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What is Dropshipping

To understand what is dropshipping, we need to look at various models of product delivery used. We will discuss those used in Internet retailing in particular. Keep in mind that product distribution is something that precedes the Internet and these models beyond electronic delivery were developed and used as long as we have had producers and consumers. Our site visitors have pointed out that we didn't discuss the methods of dropshipping, and we added this page to address that. We hope that is will help you understand the role of the wholesale dropshipper. So let's look at those models to see what is dropshipping.

First, before we discuss the retailing models to see what is dropshipping, let us get the distribution method virtually unique to the Internet out of the way. Electronic delivery (usually in the form of a download of a book, program, or collection of code) became real with the interconnection of sellers and buyers computers, the Internet. Although in this discussion we will be concerned with the distribution of products known as "hard goods", once you have a presence on the Internet you surely will be distributing digital products as well. For instance, on our home page you can sign up for a free eBook about dropshipping and get accesss to our electronic newsletters. Most successful Internet retailing sites rely on delivery of information as well as the sale of goods.

Next, as we lead up to what is dropshipping, there is the inventory model. Once products began to be produced more than one at a time. They had to be stored or inventoried before delivery to the final consumer. When talking about an inventory model for your Internet retailing business, you will be holding the inventory of your goods. This means that you will be responsible for your stocking levels, packaging and shipping, and of course the security of your inventory. If you find a product that sells well enough, you may want to go to an inventory model as it is usually the cheapest way for you to purchase the items for sale. With the inventory model you have the most control over the timely delivery and customer service for your goods which is very important to your customers.

One way to avoid some of the problems with keeping your own inventory is to use an order fulfillment house. Some of the "middleman" dropshippers actually use this mechanism for their more popular items. In this form of distribution, the fulfillment house acts as the warehouse for your goods. As you get orders, the goods are shipped to your customer. Some order fulfillment houses actually take care of creating the product for you. There are many courses and products available as CD or DVD volumes that are created and shipped by fulfillment houses.

So what is dropshipping all about? Actually, there are two types of dropshipping. The first is sometimes referred to as Manufacturing wholesale dropshipping. Here there is a minimum quantity requirement so you end up with an inventory if you do not sell the full minimum at once. This type of wholesale dropshipping is usually referred to as "light bulk" wholesaling but you need to be aware of the minimum quantity requirements when doing a dropshipping set up. The type of dropshipping that we are most interested in, the one that your Internet retailing business will be using, is the wholesale dropshipper who has a minimum quantity of one and will ship to your customer directly. Often the packaging can bare your company name. Rarely will it be identified as coming from the dropshipper itself. Dropshipping is sometimes thought of as a form of fulfillment, but here you do not own any of the product or inventory. Using a dropshipper allows you to concentrate on selling your product rather than worry about stock or delivery. Internet retailing is about promotion of product. Affiliating with a wholesale dropshipper enables you to do just that. What is dropshipping about? It is an enabler for you to work on product promotion, get profit from your effort and become successful. More information about dropshipping is available in our articles (menu link at left) or we have available an eBook Dropshipping Made Easy that contains a lot of information for you to start your dropship business.

How the process works:

  1. You promote the product on your website or auction site.
  2. You take the order, bank the payment and wait for it to clear.
  3. You contact the dropshipper by email, fax, or phone giving them the item, customer name, and address.
  4. The dropshipper delivers the item to the customer, usually with your company name, not theirs
  5. The dropshipper invoices you with the agreed upon price.

Thus wholesale dropshipping is really a good way to get high profit products without worries of inventory. We hope that you now have a better understanding of what is dropshipping.

Wholesale-portal is an inexpensive membership site which lists and connects to many wholesale dropshippers letting you take advantage of your knowledge of what is dropshpping.