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Q: I would like to start my own eBay business, although I really don't want to invest in a heap of inventory until I have a better handle on which might or won't sell. I read another column about dropshipping, but I'm still a bit fuzzy on how the whole process works. Do you feel using dropshipping is a great way to begin an eBay company and when so, how do I get rolling?
-- Candace M.

A: Dropshipping is a subject that I 1st answered in my column way back in April, 2003, that is decades ago in Internet ages. Though with the continuing development of eBay and it's positioning of itself as a practical way for any person looking to launch an ebusiness, the subject of dropshipping is now hotter than ever before. It is also now more misunderstood than ever.
Dropshipping has been around since Sears first started selling goods from the mail order catalogs of its over a 100 years ago. However, the idea of dropshipping currently confuses many people who do not understand precisely how the process works.
By definition, dropshipping is a technique of promoting as well as distributing goods whereby the distributor or provider of the product (the dropshipper) ships the product directly to the end user (the customer) of yours on the retailer's behalf (that's you).
The process of dropshipping involves 3 parties who take a merchandise from manufacturing to market. They are a manufacturer, a reseller, and a distributor.

Let's apply an azure widget as being a sample merchandise to show the process: Blue Widget Manufacturing (manufacturer): This is the organization which manufactures bluish widgets. Bluish Widget Manufacturing doesn't sell directly to everyone or provide the retailers who eventually sell the azure widgets to the end user. They want using distributors to deal with the procedure of taking their blue widgets to sell. Bluish Widgets carries bluish widgets by the truckload to distributors who pay $5 per azure widget.

A1 Distributing (distributor/dropshipper): A1 Distributing is the company that purchases blue widgets in bulk from the producer as well as supplies them to resellers in a 123 profit cost; my latest blog post, of seven dolars each. The distributor doesn't deliver blue widgets to the reseller, but ships orders straight to the reseller's clients as the widgets are sold.
Big Bob's eBay Widget Store: Big Bob offers bluish widgets to everyone from the eBay store of his. Bob buys the blue widgets from A1 Distributing as he sells them (usually 1 at a time) and has A1 ship the blue widget straight to his client. Bob offers bluish widgets to everyone for ten dolars each, meaning that for every azure widget offered he nets three dolars.