Varieties of Drop Shipping Companies - Come up with a Smart Decision In Choosing a Drop Shipper

It would appear that everyone today has discovered a means to earn good money online or even a full time living that could have the big business men in the rest of the world jealous. So, you've decided that it's to time and energy to get caught up in the race and take your big slice of the pie too. (Why not? Even eighteen yr old teenagers are going to do it.) Going to find your path of online success you scoured the web and bumped in to a rather attractive term called "Drop Shipping"; an easy way to start out selling products on eBay or an web store without worrying about stocking or shipping, now you're itching to give it a try. But permit me to hold you back here. Before making the leap and begin drop shipping with the first company you found on Google, you should have a minutes time and energy to learn who this drop shipper actually is. Obviously you understand presently exactly what a drop shipper is, nevertheless the question you require answered is who the drop shipper is. Is he a manufacturer? Is he a wholesaler? Or is he a intermediary? To comprehend who your drop shipper is, you must know just how the Supply Chain works.

The Availability Chain commences with a Manufacturer - the one who produces the merchandise from raw materials. Let's imagine there is a demand for hiking boots in the city called Hikers Top. A Manufacturer will see that demand and initiate manufacturing a huge bulk of hiking boots from raw materials like leather, cloth, rubber etc. Now, ever since the Manufacturer is indeed caught up in finding raw material supplies for production and busy running his factory, he doesn't have enough time or money to get up a shop in Hikers Top and then sell his boots right to the general public himself. So he actively seeks a Wholesaler that will purchase his hiking boots in large volume bulk for, let's assume, $50 a case (one case=12 pairs of boots). This prices are the Manufacturer's Wholesale Price.

However, this Wholesaler will not likely sell the hiking boots straight to Hiker Top's public either. He is a Distributor which will distribute the hiking boots to numerous Retailers. He is the individual that links the Retailer with Manufacture. This Distributor does business with one or many Retailers who may have shoe stores in Hikers Top city. A shoe store Retailer will buy truck plenty of hiking boot cases from the Distributor (Wholesaler) for, let's assume again, $100 an instance. The Distributor makes a profit of $50 per case.

The shoe store staff will unpack each couple of hiking boots from your cases and display each pair to market for the price tag on $20 a pair. The Retailer sells thousands of hiking boots to Hiker Top's public mainly because it was only anything they were seeking and they also love the boots. The Retailer will make a nice profit of $140 per case bought from the Distributor ($20 x 12 boots within a case = $240, minus $100 which he given money for every case). The hiking boots achieve the end-customer and everyone in the supply chain gets anything they were looking for.

They are the basic elements of an average supply chain. (There might be many people in real life that can come somewhere between, however, you get the picture). Anyone of such "links" from the chain can be your drop shipper, but how can you determine which happens to be which? Typically, there are 2 forms of drop shippers:

1.Aggregators

2.Manufacturers and distributors

As someone planning to sell on eBay or an web store, You happen to be Retailer - the next link inside the supply chain who sells products for the end-customer. Obviously, you can expect to supply your merchandise from either the wholesaler or from the maker. You might realize through the above example that manufactures and wholesalers by nature sell merchandise in bulk, but, since the development of e-commerce many manufacturers and wholesalers have begun to offer international shipping stores to smaller businesses.

Alas, this kind of REAL drop shippers are tough to find. That is why a whole new "link" found its strategies the supply chain, that may be, the aggregators. Aggregators create sites and show tens of thousands of products you are able to choose from through their virtual inventory. I say "virtual" because they don't actually have those products stocked with their physical warehouse. They merely find a bunch of real wholesalers offering drop shipping and make an arrangement using them. These are in place the center man. Like a retailer looking for products to get drop shipped you are able to visit the aggregator's site, choose a variety of products you would like to display inside your e-store, and then sell those to your customers. Afterwards you find the product from your aggregator and yes it takes care of the handling and shipping. These aggregators usually are not scammers; they merely make your tough job of getting hold of real drop ship wholesalers simple and charge for that service, while offering some added value.

Now you know that a drop shipper may either be an aggregator (intermediary) or possibly a real manufacturer or wholesaler, the question is which type of drop shipper to choose? Up till now it may seem clear that when you source your products or services from an aggregator you are aware that he or she is NOT the actual wholesaler, but instead a middle man, so he will naturally mark within the price to the merchandise. But when you are lucky enough to find a real wholesaler who seems to be willing to drop ship for you, or moreover, a drop shipping manufacturer, you will get a much more competitive price to your particular merchandise. You will get a price that is even closer to the wholesale price (needless to say, there are other constraints in drop shipping that means it is almost impossible to get a true wholesale price even coming from a real wholesaler.)

I believe now you will end up questioning: Why would anyone drop ship his products from an aggregator (intermediary) when you are able find a better price from real wholesalers? The perfect solution, as mentioned before, is that it is quite a bit difficult to find a manufacturer or real wholesaler that will drop ship for a small online business. That doesn't mean you can find only a tiny amount of true drop shipping companies. There are many manufacturers and wholesalers who do drop shipping, however they are hard to find in simple free Google searches mainly because they normally don't advertise their drop shipping service like aggregators do. For this reason you will need the assistance of "product sourcing sites" like Worldwide Brands or SaleHoo which help you interact with real drop shipping companies. In order to pass across the aggregator and acquire a much more competitive drop shipping price by directly connecting with the real wholesaler, then taking assistance from sites like SaleHoo and World Wide Brands is a great method of doing it.