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eBay online auction drop shipping business

Make money without having to store any inventory

If you want to get into the online auction business and make a lot of money, you have to move a lot of inventory. But what if you don't have a large warehouse or even a large home to house the inventory? Can you still turn over thousands of items per month and make a huge profit?

The answer is YES, thanks to a supply chain management technique called drop shipping. With drop shipping the merchant doesn't have to keep any inventory on hand, instead they simply notify the supplier that an order has been placed and the item is shipped directly to the customer from the supplier. Usually the supplier is some type of wholesale warehouse or licquidation merchant. These suppliers will allow you to keep the price difference between the wholesale price and the retail price.

The major benefit to dorp shipping is as mentioned above no storage cost or liablility for inventory. However, another major advantage is that you should always always be able to operate with a positive cashflow. Since you are selling the itmes before you acutally have them you can collect the money from the consumer, place the order with the wholesale provider and pay with a credit card leaving you a positive cash flow to go along with your profit.

The major risk associated with dorp shipping is you have no control of your inventory. If a customer orders something that is not in stock at the wholesaler then there may be major delays in shipping to the consumer. This may reflect negatively on you as a retailer.

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