If you are planning to start an online business, then 'Drop shipping' is the new way to make money. This is a kind of retailing in which the retailer does not stock goods but he/she takes the order and shipment details from the customer and sends the details to the wholesaler who then delivers the order. The difference between the wholesale and the retail price of the product is profit for the retailer.

Top 5 Advantages of Drop Shipping

1. No Need to Buy Goods or Keep Inventory:

In drop shipping, you can start your business by merely displaying the products for sale on your website without having to purchase the products. When you receive orders via email, forward it to the drop shipper by email who will then ship the products.

There is no risk because you do not have to make a down payment to purchase inventory since you are not carrying inventory. The drop shipper (who ships products to your customers) will lose business if the products are not in demand. Some drop shippers charge a small fee to cover web hosting and advertising fees.

2. No Shipping Hassles:

The drop shippers will take care of shipping and delivering the products to your customers, so you will be able to focus on the marketing side of your business without any delivery worries.

3. No Warehouse Required:

As you are not storing any goods, there is no cost or hassles related to warehousing as well. This saves you from the problems of having to find a location to store your stock and pay monthly warehouse fees which will reduce your profits. The drop shipper will bear all these costs.

4. A Flexible Product Catalogue:

You will be free to promote a wide range of products on the catalogue of your website. You might even tie up with more than one drop shipper and advertise different brands of the same product. However, in drop shipping, it is necessary that you focus on a certain category of goods and have a ‘core’ group of products on your website.

5. No Minimum Quantity Required on Orders:

Drop Shippers do not require a minimum quantity on orders. You can take bulk orders from online customers and then send them to the drop shipper one by one. Thus, it becomes very flexible as a business option.

Drop Shipping Is a Flexible Option for Large and Small Businesses

To conclude, drop shipping is definitely a business option that you will want to consider as there are no hassles of stocking inventory or product delivery. On evaluating the above advantages, you will realize that drop shipping is a viable option for a small-business retailer. To be a Large retailer, you will need to have enough resources including a decent amount of capital to begin a business in the wholesaling mode. Drop shipping is a much more flexible and smarter option.

Part 2: Why Is Drop Ship So Popular
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