Q: I would like starting my own eBay business, though I really do not want to invest in a great deal of inventory until I have an even better deal with on which might or won't sell. I read another column regarding dropshipping, although I'm nevertheless a little fuzzy on the way the whole process works. Do you feel using dropshipping is a good way to Start An Amazon Business an eBay company and when so, how do I get going?
-- Candace M.

A: Dropshipping is a topic which I 1st answered in my column way back in April, 2003, which is many decades ago in Internet years. But with the continuing growth of eBay and it's positioning of itself as a worthwhile method for anyone looking to launch an ebusiness, the topic of dropshipping is now hotter than ever before. It is also now more misunderstood than ever before.
Dropshipping has been around since Sears first started selling goods from its mail order catalogs over a 100 years ago. Nonetheless, the thought of dropshipping currently confuses many people who don't understand precisely how the process works.
By definition, dropshipping is a technique of promoting and distributing items whereby the distributor or dealer of the shoes (the dropshipper) ships the product straight away to the end user (the customer) of yours on the retailer's behalf (that's you).
The technique of dropshipping involves 3 parties who take a merchandise from manufacturing to market. They are a manufacturer, a reseller, along with a distributor.

Let's apply a blue widget as a sample merchandise to demonstrate the process: Blue Widget Manufacturing (manufacturer): This is the company which manufactures bluish widgets. Bluish Widget Manufacturing doesn't sell straight to the public or supply the retailers who ultimately sell the azure widgets to the end user. They prefer to use distributors to deal with the process of taking their blue widgets to market. Bluish Widgets carries blue widgets by the truckload to distributors who pay $5 per azure widget.

A1 Distributing (distributor/dropshipper): A1 Distributing will be the company that purchases bluish widgets in bulk from the producer and also supplies them to resellers at a cost of seven dolars each. The distributor doesn't ship bluish widgets to the reseller, but ships orders directly to the reseller's customers as the widgets are sold.
Big Bob's eBay Widget Store: Big Bob sells bluish widgets to everyone from his eBay shop. Bob orders the azure widgets from A1 Distributing as he sells them (usually 1 at a time) and has A1 ship the azure widget directly to his customer. Bob carries bluish widgets to the public for ten dolars each, meaning for every blue widget offered he nets three dolars.