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SpinDistribute.com Article Directory

The following article was published in our article directory on January 7, 2014.
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What is Dropshipping?

Article Category: Advice

Author Name: Dalmahoy Partners

There is no doubt that the internet has opened up a lot of opportunities for money making. And among the popular options today is dropshipping. But before you undertake this type of business, you must understand first what exactly it is.

Basically, it is one of the more famous business models nowadays where the sellers or dropshipping business owners sell the products but they do not keep the supplies in stock. What they do instead is pass the order of the customers to the suppliers. The latter will then be the one to dispatch the products to the particular client.

So in essence, this is more about being the middleman between the suppliers and the client. The dropshipping business owner will then make money through the mark up in the prices. This is the cost difference between the prices for "buying in" and selling out" the product. Perhaps you are familiar with eBay. This is one of the best and most successful examples of a dropshipping business.

Given that, this kind of business will let you have thousands or even hundreds of thousands of customers without having to go through the complex process of handling supplies, products and inventories. Yes, you can make thousands of dollars and even more within a short span of time without even having to touch a single item.

But of course, dropshipping also has its own drawbacks. You have to weigh these against its advantages to see clearly if this is the type of business you should invest in. To help you with that, here are some of the pros and cons of running this type of money making venture.

The pros

First up: the benefits of dropshipping. There is the great advantage of not having to spend a lot of of time and effort in order to develop a particular product. You will only sell ready-made goods from manufacturers.

Second, you do not have to handle storage. That means there is no need to spend money for the operation and maintenance of a warehouse. You also do not have to stress yourself out with thinking about how to have capital or money for stock supplies. At the same time, there is no need to fret over unsold products and the risks as well as loss therein.

Lastly, you do not have to involve with the process of shipping which can be complicated. All you have to do is focus on marketing and sales-and that is where the money actually is.

The drawbacks

Now, for the disadvantages of dropshipping. First of all, you do not have ownership of any product. You will be fully dependent on the supplier. You are under their terms. Even in terms of delivery and customer service, you will be dependent on others, too. Hence, you will be entrusting your reputation to them.

This brings you to the next point that there is no exclusivity. Since you have no ownership of the goods, others can sell them as well-even at lower prices and with other promos and gimmicks if they wish to. So be prepared for competition.

Keywords: Making Money Online, Affiliate marketing, dropshipping, online investing advice

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