What is Drop Shipping?

Full drop shipping explanation

The short answer:


Drop Shipping is the selling of products at a higher price than you get them for.

 

The longer more in-depth answer:

Drop Shipping is done through a large company with hundreds of millions of products. Most Drop Shipping companies charge a monthly or yearly fee. The products that the company offers are all at Wholesale price. Wholesale price is the price that it takes to make the product. Once you have looked through your Drop Shippers catalog you pick what you wish to sell. You can sell the product anyway you like, my favorite thing to do is make an E-commerce website that is specifically about what you are selling. When you sell the product you mark it up that way when you make a sale you make a profit. Once you sell the product you give the costumer’s information to the Drop Shipper and they will ship it to the customer for you. You never hold any inventory.

 

Example:

So you are going through your Drop Shippers website and you find a lot of Kitchen pans that are all $25, you decide that these pans are what you wish to sell. When you go to sell them you put the up for $35. Once you made a sale you go back to your Drop Shipper and buy the pan, when purchasing you type in your costumers address and the drop Shipper will send it to your costumer. You just made a profit of ten dollars.

 

Why I like Drop Shipping

Drop Shipping is something that I like for a number of reasons. The first is that it is extremely low risk, since you hold no inventory you don’t have to worry about ordering too much. One thing that I like about Drop Shipping is that it teaches you so much about business, you learn everything that has to do with owning a store.

Feature Image Credit: Aurimas/Flickr

About Calvin Raab (21 Articles)
Hello, My name is Calvin Raab. I am the CEO and Founder of Raab Journal. I am 17 years old and I love learning more about the the world of business. Any questions or concerns please contact me at calvin@raabjournal.com Thank you and enjoy!

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