'...Well jasong42122,

Your explanation of Drop Shipping relates solely to China, but can also relate to the way most Asian companies work, together with your personal recommendations and experience.

However, it does not offer a true and accurate description of Drop Shipping per se and so, to elaborate on the thread you started, here is a more detailed explanation of Drop Shipping for the benefit of forum members.

Drop Shipping is a product management technique where you do not need to hold any inventory or buy any goods to stock. Instead, the suppliers or manufacturers will pack and ship the goods for you and mail or deliver directly to the customers themselves.

Put simply, you pass on the customer's order to the suppliers who will then do the rest of the work and you keep the profits difference between the supplier's price and your selling price.

Benefits Of Drop Shipping

The two main benefits of using drop shipping are - no need to buy any goods and no loss incurred. You do not make a loss because you are paid immediately when the customer makes a purchase.

The latter is extremely beneficial to new sellers as it allow you to sell anything you want without the need for a budget! For example, you can choose to drop ship expensive equipment, television or furniture without the need to buy them beforehand.

Disadvantages

One of the major disadvantages to drop shipping is that you take the blame if something goes wrong because your customers only care about their ordered items and are not interested in problems you might be encountering from your Drop Shipper. All they know is that you took their money and they did not get their ordered product. There is also a greater possibility of a scam. So never part with your money unless you are confident about the deal and your Drop Shipper.

Second disadvantage is delivering information about the product. For this you will have to contact the supplier to get the information and then contact the customer to pass the information on. This can be very time consuming. (You cannot put the customer directly in touch with the supplier or you will lose the sale). Having no control over the inventory that you are selling and over how fast the item is re-stocked and shipped is another big disadvantage. Sometime serious delays gives rise to annoyance among the customers and a bad name to your reputation.

The strategy to take the responsibilities of your Drop Shippers actions is at your disadvantage because the customer knows only you and so you will end up being the one who is responsible for any kind of error in the process of delivering the ordered goods to the customers. You will be the one to apologise and set matters straight with the customer, not the Drop Shipper.

Highly competitive, you will also have to keep one jump ahead because other people can end up selling the same product from the same Drop Shipper that you utilise, thus decreasing your profits. Therefore it is important that you take care of all these disadvantages to run your online business successfully.

Personally, I do not like Drop Shipping as I always like to be in total control of my business.

themagician