Picture this. You sell a product that you don't ever have to store. You set your retail price and every time you sell, your wholesaler ships the product for you to your customer's door in your name and you keep the profit. How is that possible?

It's called drop shipping. Simply put, a drop shipper is a distributor that will ship products in single units directly to your customer in your name. The purpose of this article is not to convince you to start a drop shipping business but to give you pointers on how to start right and avoid common pitfalls.

The Beauty of Drop Shipping

One of the greatest challenges for people interested in starting a home business is where to find products to sell. If you don't have thousands of dollars to invest in products and storage and want to avoid the hyper-competitive business of information products, or the dreaded multi-level business, drop shipping might be the answer.

The most obvious advantages of drop shipping include: you never have to deal with the headaches of warehousing, packaging and shipping, and you don't tie down your limited financial resources in inventory.

Other advantages are: no leftovers, you can change or add products easily and instantly, and no limitations as to what you can sell. Plus, you get to use your customers' money to run your business and "carry" brand-name products and look big. Is this cool or what?

The Dark Side of Drop Shipping

Beware. While drop shipping business may be simple, finding a true, reliable drop shipper is not. Scam companies lurk, ready to relieve you of your hard-earned money, or profit from your hard work.

For starters, some "drop shippers" are just middle-men who contact the real drop shipper when you place an order. They use you as their salesperson, so you use your money and time to find customers, and cut into your profit.

Others are fly-by-night operations. They will take your money and disappear. In short, scam.

Once I responded to an impressive full-page ad in a business magazine. The advertiser claimed to be drop shippers, and even promising help through support and business advice. To cut a long story short, the "drop shipper" rarely delivered my orders as promised and in many instances I had to re-order elsewhere and absorb the losses to avoid disappointing my customers.

Later I found out that the company was not the real drop shipper, when I discovered their source.

A few years ago, an eBay