A question I am asked almost on a daily basis from those who find this site and contact me is, "How does dropshipping work?" I want to take a few paragraphs in this post to explain how it all works.
After deciding what kind of a product you want to sell, and after
having found a supplier (assuming all relationships are set in place)
and you are ready to sell on your website, and the orders are coming in
- hopefully - right? WELL WHAT NOW???? When setting up the relationship with the dropshipper you should have found out a couple things:
- Do they want you to email your orders?
- Do they want you to fax your orders?
- Do they want you to phone in your orders?
- Do they have an online account set up for you where you can place orders yourself?
You need to make sure you are asking them these kind of questions as this is the first step in making sure your dropshipping
goes smoothly. Once you have figured out what method they prefer, then
you go ahead and place the order. I usually give the credit card a
couple days to clear before contacting the suppliers with the order
(just to be safe) so on my website I usually say in the shipping area
that it takes about 2-3 days to process and give 7-14 days for shipping
(again just to be safe).
So you do not have to ship out the product yourself. Once you place the order with your supplier they handle everything else for you (thus dropshipping).
You do not need to worry about storing product in your home, or
figuring out what way is going to be best to ship, that is all done
with the dropshipper already.
Once the credit card has cleared and they money is in your bank
account, you now have that money to place the order with the supplier.
Usually you will have an account with them where you pay them on a
NET-30 (or every 30 days you pay your bill with them). Also, some have
you set up with a credit card, and just charge that card. Then you are
left with the profit. You do not have to worry about inventory or
shipping arrangements - that is the true beauty of dropshipping!