What is Dropshipping?

I am fairly experienced with Import/Export and Wholesale, but I do not quite understand what the term "dropshipping" means?

I have done much shipping, straight from the factory, around europe in the past, e.g: exporting Red Caviar from the Baltic States into the EU, direct to Food Retailers. Is this something similar?

I sell caviar on Ebay, customer pays me, I pay Caviar Co. to ship their product to the customer.

u sell caviar on ebay lol ?

Drop shipping means that the company will handle all the transportation,etc for you. So if you sell ipods on ebay for example, and you have a company that drop ships them for you, then that means you pay them to send the customer the ipod.

So let's say ipod is $100 the company is selling to you for wholesale.
You sell the ipod on ebay for $150.
Then you send the customer's info,etc. to the company and they send it to the customer on your behalf. This makes it look like you sent it to the customer.

It basically takes care of warehouses, holding on to the objects, and sending them out yourself,etc.

LOL no graphic that was just an example.

Thank you for the responce, I understand this now and I quite like the idea.

I used to buy caviar for around 2 Euro:100 gram tins, ship them in a large freight container (costs around 400 euro) to the western EU countries and resell directly to the Catering Companies ( companies that suply restaurants etc) for around 4 Euro:100gram. Naturally, a Freighter can hold around a TONNE of produce, so as you can imagine I made quite a nice marginal profit.

I didnt have to use warehouse or packaging either, I simply payed the shipping company to pick up the produce directly from the factory, and ship/delive directly to the client's warehouse. The logistics involved were incredibly cheap.

The only fuss was involved with VAT forms and Taxation. So In general its exactly the same as Drop-shipping. This was amde easier by the fact that I had a semi-exclusivity contract with the factory, meaning the factory only produced/sold the goods to a few select people (middle men/clients) which made competition very small.

Anyway, I was wondering what you guys use for dropshipping. I hear talk of electronics, and other gadgets; but how/where do you obtain the item? I know that in that field of product, the competition is sky-high with a lot of middlemen involved (its impossible to buy iPods directly from the factory because they have exclusivity for APPLE Ditribution companies, which in turn deal with wholesale to the High-street shop chains, whom in turn deal with custumers. So, how is it viable to say that dealing iPods is a valid dropshipping method?

I've only sold personal goods on ebay so far. I already have an idea for this I know a site that custom makes lasers. Much cheaper and equal quality to main sites for sale. I could order from the seller and name my ebay buyer as the address to send. Is that how this works on small scale? I see the benefit is they pay me and I don't have to spend my own money buying from the original seller.

I'll check what people are selling with this method but it sounds promising. VERY promising.

Dropshipping has been around since ebay kicked off.
Although ipod/ iphone etc are hot products at the minute there are millions of other products that are in demand and will always be in demand.

Just like IM i think its a good idea to find a niche product(s) that your comfortable with and knowledgable about and specialize in that. Build up a relationship with a wholesaler in said niche and also build a relationship with customers you sell too as well. If you provide a good sevice they will keep coming back.

For example having your own ebay shop/page with an opt in form. Also another good tip is to record the buyers paypal email address (as this is more than always thier primary address) and add them to your opt in list so you can sell on a later date.

The most successful ebay sellers usually have an 'offline' business mentality and they apply it online.

pleiadian01 said:

The most successful ebay sellers usually have an 'offline' business mentality and they apply it online.

Click to expand...

I love this phrase very much. It is damn right. I know some of my friends who gain a constant income of USD500 per day just from eBay. He is very good in his offline business and now he did it online. Mentality is the key.