As a newbie, the whole process of selling online is all too unfamiliar yet alone some terms or words. Words may be too technical to comprehend or too jargon - does not ring a bell at all! Word of the Week will be updated regularly to help us understand these words more or refresh our knowledge. It's time to broaden our vocabulary! :)
Word of the Week: Dropshipping
Drop shipping is a service provided by some wholesalers, where they will package and ship merchandise directly to the buyer on behalf of the retailer. The retailer transfers the customer's order to the wholesaler, who takes all the responsibility for storing, packaging and delivering the item in return for a handling fee.
Because drop shipping involves the retailer purchasing items one at a time from the wholesaler, drop shipped items – although generally discounted from the retail price, will not qualify for bulk wholesale discounts. This can make drop shipping difficult on some marketplaces such as eBay because if other sellers are offering the same item, but have received a bulk buying discount, you will not be able to compete with them on price.
For this reason, drop shipping items from your own website, rather than on eBay, is a much more profitable option for retailers.
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