Is Drop-Shipping the Best Small Business to Start?

Drop-shipping could very well be the best small business to start because of the minimal start up costs and limitless profit potential.

For those of you that don't know what it is, drop-shipping involves selling goods on auctions without having them in stock or needing to send them to your customers. In essence you can buy something at the wholesale price, sell it at the retail price and take the profit without ever physically handling anything.

You take care of front of house by setting up the sales and marketing side of the business. Another company takes care of the back office operations and logistics.

The Web Dictates The Best Small Business To Start

The Internet has made this possible. This relationship can be co-ordinated smoothly and efficiently from a computer anywhere in the world. Because of this it is simple to set up a business like this. The start up costs are low and so there is no need to make a huge investment. It is a virtual operation and so doesn't need an office and staff etc. so could be considered the best small business to start.

Once you have your eBay account and you have contacted and agreed conditions with a drop-shipper then you can start posting auctions.

1. When someone wants to buy one of your listed products and makes a payment then the drop-shipper receives the order through you.
2. The drop-shipper sends out the goods to the buyer and sends you the tracking number.
3. When the buyer receives the order they pay you.
4. Then you pay the drop-shipper.

So, your risks as the seller are minimised as you only pay your costs after you have made the sale.

There are thousands of drop-shippers about, many of whom are based in China. The fact that China's labour costs are so low means you can buy products direct from the manufacturer and sell them at a lower price than other shops. And you still make a profit. It is what the big corporations have been doing for years now. But in this case you don't have to pay to ship the goods to your country, you don't have to pay rent on a premises to store and display them and you don't have to pay staff to sell them.

The Reason This Could Be The Best Small Business To Start

The reason this is possibly the best small business to start is the ease of set up and the massive size of the eBay market place. The site has about 150 million active users and the transaction volume amounted to over $35 billion dollars last year.

There are over 1.5 billion page views per month. It doesn't take too much thinking to realise the potential of all those visitors looking to buy things. You have access to all those potential customers.

Don't underestimate the power of this model. You can have what is essentially a massive department store with almost no overheads. Because of this you can undercut real bricks and mortar businesses by offering more competitive prices.

More and more people are doing their shopping online and so the number of people visiting ebay continues to get bigger and bigger. The trick to making a lot of money in this business is getting people to actually view your auctions. Actually, getting those eyes on your pages is what will make the money come rolling in for you.

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