What is Dropshipping – The Facts
Transcribe of “What is Dropshipping – The Facts”
Hi guys, Neil Waterhouse. This week’s video is about what is Drop shipping. I received a question from Janice Miller asking see if I can explain in simple layman’s terms exactly what is Drop shipping. So here it goes. Let’s say you’re selling a widget on eBay or Amazon or your own website. With a traditional non drop-ship business model your first purchase the widget from your supplier and then you list it for sale on eBay, Amazon or your own website. And then when it sells and after you’ve been paid you then box up the widget and you ship it direct to your customer. With drop shipping the big difference is you only purchase the widget from your supplier after you have sold the item and after the customer’s paid you.
With Drop shipping, you get paid first before you purchase the item from your supplier
So with Drop shipping, you get paid first before you purchase the item from your supplier. After you’ve been paid you then get your supplier to ship the item or items direct to your customer. So just to repeat that. With drop shipping you list the item for sale before you have purchased it. And then when it sells, you then log onto your supplier’s website. And purchase the item from your supplier. But instead of putting your delivery address. You put the customer’s delivery address. This way your supplier ships the item directly to your customer.
Your supplier does all of the hard work
Your supplier does all of the hard work. They do all the wrapping and packing and they ship the item direct to your customer. So the big difference with drop shipping versus the traditional non drop shipping business model is. With a non drop ship business, you purchase inventory before it sells. With drop shipping you only purchase inventory after it sells. So with drop shipping, you’re cashflow positive. So what are you doing with Drop shipping is using your suppliers inventory. Instead of using you’re own inventory.
In the industry this is known as virtual imagery or Drop shipping.
In the industry this is known as virtual imagery or Drop shipping. The big advantage of course with drop shipping is that. You do not need to spend thousands of dollars pre-purchasing inventory before it sells. You also don’t need a warehouse, insurance for your warehouse inventory and you don’t need to spend money on warehouse staff to pick and pack items every time an item sells. This makes it very easy to automate and expand a drop ship business, as your suppliers do all the hard work like shipping warehousing, as well as funding tens or hundreds of thousands of dollars of inventory.
Drop shipping has become so popular for not just online sellers but also for bricks and mortar sellers
This is why drop shipping has become so popular for not just online sellers but also for bricks and mortar sellers. They want to grow, but they don’t want to invest tens or hundreds of thousand dollars pre-purchasing inventory. before it sells. With drop shipping you can build a seven-digit drop ship business using less than a hundred dollars. Now, words of warning if you’re selling on eBay or Amazon, please do not use suppliers in other countries. Your customers will not tolerate continuous late deliveries, when items get delayed you to customs on either end. delayed flights, volcanic ash or whatever.
Please only use suppliers in your own country
Please only use suppliers in your own country. If you live in say Australia, only use Australian suppliers. If you live in the U S only use U.S-by suppliers. As a host and founder of the four largest eBay Amazon meetup groups in Australia, I can see inside not only our own drop ship businesses but also many of the other members. If you want to build a business for a long haul only use suppliers in your own country, or the country that you’re building cause you don’t have to just build drop ship business in your own country.
Only use supplies in that country
You can build them in 37 other different countries but whatever country you’re building in only use supplies in that country. But if you don’t know how to find suppliers in your country or other countries, I’ll put a link on the screen and below to previous week’s video showing exactly how to find suppliers in other countries. Also, I need supplies which can have their inventory automatically checked multiple times per day to make sure they have inventory available.
Make sure that listing is showing zero available
If one of your suppliers runs out of stock, it’s important to make sure that listing is showing zero available whoever you’re listing at, whoever you’re selling at. With today’s technology this can be all done automatic. Again, I’ll put a link on the screen to previous week’s video showing how to do that.
Complete free step-by-step workshop
If you want to know more about dropshipping I’ll put a link on the screen to complete free step-by-step workshop which has loads of case studies from people who have built six and 72 drop ship businesses from scratch. I hope this video helped you with what is Dropshipping. If you need any help scaling up your business make sure you check out the step-by-step videos below or more in there. Make sure you hit the subscribe button to the no fluff channel anyone can make a full-time living from their home using eBay and Amazon. Until next week stay safe. Let’s is Neil Waterhouse.
How to setup addresses in other countries for dropshipping
How to enable eBay’s out of stock feature.
There are many VPNs that you can use, from free to paid.
Hoxx is a good free one. This is a plug-in for Google Chrome.
These are the ones we use.
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