Dropshipping

What is Dropshipping

Drop shipping is a supply chain management method in which the retailer does not keep goods in stock but instead transfers the customer orders and shipment details to either the manufacturer, another retailer, or a wholesaler, who then ships the goods directly to the customer¹

Producers

Produces/Invents NEW things

or use others products and customize it

Consumers

Consume goods/services in exchange for money

Manufacturers

Manufactures product at scale

Chinese manufactures

FOB

Free on Board

Shipper just leaves the products at port

Hire a Freight Forwarder

Take care of custom taxes, paperwork, duty etc.

FAQ

• you pay taxes in your local country of residence, even if you sell in USA
• You pay 2 TAXES
  • Custom duty tax 0-10% averages to 4.7%
  • VAT 20%
  • VAT Registered businesses can claim that back during tax filing
  • Mandatory when earning more than 83000 / year
• You dotn pay Custom taxes for LOW VALUE Items like LEDs (less than 5$)

Difference b/w amazon and your store?

• At amazon, people come to search for a specific product
  • People know what they want to buy, Like a popcorn machine
  • Methodical search
• At your store, people come with Emotional Response
  • For people who dont know what to buy
  • Things they are not aware of existed
  • Usually promoted via Social Media, images and videos
  • Fashion

$$ VAT = (Cost of Product + Cost of Shipping + Cost of DUTY ) * 0.20 $$

Factor in 24.7% in taxes for your purchases

Wholeseller B2B

Retails B2C

Footnotes

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