Drop Shipping is selling goods from wholesalers to the end customer all the while you never see the product as the supplier ships the item to your customer.  Here is a example.

*You decide that you want to sell a umbrella  for $10 that your vendor carries and cost you $5. So you sell this item in a online auction or maybe on your own website. You collect the payment from the buyer.

*Then you contact the vendor and pay them and inform them of the sale and the shipping information. Then they ship the umbrella.

As you can see drop shipping can make allot of sense because you are not purchasing all the inventory and having to store it or ship it.

We have put together a list of pluses and minuses for drop shipping.

First the minuses.

*Drop shipping can be more expensive than buying the items and storing the items your self as you have to pay for the labor and material in shipping. This can cost a few dollars.

*Any and all shipping issues are still your issue.

*Finding a vendor(s) you can trust and to do the shipping up to your standards can be tuff.

*You can’t take advantage of bulk discounts.(unless you find a company that offers light wholesaling)

*Trusting your vendor to have sufficient inventory when you need it.

Now the pluses of drop shipping.

*Very little start up cost.

*You do not need to hold on to inventory (saves you carrying cost).

*No need to pay for packaging materials since you are not shipping the items.

*You can be open for business very quickly

*You are not running to the post office to ship items.

*You can sell hundreds of thousands of items.

Here are some other things to remember.

*Get paid before you contact the drop shipper. Pay Pal is the most used option for this. Just remember that using Pay Pal will dig into your profit as there is a fee to us Pay Pal.

*Ask other sellers about there drop shippers to find out who they use. Some people will not disclose there drop shippers and some do not want anyone else to know that they have a solid drop shipper.

*Try to establish a good relationship with your drop shipper by speaking to them at least once a week to check on in stock levels as your drop shipper may not tell you when they are out of stock on a item.

*Make sure you include your return policy on any listings.

*See if you can work with your drop shipper to add some personalization to the shipment by using your logo or maybe they can put a personal thank you note in the shipment.

*If you decide to start a website for your business instead of only selling thru ebay than you need to ensure that your provider can handle it. Some of the best and cheapest are godaddy.com or 1and1.com .

*There is also a option to use a provider like Build A Niche Store (BANS). They have nothing to do with drop shipping but we think it is a unique opportunity. They are unique in the sense that they give you a script to put on your website so you can earn money from eBay’s affiliate program with BANS and the program is very user friendly. But remember that you must already have a website setup and hosted. Simply put you BANS takes items already on ebay and put them on your website. When someone buys one of the items from your website ebay pays you a commission. BANS is NOT a drop ship service.

for more information visit http://www.dropshippingbasics.com