Building an Income from Dropshipping

In the past, setting up a business could be an expensive affair, with many up front costs incurred before you could really start to earn any money. Amongst the most expensive aspects of a business were the premises from which you would operate, and the initial purchase of stock to sell.

Thanks to the internet, it has become possible for almost anyone to set up a website that can act instead of a traditional shop, and use a mechanism called drop shipping to bypass the need to actually purchase any stock.

Drop shipping is a simple process by which a retailer takes orders for a particular product, for example a computer memory card, and then rather buy the item and then sell it on at a profit, simply passes on the name and address of the buyer to the wholesaler, who when sends out the item to the customer direct. The retailer keeps the profit he has made from the margin between the price he advertises the item at, and the lower wholesale cost including delivery that the supplier charges.

The main advantage of building your income from drop shipping is that it is one of the most risk free methods of earning money buying and selling. As the retailer, you do not incur any costs until you actually place an order, and even then, as long as you set a retail price that covers any costs that you can foresee, you are guaranteed to make a profit.

The online auction site eBay is a great place to earn money from selling goods online, and is a medium that lends itself perfectly to the drop shipping of goods. As the seller, all you need to do is advertise goods from a wholesaler at a “buy it now” price that is lower than you might see in a high street store or conventional website, and then wait for customers to order from you thanks to your low prices!

Once you have received an order and payment, simply forward the appropriate details onto the wholesaler, and they will send out the product to the buyer. Many wholesalers are happy to enter into a drop shipping arrangement with retailers, as it means that they are able to avoid any promotional costs, and only supply on an on demand basis, reducing their costs substantially, while you as the retailer are able to pocket a decent no-risk profit on every single item that you sell.