Carry Drop

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An Introduction to Drop-shipping

Drop-shipping is a retail business model whereby stock is not held by the retailer. When an order is made, the order and shipment details are passed to the manufacturer or authorized wholesaler, who will then send the goods to the customer directly. If a blind drop-shipper is used, the goods will arrive under the retailers name only, sans information for the wholesaler. It is therefore suitable for home business venture newbies who have low start up capital and who do not intend to hold inventory.

Drop-shipping has its advantages an disadvantages. The main advantage is of course the possibility of not carrying any stock and thus saving on space or rent of space, and on insurance for the space and the goods within. This will also result in savings on manpower needed to store, pack and transport the goods. Furthermore, the issue of overstocking and then getting rid of excess stock at very low or no profit, or even at a loss would not arise.

The retailer need not worry about product catalogs and the countless numbers of product shots that are contained within. All the research would be carried out by the drop-shipper and the seller need only focus on how to market the products.

Most drop-shippers do not require an MOQ (minimum order quantity) which means it is not necessary to sell in bulk.

In terms of payment, it need only be made after a confirmed order has been received. Some wholesalers even offer an additional 30 days interest free credit period.

The main disadvantage of drop-shipping is that shipment is 100% wholesaler dependent. Some wholesalers have inefficient inventory and distribution systems and this will affect the retailer directly.

Profit margins are effected by fluctuations in wholesale pricing especially for price sensitive products like computers and other electronics products such as cell phones. Smaller drop-shipping companies have lower economies of scale and may not offer competitive pricing.

Some drop-shippers have customer support services that leave a lot to be desired. This may result in customer dissatisfaction and even return of goods which will inevitably lead to lower revenue. The sellers reputation will also undoubtedly be affected.

Suffice to say, it is imperative that home business newbies associate with drop-shippers which are reputable and reliable.

About the Author

Brad Keet is an entrepreneur and Internet junky. Brad invites you to journey with him as he writes about his home business venture and dispenses free home business startup advice along the way. For more of Brad's take on things, log on to www.fromhomeeveryday.com

Why dosen't "Mariah Carry" just drop the......?

cloths and stop the crackin' wood society already...geesh...

she's married

that might be a reason

Unwinding Carry Trades in Markets
Unwinding Carry Trades in Markets

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