Drop Shipping Business

Biz Model

Drop Shipping Business

Is a drop shipping business is a frisky or risky business? Discover it by reading my other articles in this section.  Learn about the right way to tap into this biz model as well as other alternatives.

I know you will hear all around the internet that this is one of the least risky online businesses.  Let me disagree!  And let me share with you why and the alternative directions you may take.

In theory this biz model sounds so great doesn’t it?  I know it looks like a very shiny ball.  However, it has many risks, maybe more than other online biz model.

If you want to start a low risk business online similar to dropshipping if this is something you really want to do, there are better ways.

Let’s start by understanding the drop shipping business model.

•    You’ll need to get a business license and a sales ID because most wholesalers will not with individuals who are not properly registered businesses.  You may start with a sole proprietorship.

•    Then you place the products you want to sell on your site.

•    When a visitor to your site purchases a product you process the payment.  This means you will need a payment processor like paypal or a merchant account.  Issue the receipt or invoice and send it to customer.

•    Send the order to the drop shipping company with whom you have a relationship already.

•    The wholesaler or distributor packs and ships out the product and you can make arrangements so that the papers are customized using your company’s names and not the drop shipper’s.

•    Now, it’s time to send the payment you received from the client plus the shipping and handling to the dropshipper minus your profit.

•    If there’s a problem with the shipment or with the product, You are responsible for handling it.  So, this requires a lot of additional work and risk.

Well, I wish that by now you’re starting to see what I mean by  a drop shipping business is a rather risky than a frisky business deal.

Of course, in this biz model you don’t need to spend on stock nor space to keep that stock.  But, how much is it worth it?  And, more and important thing:  with this model your margins are very small.

I think that probably one if not the only way to benefit from this business model is to sell big ticket items.  Try making some numbers and I believe you’ll agree with me.  Remember to take into consideration your time and effort promoting the products online if you want to sell something.  Time is money too.

Keep following me here in this section as I will keep adding articles about this biz model and how to best tap into this opportunity.

Learn about the real risks, challenges as well as, advantages and real potential of this kind of biz.  And, finally discover alternatives of this kind of biz that could well pay off your time checking them out.

So, is a drop shipping business a frisky kind of biz or a rather risky deal?  Discover it soon!