What is Drop shipping
A technique in which the retailer does not keep goods in stock, but instead transfers customer orders and shipment details to either the manufacturer or awholesaler, who then ships the goods directly to the customer. The retailer make their profit on the difference between the wholesale and retail price.
Drop shipping allowed companies to have people selling their products by distributing their catalogs, knocking on doors, and recommending their products to friends, family, and neighbors… Without the overhead costs of traditional employees.
With drop shipping, companies wouldn’t have to provide benefits such as insurance, retirement plans, etc. and companies would only pay out commissions. This was ideal because a company would never have to pay for a salesman who wasn’t producing results and could grow a huge sales force without any financial risk.
But the key element to drop shipping was, and still is, a secured market. The companies above sell products exclusively through personal sales reps and do not sell in retail outlets, to wholesalers, to the public. This is what makes them work. The prices, distribution channels, and markets are all tightly controlled.How can drop shipping benefit you.