overhead costs
  • It carries with it low risks – even if you don’t sell, you don’t lose
  • It is flexible in terms of location
  • You can sell a range of products
  • The chances of having a damaged product during shipment are minimal
  • It is very easy to scale up

Nevertheless, when starting to use this business model, you might experience lower profit margins temporarily and in case, something goes wrong you might be liable even if you never delivered the goods to the consumer directly. 

Who can Drop shipping work perfectly for?

Well, we can basically classify the type of entrepreneurs who are best suited by drop shipping into 3 categories:

  • Validating – if you are that entrepreneur who wants to test new products before making a concrete decision in investing on them heavily, drop shipping can work for you and eventually be among the eCom Elites.
  • Budget Conscious – if you have budget constraints then you can be sure drop shipping can work perfectly for you because you don’t need inventory in your store. 
  • Newbies – if you are green in online business, you can try out this model after taking some lessons at eCom Elites. 
  • Walmart – drop shipping is for you if you like selling a wide selection of goods. 

However, if you are brand-centric, non-creative, and margin-focused kind of entrepreneur, drop shipping is not the way to go. 

Conclusion

If you are one of the above types of entrepreneurs, you are perfectly positioned to join a community of ambition online entrepreneurs. Drop shipping could be what your online business needs to scale up. 

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