Introduction

Hello and welcome to today’s workshop!

Drop shipping is one of the most misunderstood and misrepresented methods of product sourcing. And what you don’t know about drop shipping can hurt your business, your customer experience and your Detailed Seller Ratings (DSRs).

I’m Lisa Suttora, Founder/CEO of eBay Certified Provider WhatDoISell.com and today we’re going behind the scenes to sort out drop shipping facts from fiction. You’ll also learn how to make drop shipping work FOR your business.

Debunking the MYTHS

There are several misconceptions about the world of drop shipping.

Let’s start by setting the record straight about drop shipping:

- Drop shippers are neither the answer to ALL your product sourcing needs nor is drop shipping a scam
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- Drop shipping has a place in your product sourcing IF you know how to use it

- Drop shipping is not a pushbutton, automatic, 'cash machine' that you can set and forget

What is Drop Shipping?

Drop shipping is the process of ordering a single product from a manufacturer, wholesaler or distributor who will then ship that item to your customer.

With drop shipping you do not buy the products in bulk upfront.

Note: Some drop shippers will require that you commit to a certain order volume of products per month before they will open an account for you.

With drop shipping, you place the order with the drop shipper as soon as your customer purchases the product from you.

The Term Drop Shipper

As you can see, the term “drop shipper” is used much like the word Kleenex.

Kleenex is a brand of tissue. But people interchange the two words.

A drop shipper is really a supplier who ships products in bulk and also drop ships product.

However, for ease of use, we will use the word “drop shipper” throughout this workshop.

Just keep in mind that we really mean:

“A drop shipper is really a supplier who ships products in bulk and also drop ships product.”

How Do I Find a Good Drop Shipper?

Locating a company who drop ships requires the same type of research as you would use to locate any kind of wholesale supplier.

At the end of this workshop, you'll find further information about how to locate wholesale suppliers and drop shippers.

The best approach is to call the wholesale supplier you are interested in dealing with and simply ask them if they drop ship their products.

Benefits of Drop Shipping

There are many reasons that drop shipping is an attractive product sourcing method for the home based entrepreneur:

- No upfront investment in inventory
- Good for people who have little money to invest in inventory
- Minimize product sourcing risks
- No need to stock inventory
- Good for home based business owners with limited space
- Ability to sell a wide assortment of products
- Great way to test out products in different niches

(You can find out more about how to apply these benefits to your business in the closing posts of this workshop.)

Can you make a profit on eBay with drop shipping?

Yes you can make a profit by drop shipping products on eBay, just as you can with any other product sourcing method.

Keep in mind though, the drop shipper is doing some of your work for you.

They are warehousing the product, packaging it shipping it, and in some cases handling returns. They will charge you for this service. You can't expect drop shippers to provide this service to you for free.

Therefore you must ask yourself if the decreased profit margin is worth the benefits of having your product drop shipped.

You must also keep in mind that…

- The standard method of drop shipping doesn’t work
- It is difficult or impossible to make a profit on oversaturated items
- Picking up a drop shipping directory or catalog and then “looking for an item to sell profitably” will result in frustration and wasted time
- There is massive competition with mainstream items advertised by drop shipping intermediaries
- Your profit margins will be smaller than if you buy in bulk
- You have to stay on top of your drop shipping relationships to make sure that your customers remain satisfied
- You can’t ignore the need to look at product trends
- You must focus on niche products
- You can’t look at drop shipping to be your only method of product sourcing