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by: GrahamWaite
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So what on earth is Dropshipping I hear you cry well in the US it is a multi million dollar industry but else where it is very much still in it's infancy.

This is a quick summary of Dropshipping for those who don't know. What happens is instead of you ordering a huge pile of stock and then after you sell it you ship it direct to your customers with dropshipping the supplier send out your orders for you. Once you make the sale you send the dropshipper your customers details and they send out the goods. They even use your shipping labels so your customer won't even know or care you aren't supplying them.

Drop shipping is a very popular option with sellers because it takes a lot of the grunt work out of selling on eBay.No need for shipping goods or buying stock. However, there are some pretty big negatives to drop shipping it's not all plain sailing especially true for new and inexperienced ebay sellers.

Lets look at some of the dropshipping positives first:-

1. There is no need to hold huge stocks of goods or pay for storage or warehousing of goods. While not as important for less bulky goods it can be very useful for bigger items.

2. It will mean that you can save on the expense of having goods shipped by your supplier. But you must bear in mind instead either you or your customer will be charged on the item being shipped plus a fee to cover the labor costs of your supplier to do that for you.

3. Shipping and packing stock can be very time consuming so having this huge burden lifted from your shoulders can be a blessing and will allow you more time to concentrate on other aspects of your business.

4. No need to pay for or store packaging materials: Packaging can be quite costly and also very bulky so not having to worry about this can be really important, even more so if you don't have much storage space.

However as with most things in life there is always a downside and dropshipping is no exception to the rule.

So here are the dropshipping negatives:-

1. Dropshipping isn't cheap and can add a few extra bucks to the overall product costs as you are paying the suppliers labor costs. These on occasions can be as much as an extra $5 or even more. Not forgetting of course actual shipping costs are then added on top. This means you need to calculate carefully if selling a certain product that it can still be done profitably when taking these costs in to consideration.

2. Shipping issues can still be headache don't forget the customer purchased from you so they will expect you to resolve any disputes for them. Also be wary of the fact that much of this part of the operation is out of your control so choose your dropshiper wisely.

3. Limited Choice is another negative when it comes to dropshipping you may find a perfect product to sell but are then unable to find a suitable company that offers dropshipping. Many distributors prefer to sell in bulk and don't want the hassle and extra paperwork involved with dropshipping.

4. When you find in your research a product in high demand try not to feel to downhearted when on occasions your supplier sells out. This can cause a lot of disruption to your business and leave you with digruntled customers so once again consider this when choosing products and suppliers to avoid negative feedback.

Whilst dropshipping can work for some people for others it can be a major headache make sure you do thorough research and you should avoid most of the major problems.

About the Author

Selling on eBay and thinking about dropshipping . Learn how to sky rocket your ebay business with the special free audio download from Auction Wealth Secrets where you find cutting edge ideas and tricks for eBay success.

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