What is dropshipping? Why is it used? Can you use it? What are the pros and cons of dropshipping?

I\’m glad you asked all those questions or at least thought about one or two of them. Asking questions shows me that you are not ready to embrace a selling tactic that you are hearing or reading about; but you are curious about the advantages and disadvantages of using dropshippers.

Let\’s start at the beginning by defining what dropshipping is all about.

If you have a desire to sell a widget on eBay or on your website, you must find a source for the widget you want to sell. This involves finding distributors or manufacturers of the widget you want to sell. Walking down this path will uncover the fact that authorized distributors of the widget you want to sell will probably need a minimum quantity or dollar volume purchase from you for the widget you want to sell.

The manufacturer will not even want to talk to you, because he has a distributor or distributors that stock large quantities of the widget, and he doesn\’t want to sell you one piece at a time. It\’s just not efficient for him.

Where does that leave you? You are in the proverbial pickle now, because you don\’t want to fill up your bedroom with 200 widgets from the distributor. Besides, as an optimistic newbie seller you can\’t afford the outlay in cash for the quantity required to meet his minimum buy.

Enter the dropshipper. He has a wholesale warehouse that stocks widgets that he buys at a wholesale price from the distributor, and for a fee he will offer to take single piece orders from you and ship them to your customer. Depending on your arrangement with the dropshipper, your customer will not even know that the shipment came from the dropshipper.

The advantage for the newbie is this. You don\’t have to carry stock in your bedroom or garage, and all the shipping is taken care of by the dropshipper. The downside is that your competitors, who can afford to stock widgets in their home or rental space, buy widgets without the dropshipper markup, so they can beat the price you thought would be competitive.

Here\’s the bottom line. If you can be price competitive, dropshipping for the newbie is the way to go initially until you get your feet on the ground, but you have to be very selective in the product you want to sell. The key is to find a niche that does not have a lot of competition.

Finding dropshippers will be a daunting task in itself. A cursory look at the Internet, will uncover hundreds of dropshipppers that will seem to offer you the moon to get your business. But beware of the markup wolf in genuine wholesale sheep\’s clothing. Conduct your due diligence and thoroughly investigate. Get information from reliable and trustworthy sources.

Because dropshipping is such a popular subject, Robert Coghill has created a website to answer all your questions about the advantages and disadvantages of dropshipping. You can find the subject thoroughly discussed by going to http://TheEbizSolution.com/dropship