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Drop shipping (or drop-shipping, dropshipping, etc.) is a great way to get started if you have little or no capital for your own inventory. Even when you can warehouse some goods yourself it’s still a great way to expand your product line—the “endless aisle” as it’s sometimes referred to.
For one, you never have to see or handle the products. Just take orders, submit the orders to be shipped to your customers, and keep the difference between your cost and selling price. There are a few things you’ll need to be aware of though:
You never see or handle the products — this could turn out to be a nightmare instead of a blessing if you’re not careful. So before you start selling, get to know the company and the products they’re supplying you with.
Be certain that they can be trusted to fill orders properly, with top-notch goods, package the goods properly, and ship in a timely fashion every time.
Have some family members, friends, or neighbors accept test orders for you. Then you can see for yourself what your future customers will experience when their orders arrive.
Make sure that you’re always in-the-know about stock levels. Especially if you sell on eBay you need to be absolutely certain that the products you have listed, you have available to fill the order.
Limit your suppliers to one or two. Unless you have a sophisticated software system in place to keep track of stock levels in real time, it will run you ragged trying to keep up. Besides, various suppliers have their own return policies and it could become a mess trying to keep up with this as well.