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Introduction to Dropshopping (Posted on 06/11/05)
What Is Dropshipping?
Drop shipping is a type of retailing where the retailer does not keep goods in stock, but instead passes orders and shipment details to the wholesaler upon ordering. The wholesaler then dispatches the goods to the customer directly. The retailer makes their profit on the difference between the wholesale/dropship and retail price.
How Does Dropshipping Actually Work?
For instance, if you found a product from a dropshipper for £20.00 and you sell that product for a specific price, let's use £50.00 plus £4.50 postage and packing as an example. Once you collect payment of £54.50 from the customer, you forward the £20.00 plus £4.50 postage costs to the supplier, and keep the £30.00 as profit, never having to touch or store the Product, as the supplier sends it out direct. This type of arrangement is extremely beneficial, as you have a way to earn money, having no start-up costs, no overhead, no packaging costs.
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