Drop shipping is selling products on a website or 3rd party site (e.g. eBay) then contacting a supplier to send out the products.

For example, you have a website with tons of products, but the physical stocks of those products aren’t actually held by you. When someone buys a product from your website you will then email (or automatically integrated with your supplier) your supplier for them to send it out the customer.

The customer pays you for the order, then at the end of the month you pay the supplier.

A positive part of drop shipping is you don’t need money upfront to invest in inventory.

However there are some issues such as:

* – Potential lack of transparency of stocks levels with suppliers

* – Products might be delivered late

* – Unable to build your brand

AMAZON FBA v.s. DROP SHIPPING

Amazon has its form of distribution called FBA (fulfillment by Amazon), where you send your products to Amazon, they store it for you, dispatch it and Amazon takes care of the customer service for you.

Just like drop shipping you no longer need a warehouse to stock your inventory.

Amazon will do it for you.

USING AMAZON AS DROP SHIPPER

If you are looking at building a real business with a brand of your own, you are better off investing in stock to build your own product line of products.

It does involve more upfront investment, but has greater long term results.

If you are low on funds and wanting to get a quick return, then using Amazon as a drop shipper and taking orders via your own website is definitely an option.

OUTLINE OF THE EPISODE

[02:11] Drop Shipping Issues

[03:30] Amazon FBA vs Drop Shipping

[04:35] Setting Amazon as drop shipper

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