What is Drop Shipping?

Drop Shipping (By Wikipedia)

Drop shipping is a type of retailing in which the retailer does not keep goods/product in stock, but instead passes customer orders and shipment details to wholesalers, who then dispatch the goods to the customer directly. The retailers make their profit on the difference between the wholesale and retail price.

Some retailers may still keep "show" items on display in stores, so that customers can inspect an item similar to those that they can purchase. Other retailers may only provide a catalogue or Internet presence.

Drop shipping can occur when a retailer (who typically sells in small quantities to the general public) receives a single large order for a product. Rather than route the shipment through the retail store, the retailer will arrange for the goods to be shipped directly to the purchaser. This has been made easier since the internet revolution of the mid 1990s.

The book selling industry provides an example. Book retailers typically sell single copies of books to the general public. But a store may receive an order for, say, 50 copies of a book from a company that wishes to buy the books for their employees, clients, or stockholders. The book retailer will arrange for the wholesaler to deliver the books directly to the company.

Many sellers on eBay also drop ship. Typically a seller will list an item as new and ship the item directly from the wholesaler to the highest bidder. The seller profits from the difference between the winning bid and the wholesale price, minus any selling and merchant fees from eBay.

Yet another version of drop shipping is the practice of using private freight carriers to transport large volume items direct from the manufacturer to a postal facility close to the location of the end recipients (as opposed to dropping the items at a postal facility close to the manufacturer). This practice is employed for purposes of postal and time savings.

An example is a magazine publisher trucking all magazines addressed to subscribers in Miami directly to the post office in Miami.

Some best Wholesale & Dropshipper Directories (Free & Paid):
WholesalerHub, BuyingWholesale, The Wholesaler, KellySearch

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