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The Curious Bag
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Drop shipping is a method of online retailing which involves selling a product that is shipped and mailed to the buyer by a third party. The seller receives a percentage of the sale without having to ship or store inventory.
Process
The seller markets and sells a product to the buyer at retail price. The seller notifies the wholesaler and pays them the wholesale price. The wholesaler ships the product directly to the buyer. The seller earns the difference between wholesale and retail prices.
Pros
Drop shipping requires minimal start-up costs. Sellers buy wholesale and sell retail, and never have to store inventory or ship products.
Cons
Sellers using drop shipping do not have complete control over the product or shipping times, and are not able to insert a brand name on the product or packaging.
Drop Shippers
Online companies like Amazon.com and Overstock.com use the drop shipping method, according to AllBusiness.com.
Precautions
Be wary of companies that are not legitimate or that charge monthly fees. Select a wholesaler that offers a clear return policy and uses a method of shipping which allows the buyer to track the shipment.
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