Is drop shipping a legitimate business?

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United States United States
gaylahenry
Kudos: 19
Joined: Jul 12, 2015
Is drop shipping a legitimate business?
16 Jul 2015
I saw a post about drop shipping. I was curious if it was a legitimate business? Before I invest any money. I would appreciate any advice????

[Last edited by moderator: Moved to new topic from intros thread — 24 Jul 2015]
India India
satwik
Kudos: 26
Joined: Jul 28, 2015
Re: Is drop shipping a legitimate business?
29 Jul 2015
@gaylahenry - Hey,

I'm not sure how you would define "legitimate" as, but let me try to be as comprehensive as possible with my answer.

Yes, a lot of retailers definitely use drop-shipping in order to run their businesses. It simply entails going into a contract with a supplier, and forwarding all your orders to them, so that they can fulfil these orders.

Few reasons why a retailer might use this method:
1. Decrease inventory- When the supplier is fulfilling all your orders, you do not have to hold any inventory, and yet you're legitimately running your business.
2. Quick Time-to-market - Dropshipping eliminates the time required for the product to come all the way from the supplier through the distributor to your inventory before you can sell the product.
3. Broader product offering - Again, due to no inventory, you can get a multitude of suppliers to dropship products to your consumers, hence also giving your customers a wider choice.

I'm the Head Strategist at Sellers Commerce, an E-Commerce Solution Provider, and hence I can tell you with experience that our retailers' first choice is always drop shipping. Sellers Commerce provides a way for suppliers to upload their catalogs in our cloud so that the retailers can simply subscribe to them, pull in the product data, and start selling. Now, this is where the drop shipping comes into play. Due to all communication being on the cloud, it becomes easy to enable drop shipping for these retailers, and hence as soon as they enable it, all orders they receive on the store get instantly sent to the supplier who then fulfils it.

I've seen many retailers shift from the drop shipping method to a more inventory-based fulfilment process when their operations got bigger.

So I would say that drop shipping is quite a legitimate business, just until you have the actual capacity to store inventory, if that makes any sense. Do let me know if you have any more questions about it, and I'd be glad to help you out.
Herts, England United Kingdom
Andy
Kudos: 11,661
Joined: Jan 1, 2001
Re: Is drop shipping a legitimate business?
29 Jul 2015
Here's my take on it...

Drop shipping isn't any kind of business!

It's a product sourcing and order fulfillment strategy to consider alongside the many other ways of sourcing inventory and shipping orders.

You see sites selling the idea of dropshipping as a passive easy-money business in it's own right. That's not the case. Dropshipping is not a business on it's own.

To make it a business you also have to generate profitable orders, which is a whole different ball game from simply finding suppliers who will dropship.
Andy Geldman, Web Retailer
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