Drop shipping is a method of not carrying an inventory, but still selling products…usually online.  You take orders and pass the delivery information on to your wholesaler who takes it from there and ships the product for you.  You pay the drop shipper their wholesale price and pocket the profit.

Drop shipping has its advantages.  You gain savings in inventory taxes, the costs of maintaining a warehouse, and a low cost of going into business.  This is why drop shipping is very popular online.  E-commerce thrives on ease of use, so drop shipping has gained popularity in recent years.  The barriers to start a business and the instant sales that the internet offers have caused a jump in drop shipping.

A successful e-retailer does not just look up a directory and start a website.  You have to plan appropriately.  Do the research necessary to know if there is a market for the product.  To help you learn how to drop ship here are some tips.

Find a reliable drop shipper.  Check references and the Better Business Bureau.

Find out how to use the drop shippers tracking system and track all shipments.  Make sure you know how long it takes to deliver an item.  You want to know this when customers inquire.  Be sure to know this information at holidays.  No one wants to have a Christmas present delivered late.

Communication with your buyer is essential.  If there is a snag with delivery let them know instead of waiting for them to contact you.

Beware of scams.  Start your business slow until you are confident in a drop shipper.

Fit into a niche.  Small under served markets are more apt to pay off for the little retailers.

Use multiple drop shippers.  This will help you get through if one is out of inventory or has better prices.  Try to order enough to get the best discount you can from a drop shipper.

Know the drop shippers return policy so that yours mirrors it.

Test your drop shipper.  Send yourself something and see what happens.

Don’t list an inventory number on your site.  Your drop shipper may have that many on hand, but they ship to more than one customer.

Have plenty of free and useful information on your site that you update as often as possible.

Keep these tips in mind as you go about starting a drop ship business and you will be successful.