For many sellers out there, drop shipping is a starting point in their overall business plan, and it works a treat to get you some capital to get you up and running.
For some, it's a long-term way of doing what they love doing without taking any big risks.
Either way, all the retailers out there could do with some ideas on how to maximize their drop shipping profits, so here are some great tips to get your bank balance's bottom line growing.
Why are drop shipping margins so tight?
Quite simply because it costs a wholesaler more to provide drop shipping services. When you drop ship with a wholesaler, they are responsible for storing the products, insuring the products, and other associated costs like paying staff to retrieve, package and process single items.
Wholesalers already operate on very low profit-margins and rely heavily upon large volume purchases to make a decent profit, so when these additional costs are added, the wholesaler really has no option but to increase the price of individual items.
Reason number two is when you go to list your item, you will need to ensure you are competitive with others who are selling the same product, even the big boys of ecommerce. This means that your profits will take a dip.