Dropshipping is an essential element of the modern business that revolves around sales of products, and yet very few understand what it represents. This creates misinformation that damages various firms in this industry. Our company is also hurt by the misinformation that goes around about drop shipping. People who purchase goods over the internet also suffer as they lose money through purchases from overseas sellers.
We will try to explain what drop shipping means and how it helps all sides in a deal. If you are interested in more detailed info about how to buy Amazon goods, for less money than it is listed, then read this testimonial for this dropshipping company called SaleHoo, as it goes in depth about what we do and how we do it.
The three-sided deals that benefit everyone
As a retailer it’s hard, and sometimes impossible to pay for the storage of goods as they wait for an individual to purchase them. Storage is expensive, and the price goes up as the rarity, and unique features of some products come into the play. This is why some smaller retailers decide to work through dropshipping as it doesn’t require storage space.
A business that operates through dropshipping doesn’t have any goods in stock (except some who have products for display which is the case with some brick-and-mortar shops), and they are just a connection between the customer and the manufacturer or wholesaler or another retailer. For example, if you order some goods from us, we will send your order to the other party that will deliver the goods to your address.
The profit we and other companies that drop ship get is the difference between wholesale and retail price. Now, you might think that it would be better for you to buy those goods from the party we deal with, but that is either impossible, or it would be more expensive for you to do so.
Manufacturers and other retailers we work with sell us their goods at the wholesale price according to contracts we create and thus we both profit. The retailer gets to sell products without any need to advertise and deal with clients, and we earn the difference between two prices. You, as a client, get goods that are below regular retail price (or in some cases, you don’t have to pay for shipment). This all depends on your location and the location of the manufacturer or the retailer.
How dropshipping works with goods sold in bulk
Many producers and large retailers won’t sell individuals products, and they will sell their merchandise in bulk only. This is where companies like we come into the play. We buy those bulk goods, but we don’t take them to our storage, instead of that we let them keep the products. When an order for a product comes, we notify the company that sends it. All shipping costs are on us, or in some cases we split the shipping cost with those that purchase our goods. In this way all three sides that are involved in the purchase and the sale profit from the deal.