It is a common thought that when you start a business, you need a huge capital. This is true for traditional businesses like Brick and Mortar and other e-commerce sites in which you have to hold an actual stock. But with todayâ€™s technology and huge innovations, there are ways to start a business without really spending thousands of dollars.
The Drop shipping Business
Drop shipping is the process of moving products from the manufacturer directly to the retailer and / or the buyer without passing through the usual sales channels. With e-commerce giants in the industry, the drop shipping business can be possible to anyone who wants to start a business online.
How does the drop shipping business work?
Drop shipping is a buy and sell business with a twist. The difference between dropshipping and the standard retail process is that the seller do not need to stock the products physically. What happens is that when the store makes a sale, it buys the product from the manufacturer and have it delivered directly to the buyer. This option frees the seller from handling the product physically.
What is Drop Shipping Arbitrage?
The drop shipping arbitrage works well like the traditional drop shipping business however with a slight difference. Instead of sourcing products directly from the manufacturer, you source products from other sales platforms such as Amazon, Walmart, Aliexpress, and etc that offer the lowest price possible. Products or items sourced are then listed to another sales platform or possibly your own website.
The diagram below shows a typical drop shipping arbitrage operation. The customer makes a purchase through your store in eBay, then you process the order sourcing the item from Amazon, Walmart, Aliexpress, Sears, and etc. Your source will then deliver or ship the item directly to the customer.
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