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The Basics Of Drop Shipping Houses

For long, the regular retails stores have been the major sources of products. With the development of Internet the online retail stores have become very popular due to their easy access. In the retailing business you are the one who is responsible to hold stock of goods, the packaging and shipping. You have to look into the maintenance of inventory of goods depending upon the demand for the different products. To avoid this problem, some use the fulfillment houses that store merchandise for you, get the orders and ship the products to the customer. Similarly there are some houses or wholesale companies who own the goods and ship them to the customer. This is drop shipping.

Here it's your company who gets the order and the payment for it and then forwards the order to the drop shipper. In this case the ownership of the product is with the drop shipper, but the customer database is with you. The drop shipper pays you a sales commission on the goods shipped by the company. Generally in industrial areas of different states you will find large buildings similar to warehouses. These would typically be those of the drop shipping companies. They are not open for the general public. They will be catering to the drop ship orders from these locations only.

How does it work?

There are two types of drop shipping facilities, manufacturing wholesale drop shipping and the Internet retailing wholesale drop shipping. In wholesale drop shipping, you have to be aware of the minimum quantity requirements otherwise the stock would remain stuck up with you. However, the popular one is the Internet retailing wholesale drop shipping. It is even useful for those who are looking at home-based business propositions. In this case, it should be understood that you are the retailer without the stock and you will have to find a drop-shipping house to supply the products to your customers.

For using the Internet based drop shipping business, you need to have a portal for your business. You are the retailer in this relationship. You should have an Internet store with the shopping cart facility as well as the capacity to accept credit cards. Then you find a drop shipper who accepts drop shipping those products. You set up an account as the retailer with the drop-ship supplier. On receiving the images and descriptions of the products from the drop shipper you post the same on to the Internet store. When the prospective customers visit the site and decide on the products on the basis of the price quoted, he purchases the item using his credit card and pays the amount with some additional shipping fees in it. In turn, you send the order to the drop shipper with the name and address details of the customer. He in turn sends the products to the customer directly. The drop shipper charges the wholesale price plus the shipping charges. The customer receives the goods at the doorstep.

Thus drop shipping is useful when you want to keep yourself away from the worries of maintaining inventory as well as the risk on the unsold goods. The shipping and logistic concerns are also taken care of by the drop shipping houses.

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The Basics Of Drop Shipping Houses