Dropshipping is a supply chain process where instead of a retailer be it a mail order company, eBay seller, amazon seller or e commerce store operator sells products but does not maintain a physical stock of the product that are sold. Instead once an order has been received, orders the same products that the customer has requested along with the shipment information to either a wholesaler that offers a Wholesale Dropshipping service or a manufacturer that offers a Dropshipping service, who then dispatches the products directly to the end customer. As with any other retail businesses either online or offline, most retailers will make their profit from the difference between the cost or wholesale price and the resale or retail price of the product.
Not all retailers using the Dropshipping process will sell online. Some retailers will have a traditional high street shop where they have one of each of the products on display, this way the customer can have a better look at the product before purchasing it. But by far the majority of retailers using the Dropshipping process will either sell products via website and internet or by using a catalogue.
Retailers using a Dropshippers to fulfill their orders will not want their customers knowing that a wholesale Dropshipping company was involved in the process, and make sure that the Dropshippers use a blind shipping method when orders are processed. This means making sure wholesale Dropshippers you use does not put any return address on the products dispatched. When you first start using a dropshippers it may be worth your while ordering a produt and having it sent to yourself or a friend. You will then be able to confirm that it is corectaly packaged and the Dropshippers have not placed there address on the parcel.
Another option is by getting the wholesale Dropshipping Company to either put a complement slip with your business details or have your address listed as the return address, this then reinforces your involvement in the sale of the product. The dropshippers will normaly charge a an additional fee to cover printing, stationary and additional labour costs for doing this, but it should not cost much. Anything over 10 pence per insert would be starting to get excessive.
There are two main benefits with using a wholesale Dropshipping supplier; the first one is that by using a Dropshippers you are creating a positive cash flow cycle for yourself. For example you are using a Jewellery Dropshipping company. You get to sell the piece of Jewellery for say £20.00 plus £3.00 postage, your customer pays you the money and gives you the delivery address. You now have £23 in your account. You then go to the Jewellery Dropshipping website and order the same Jewellery item for the wholesale price of £6.00 plus £2.50 postage; you give the Jewellery wholesaler the £8.50 wholesale price and keep the £14.50 profit. Throughout the whole process you have not had to use any of your own funds for the transaction.
In addition to the positive cash flow the Dropshipping process brings. It also reduces your overheads and thus increases your operating profit. You do not need to invest in thousands of pounds to maintain your stock inventory, you do not need to pay out for rent and rates and utility bills to have the stock stored. In actual fact if you are just selling online, all you need is a desk or sofa and you can run the whole business from home!
One question that may come to you right now, is why would a Jewellery Dropshipping company or a wholesale Dropshipping company want to supply me with single items when they normally wholesale in bulk? Well at first glance it doesn’t look worthwhile for a wholesaler to get involved. But look a bit deeper! A retail high street shop may place an order for £300 each week with the wholesaler then sell these products to 50 customers that come into the shop. But these days more and more people are buying online so now the online retailer has 10 online sales a day over the week and places 50 orders through the week totaling £300plus postage. The wholesale Dropshipping Company sells the same amount as the wholesaler, but as times continue to change more and more people will order online, the online retailer has a growing customer base and there is no limit to how many customers could find his online store and it is possible for fifty customers to buy something all at the same time. Yet the high street shop will have a limit to how many new customers will find his shop and also how many can fit in it, and it is not possible for a person to serve 50 customers all at the same time. So ultimately by offering a wholesale Dropshipping service benefits the wholesaler.
Many of the sellers that use the online auction websites like eBay use wholesale Dropshipping Company’s. Many of the items that are listed as new are from a Dropshipping source. A retailer is allowed by eBay to sell products that they do not have in there possession as long as they follow the eBay policy with pre sale items
At first the majority of wholesale Dropshipping companies were based mainly in the US but during the last 10 years or so there have been more and more UK Dropshipping companies set up. UK Dropshippers has been around since 2004
There are some risks involved with all businesses and Dropshipping is no exception. As with all suppliers throughout the supply chain industry, there is a risk of products being sold out and back orders may happen. Sometimes a product can sell out and this may be unavoidable. For example you could get an order 50 gift products for a party; you go to the gift Dropshipping Company and manage to order the last 50 of these gifts. Next minute someone else has received an order for 1 of the same gift products, they go to the gift Dropshipping Company but they have now sold out. It’s no one’s fault really as no one could foretell that someone would buy a large quantity in one go. It wouldn’t be fair on you to limit your order and risk you losing the whole sale. The gift Dropshipping Company couldn’t know he would sell out of that product that day, and the unlucky disappointed customer didn’t know that it would sell out just before he placed his order. It’s an awkward scenario but can happen thankfully not often.
When an item sells out it can look bad on the retailer that cannot complete the sale, especially when selling on somewhere like eBay or amazon. A good wholesale Dropshipping company will keep retailers updated, but ultimately it is the retailer’s job to be aware of the quantities available from the wholesale Dropshipping Company. At UK Dropshippers we try our utmost to avoid this happening by not listing our whole stock availability. We hold 1 or 2 of each item back just in case we sell out as someone has an order going through. It’s not foolproof but it helps. If we do run out of a product we will offer to upgrade the item to a slightly more expensive one (at our expense) we also have a stock sheet with up to date stock quantity on our website here. Stock sheet
As with many successful business sectors there are people out there trying to take advantage of the unwary.
Dropshipping is no exception. One thing to watch out for is the Dropshipper who charges a fee to use their services! Do you pay to get in to the grocers to see if they have anything you want for tea? Do you pay to get into the newsagents to see what they have? Do you pay to look round the wholesalers to see what products they have? Well I have never had to. So why would anyone pay to open a Dropshipping account? Any reputable wholesaler or Dropshippers would have no objection with any potential customer viewing there products and seeing there wholesale Dropshipping prices. That is except for those businesses that want to make money from subscriptions instead of products. Most of the time, once you pay a fee and sign up with someone, you find their prices are more like retail than wholesale. This is usually because they have decided to set up a fancy website and pass themselves off as legitimate wholesale Dropshippers, when in reality they are middlemen who just pass your order over to the genuine Dropshippers. They have no products of their own, they are simply a go between the retailer and the real gift Dropshipping company. The prices they charge will leave little room for profit. They are not bothered how well your business does as they can make a good profit from the fee they charge to use their service.
Always ensure that the Dropshipping company that you use be it gift Dropshipping, crystal Dropshipping, Jewellery Dropshipping or any Dropshipping is a FREE Dropshipping supplier, this does not mean free stock. You need to be using someone that has a free Dropshipping service. A genuine wholesale Dropshippers makes there profit from the repeat sales to retailers. So for the wholesale Dropshippers to be successful they have to be continually supplying successful retailers, and the only way that can work is by selling at genuine wholesale prices so the retailer can grow the retail business.
At UK Dropshippers we have a Free Dropshipping service. We do not charge anything to set up an account, we do not charge you to look at our prices and we do not charge you to use our images and descriptions. We do not charge you extra for postage either. All you pay is the wholesale price for the products, postage at the current royal mail published price and 20 pence towards the outer packaging and protective filling. That’s all. If you order multiple products to the same address the postage will be calculated for the combined weight and the postage for that weight will be charged.
UK Dropshippers are a free Dropshipping company offering Wholesale Dropshipping, Jewellery Dropshipping, gift Dropshipping and Crystal Dropshipping. We have been wholesalers in this trade since 1989 and have been offering a wholesale Dropshipping service since 2004.