Untapped Online Financial Wells

Drop Shipping

The internet is indeed the greatest thing that happened to the human race in recent times.

This week I want us to look into the online business.  It’s a huge industry.  You can sell practically anything online.  This means you are not limited by location.  You can be anywhere and sell to anyone. It’s fantastic. 

However majority of us don’t take advantage of this, as we’ll rather just send emails and check out friend’s status on Facebook – interesting.  The time you spend online can begin to yield better returns to the point that you may become more comfortable financially.

This week I’ll be discussing Drop Shipping.

Drop shipping is a retail method in which merchandise is shipped to the customer directly from the warehouse or supplier rather than from the retailer. When a product is sold, the retailer passes along the customers' order information to the wholesaler or supplier who then packages and ships the product. This process minimizes the risk to you, as a retailer, because you do not need to buy the product until it has sold. Suppliers take care of the warehousing, packaging, and shipping of products, saving you a great deal of money.

Drop shipping is not a 'get-rich-quick' scheme. As with any business, it takes dedication and hard work to be successful. However, there are distinct benefits to using drop shipping in your online retail business:

• You can become a retailer without needing to invest large amounts of money.
• You can start a business with very little risk.
• You don't have to carry inventory or pay for inventory upfront—if the product doesn't sell, you never have to buy it.
• You don't have to buy packaging materials and shipping labels, nor will you need a shipping account.
• You purchase products at wholesale pricing and set your own retail prices.

Before I discuss the global perspective to this, allow me to add this for my Nigerian audience.  Perhaps you’ve seen a local business or product that you like, you can have an arrangement with them to sell on their behalf.  You don’t stock you don’t commit any funds without a sale.  Your job is to setup the site and get buyers to buy the goods.  You will need to get your info right on shipping and handling.

I once sold shoes designed by a local cobbler.  They were really nice shoes and I knew they will sell.  So I approached the cobbler and we had an arrangement.  I sold those shoes without a single investment.  That was offline, imagine the possibilities of an online arrangement.  I won’t be surprised that your Konga.com and Jumia.com do drop shipping (just a thought, don’t mean to insinuate anything).

Needless to say, your integrity and trustworthiness are key to great sales in this line of business.  Get your buyers to post feedbacks of every successful transaction and you are onto going big time.

Well, back to the global dimension of things, the merchant handles all of the customer service, billing, shipping, etc. The product, as shipped, may be labelled with the website owner's logo, etc. but all of the back end stuff is handled by the merchant.  The website owner does not take title to the goods, but is free to apply a mark-up over the merchant's wholesale pricing, as opposed to receiving a commission as would an affiliate. The site owner's shopping cart is simply a mirror of the merchant's in the ideal situation. Any profit earned by the site owner is paid by the merchant to the site owner.

Well if you are interested in brainstorming further on this you can comment or start a discussion on my brainstorming page.

Great week ahead.
Images courtesy,smashingmagazine.com,