by Brian Lamacraft

Created on: April 17, 2009

Drop shipping can be an inexpensive way for a new home based business to get going and make some profits. With drop shipping you don't need to stock any inventory. You use another supplier who will ship your customers orders for you.. There are several advantages and disadvantages by using this method. I have used drop shipping before to sell products on eBay.

Constant Supply Of Products

With drop shipping you always have a constant supply of products you can sell. If one product goes out of stock you can just change to another product and continue. Most drop shippers offer new products an a monthly basis so your selection of products is always changing. You can even use multiple companies and have a huge selection of different products you can sell.

No Space or Inventory Concerns

With a regular retail space you have to make sure you can afford the space and you need to be able to store all your products. With drop shipping you don't need any space as your products are stored at your dealers warehouse and shipped to your customers when you place an order through them. You also don't have to count your inventory which saves you valuable time and money.

No Shipping Or Mail Hassles

With drop shipping you don't have to package your item and take it to the mail office. There is no need to waste gas or sit in long line ups to get your items mailed. There is no cost for envelopes, packing tape, mailers or other shipping materials. All your shipping costs and deliveries are done through your drop ship suppliers.

Significant Savings

With drop shipping you have no rental space to pay for. You don't have to pay employees or ship your products to anyone. The only costs you may have are drop ship fees you pay to your suppliers. You can add these costs onto the price of your goods and save on the fees.

Slow Shipping

Despite the advantages there are several glaring disadvantages. You may come across drop ship companies that take forever to ship your orders out. I have had this problem in the past and it has cost me sales. You may get angry enquiries from your customers and even lost sales opportunities due to the slow shipping from the supplier. If you are just starting out and if you are using a site such as eBay this can be quite damaging to you.

No Quality Control

When you have physical inventory you can inspect the goods for quality control. You can pick the best items to sell and keep the damaged ones out. With drop shipping you have no control over your products and the quality of them. Your orders may get damaged in shipping, sent with missing pieces, wrong color, or size. You are left with these problems and angry customers. If you had inventory you could immediately ship out a replacement for the customer. With drop shipping you need to place another order and even if you contact your supplier there is no guarantee they will get it right the second time.

Sudden Inventory Changes

You may have many orders for a particular product from your supplier and suddenly find out that product is no longer available, backordered for several months or discontinued all together. You are left with orders you can't place and customers who are waiting for them.

Drop shipping is a personal business decision that you need to make for yourself. It can open up many opportunities for your business and at the same time give you mountains of headaches and hassles. You can search the internet for suppliers and contact them directly.

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