Drop
shipping is a term coined for a supply chain management technique where the
retailer does not necessarily have to keep the goods or products in their
stock. But instead, they transfer the customer orders and shipment detail to
either the manufacturer of a wholesaler who then will ships the goods or products
directly to the customer.
There are a
lot of misconception regarding drop shipping. Due to the past and recent MLM
(Multi-Level Marketing) controversies that either directly or vaguely related
to Ponzi schemes or commonly known as the 'pyramid schemes', a lot of people are
skeptical toward drop shipping business.
But do you
know that MLM does not necessarily need emulate the pyramid structure?
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| Our business structure. |
How does DropShipping works?
Dropshipping technically means you become a reseller. This is the same concept as being a telecommunication SIM card or credit top-up reseller. The seller/ supplier would provide you with the products with discount prices, and you would promote, market, and sell them back to the customer at large. The idea is that the suppliers are using their reseller agent to expand their market without having to open subsidiary branches. Instead, the reseller would do the marketing for them.
Differently from being a retailer, dropship agent do not do the stocking themselves. All they do is promote and takes order from the customer. Only when the purchase is done, would the dropship would get their product from the supplier and ship the ordered items to the customer. Some dropship agent however would keep a handful of then product stock for promotion, window viewing, or rapid shipment for usual customers.
*Note: It is not required for the dropship agent to buy a number of stocks for stock keeping. They can buy however much they want to make their sales.
Benefits of DropShipping
- Doesn't require large starting capital or investment.
- Eliminate the cost of inventory management.
- Positive cash flow cycle, because the dropshipper only pays to the retailer when the customer have made the purchase.
- No commitment, dropshipper doesn't have to restock on certain basis.
- Can be done either as a part-time or full-time job, good for earning extra income if you already working.
- Buy at discount prices, which would make the profit margin for the dropship agent.
The different between normal customer and registered dropship agent, is that dropship agent can buy at discounted price. They can choose to purchase for their own uses, or sell it to another potential customer.
The registration fee is only RM50 and the annual fee is ONLY RM 35.
