The Pros and Cons of Dropshippng

Drop shipping has become a very popular form of sourcing products because it allows you to pay only for the items that you sell.

For those of you not familiar with "Drop shipping" let me enlighten you .

To put it in simple terms "Dropshipping" is selling items for someone else.
First you find a supplier, lets say our supplier is an internet based company call JimmyToys.Com and they sell baby toys for a 0-5 year old.
You use the JimmyToys.com Website and research items that you would like to sell yourself.

Then Email JimmyToys.com to ask if you can set up an account with them. (sometime a one off admin fee can be incurred,as long as its a one off then this is ok)
When you have set up your account with JimmyToys.com they will give you permission to use their items to re-sell on your own website or Ebay auction shop (or however you want to sell your items). You can use their photos and item descriptions for the items you wish to sell and list them on eBay or your website.

Lets say you have listed an item on Ebay that you have sourced from JimmyToys.com and you have sold your item. You will have received payment via Paypal (recommended) and your ebay customer will be expecting their item in the next few days. All you need to do is email JimmyToys.com or visit the website and send payment to them (most good dropshippers will also accept Paypal) with details of shipping address of where you would like your item sent and the supplier will package it up and send it! (with no company logos on the paperwork).
Your ebay customer will receive their item/s professionally packaged and they will be non the wiser that you have drop shipped the item to them.

It's so simple.

1) Sell products to your own customer base;
2) Source from your secret low-priced wholesaler;
3) Your wholesale dropshipper sends the products straight to your customer;
4) Your customer receives the products "from" you and remains loyal to your shop.

The Pros of dropshipping:

You don't need to have a lot of cash to get started .
No minimum order .
You don't have to hold any stock or own a warehouse.
All postage and packaging is taken care of for you.
Save time as you don't ever have to handle any stock.
You only ever have to pay for the stock you sell, removes the risk of holding stock you can't get rid of.

The Cons of dropshipping:

'Out of Stock' You have no control over stock levels for the items you have listed.
You wont get a great deal on products as you are buying single items as opposed to wholesale.
You are still responsible for any shipping problems.
Hard to find a reliable distributor who will do it and do it well.