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Dropshipping has been around in the USA for a few years, but is relatively new in the UK. The problem with setting up an Internet shop is having the money and room to stock the goods in the first place. Also if the goods don't sell well, the trader can be stuck with them. This is where a dropship company comes in. They stock a range of products and sell them at wholesale prices. The trader then sells the goods on the Internet, often on Ebay at a higher price. When a customer places an order for a product, the trader places this order to the dropship company who then delivers the product directly to the customer in plain packaging so they are none the wiser. In summary, the trader uses the dropship company as their warehouse, who can ship out small orders directly to customers.

The main advantage of dropshipping is it's virtually risk free as you need hardly any outlay to get started. The main disadvantage is you're not in full control and things can occasionally go wrong, Example 1) The item is out of stock or delayed after the customer purchases it on Ebay. Example 2) The product is faulty and you then have to liaise with the dropship company to arrange a replacement, if you refund immediately, you can be out of pocket.  Problems can of-course cause bad feedback on Ebay, if the Dropship company provides a poor service, you're the one who is responsible in the eye of the customer, it's very important to remember this.

If you want to start making money from dropshipping, you first need to seriously consider which dropship company or companies you're going to use along with what products you're going to sell. For the reasons written in the above paragraph, it's very important you choose a company that provides an excellent service or you will get the blame from your customers. Some dropship companies charge joining fees or subscriptions, other charge deposits, while a few are totally free. Some dropship companies have competitive product prices, while others are more expensive than you can buy on Ebay anyway. Unfortunately I'm yet to find a totally free dropship company that is very competitive, but joining fees are normally affordable, many are less than £100, but often less than £30 or even £10. I tried one company that charges £2.95 a month, see http://www.supreme-dropshipping.co.uk.

Watch out as some companies call themselves Dropship companies yet are really middlemen that mark up the prices between the trader and a real dropship company. Real dropship companies buy their goods directly from the manufacturer. Research your dropship company well, read reviews Etc. and if possible check their product rates with current prices on Ebay Etc. Some dropship companies don't tell you most of their prices unless you join, I can understand why to some extent, but it's difficult then to decide if they're competitive. If they're not competitive, they're not worth using, so I'd ask them for an example price list before joining, if they refuse, I'd choose someone else.

You also need to choose your products very carefully and how you're going to sell them. If using Ebay, I recommend you use an Ebay shop, the basic shop is just £6 a month with a 30 day free trial. Remember when marking your price up for sale, you need to consider all costs involved, including product cost, postage, Ebay fees Etc. and often Paypal fees.

If you decide to use Ebay, designing sales pages can be quite time consuming if you're selling lots of products. I recommend you download and use the Ebay Turbo Lister, it's totally free and makes this job much faster. Most dropship companies allow the use of their photographs and text for selling, but some go one stage further and include CSV files that can be imported directly into the turbo lister. You then get everything you need to list the items on Ebay, all done for you. If you do import CSV files, check through each item before submitting, often important things need to be changed like your Paypal email address fore instance. You may like to alter or customise the listings to your needs too.

Finally there are already more people trying to make a living from dropshipping than there is money to go round. Like affiliate marketing, making money from dropshopping is likely to become more saturated as time goes on. Eventually it will be hard for all but well established companies to survive. The earlier you start up your business, the more chance you'll have of succeeding. Most people will unfortunately fail or will only make a small amount, so you really have to work extra hard to swing the scales in your favour. As well as your product, price and customer service, success often comes down to how you promote your business as well as your ongoing reputation. I wish you the very best of luck and success in the future.

More information on dropshipping and lists of dropship companies:

http://www.dropshipblog.co.uk (More information on dropshipping in the UK)

http://www.dropshipblog.co.uk/2008/06/02/free-dropshipper-list-uk-dropship-companies/#more-40 (List of free UK dropship companies)

http://www.uk-dropship-directory.co.uk (Information on UK dropship companies and more)

http://www.uk-dropship-directory.co.uk/auctionsites.htm (A list of auction sites in the UK to sell your goods)

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This entry was posted on Monday, June 16th, 2008 at 4:14 am and is filed under Dropshipping, Money Making & Saving. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.