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What is Drop Shipping and How Do I Setup a Drop Shipping Business?

ArticleID 68  
Writer Martin Mungai
Category Personal Article



Drop shipping can simply be explained as a business where an individual, known as a re-seller, sells things on-line for a distributor or wholesaler. The re-seller lists the items on an internet site and when orders come in, they forward the shipping data to the distributor who then sends the product to the buyers. The re-seller will do the work of building the web site, advertising the product, and accepting the payments. What makes it worthwhile for the re-seller is the difference between the retail and wholesale prices. Re-sellers can run drop shipping businesses out of their homes; it’s also not necessary for them to maintain an inventory of shipping materials or products.


Steps to follow in setting up a drop shipping Business

• Look for a wholesaler who works with drop shippers. On the internet, a variety of wholesalers’ sites will appear when you search, as most of them have websites. It isn't necessary to pay for a listing of wholesalers if you're willing to do your own study or research.


• Join the wholesaler's list of drop shippers by giving them information concerning yourself as well as your business; normally, distributors charge a monthly membership fee.


• Make a site that has a shopping cart. Build your own site, and acquire a business account that permits you to accept credit cards. Look for your own hosting service if you have the skills and want your own distinctive look. However, you will need to pay for the hosting service and your domain name.


• Register a merchant account on sites like eBay or Amazon, which are designed to simplify a drop shipping business. Though, both sites charge little fee once a sale is made. If you decide to use a site like PayPal to process payments, you'll also have to pay another fee.


• Apply for a business license if your locality or state needs you to have a permit for such. You also have to pay taxes on your business income; however, you may be able to deduct depreciation and expenses. Your income will be credited to you while determining how much Social Security you qualify for once you retire.


• List the wholesaler's items on your website. Most make it effortless to copy and paste photos as well as descriptions of their items. Put a value on your items so you'll make a profit once the things sell. It’s usually best to use the retail price suggested by the wholesaler.


• Learn to drive traffic to your site by advertising on other sites, giving specials offers and sales, and using other methods of marketing.


• Confirm that orders are paid for, then go over to the distributor or wholesaler and buy the things ordered. Give the buyer's address data to the distributor.


• Follow up with your clients, the buyers, to make sure they're content with what they have acquired. Address any concern or issue with the distributor, if necessary.


Drop ship, Drop shipping, Make money, Entrepreneur, Entrepreneurship, Business
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