Old but new: The Concept of Dropship

A friend bought a watch online and recently received it.  I asked her how long did it take upon placing the order.  She said, about a week.  The site did explain that the regular / ordinary shipping period will take about 5-10 days.  So basically, it was right on time.

When I asked her where she bought it, she said it was thru an FB online shop.

My head is spinning right now.  I wanted so badly to have my own business that I have researched businesses that doesn't require that much capital.  An online shop really sounds good to me.  I wanted something that I can do right now, while I'm still working yet something profitable that will eventually make me work from home.

I have always wanted to have an online shop - for obvious reason - so I can work at home.  I don't need the hassle of renting a space.  Then, another concept popped out - DROPSHIP.

HOW DOES DROPSHIP WORK?

Here's an illustration:

From the diagram, you're role is the reseller.  Suppliers post their product at a certain price.  You then post the products in your site or online store with the mark-up price.  Once a buyer places an order thru your site, you then place an order from your supplier's site and let them ship it to your customer.

This had been very enticing.  I have been thinking about it, but still have hesitations.  Here's what I have learned so far.

PROS AND CONS OF DROPSHIPPING:

PROS:

• No inventory to think of
• Less commute / No shipping
• I can set up the business anytime

CONS:

• It's not easy to find a reliable supplier
• Some suppliers have dropshipping charges
• Since you don't have inventory, you are not sure if the suppliers still have stocks
• You need to establish a return/exchange policy for certain rejected products

Also when looking for suppliers, you also have to determine, how long have they been in the business, can they really provide the products you need, how long does it take for them to ship your products (immediate, after a few days), and how long will it take to receive the products. You MAY be consistent but your suppliers aren't.  

As much as I want to establish dropship business now, I can't really say I want to unless I try it myself.  I have bought stuff online and it had been a great experience.  However, I haven't bought anything from the same supplier twice, so I don't know if I would consider them reliable supplier, except of course for big conglomerates such as Amazon.

So if you really want to do drop ship, I would suggest: (which I would do as soon as I have the guts to start my business)

• Have a back-up supplier.  Look for more than one supplier.
• Suggest a reliable shipping company
• Establish a return and exchange policy
• Prompt in replying to my customers
• If possible, have some stocks on hand.  Not overwhelming amount, just enough.

If you are a supplier, let me know.  We might do business.