Bootstrapping

Drop Shipping 2020

So what is Drop Shipping?

Drop Shipping is when a website displays your product for sale, but does not buy and stock it in advance.  They sell it “like” they have it in stock, but in reality, they send you the order and have you ship it.

Win Win for sure!

What is so great about drop shipping?

It’s awesome that other people are marketing and promoting your brand while you are doing other things that require your attention.

And you get the exposure to their mailing list!

Be sure you have done your due diligence in reference to the merchant – be sure you like their website, feel it is the right place for your product line to be sold, and I’d be sure to check out their marketing techniques and be sure you are satisfied with their business practices before you sign on the dotted line.

This relationship can work out nicely if you just offer to split the retail price 50/50 plus shipping costs.

The website retailer will usually email you an invoice to put in the box and then can Venmo or Paypal you the 50% plus the freight charges before you ship each day.  If you prefer to keep their credit card on file, you can download the sample authorization form below.

If you use a fulfillment house you might want to charge the extra fees to the store to cover the pick and pack fees involved so it doesn’t eat into your margins.

Download Drop shipping guidelines 2020

Download sample credit card authorization form 2020

 

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Written by Sarah Shaw

There are 3 comments

  • I need clarification on the process. If the seller and I split the transaction revenue 50/50, then the amount I keep is the same as if they’d simply ordered from me wholesale. On the seller’s end, the amount they keep is the same as if they had ordered it wholesale but then sold “at cost,” as opposed to a retail markup of 2x, *reduced by* the amount of freight expense for individual pieces instead of bulk shipping. Great for my end, but sounds more like a loss than “profit” for their end. All they have to show for doing business with me is a new transaction on their stats, and they avoided touching/storing my product in their store or warehouse. Is that enough to be worth it for them? Am I missing something?

    • Sarah Shaw says:

      YEP. Selling stuff as a drop shipper is very beneficial for the stores as they get to sell for free, collect money and split with you. Not rocket science… pretty simple. Not missing anything. They put your stuff online, sell it, collect money, you ship it, they pay you 50% plus shipping.

  • Christoffer says:

    Great article Sarah. Very in-depth and thorough.

    Regards,

    Christoffer

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