by RoxH

Created on: November 10, 2009   Last Updated: November 11, 2009

If you have been looking for ways to start an online business cheaply, then the chances are you have come across wholesale dropshipping. However, you may be wondering whether this is a legitimate business opportunity or simply another scheme designed to make a few quick pounds for people with questionable ethics, whilst you are left still searching for a way to start your own business at home.

Firstly, let's clarify what dropshipping is; a dropship company sells products at wholesale price but allows you to buy individual units and to market their products before making a purchase from h Crucially, they will deliver the item to your customer on your behalf. This gives you access to goods at wholesale price but without having to spend money on stock until you have buyers. With a wholesale dropship company you simply market the product you would like to sell and purchase the items as and when you make a sale, having it delivered directly to your customer.

On the surface this idea looks too good to be true. Why would a company allow you to sell their products without actually making a purchase? Why would they pay to store the products and then offer them to you at wholesale prices?

Well, the answer is simple; offering dropshipping services as well as, or instead of a standard wholesale service gives smart wholesale companies the opportunity to sell more products. By offering a dropshipping options they instantly make their business appeal to a much wider market - think about how many people are out there looking to start a business from home, with very little financial commitment; many people who could never afford to buy wholesale stock, or would not be willing to take the risk of investing in stock they may or may not be able to sell on suddenly see online retailing as a viable business idea if they have the chance to make money without any upfront financial commitment.

So, whilst there may be extra running costs for a wholesale company that offers dropshipping, it is greatly outweighed by the benefit of the additional income stream. The profit margin of dropshipping may be smaller than of simply selling wholesale, but the market is bigger, so less becomes more.

Now, the next important question to ask is whether dropshipping can provide a stable and sustainable basis for an online or home based business. We've established that dropshipping is a genuine business concept but we need to know that it works in practice. For dropshipping to enable you to build an

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