Q: I would be interested to start my own eBay business, though I really don't want to invest in a ton of inventory until I can get a much better handle on which might or might not sell. I read another column about dropshipping, though I am nevertheless a bit fuzzy on the way the whole process works. Do you feel using dropshipping is a good way to begin an eBay company of course, if so, exactly how to find products (www.rentonreporter.com) do I get started?

-- Candace M.

A: Dropshipping is a topic which I first answered in my column way back in April, 2003, that is decades ago in Internet years. But with the continuing growth of eBay also it's placing of itself as a viable way for anybody looking to launch an ebusiness, the topic of dropshipping is currently hotter than ever before. It's also now more misunderstood than before.

Dropshipping has been around since Sears first began selling goods from the mail order catalogs of its over a 100 years ago. Nonetheless, the notion of dropshipping still confuses many people who do not understand precisely the way the process works.

By definition, dropshipping is a strategy of promoting and distributing goods wherein the distributor or perhaps provider of the product (the dropshipper) ships the item straight to the end user (the customer) of yours on the retailer's behalf (that's you).

The technique of dropshipping involves three parties who take a merchandise from manufacturing to market. They are a manufacturer, a reseller, and a distributor.

Let's use a blue widget as a sample merchandise to show the process: Blue Widget Manufacturing (manufacturer): This is the company which manufactures blue widgets. Bluish Widget Manufacturing doesn't sell directly to the public or provide the retailers who ultimately sell the blue widgets to the end user. They choose using distributors to handle the procedure of taking their bluish widgets to sell. Bluish Widgets sells bluish widgets by the truckload to distributors that pay $5 per blue widget.

A1 Distributing (distributor/dropshipper): A1 Distributing may be the company which purchases blue widgets in large quantities from the producer and also supplies them to resellers at a cost of seven dolars each. The distributor does not ship blue widgets to the reseller, but ships orders straight to the reseller's customers as the widgets are sold.

Big Bob's eBay Widget Store: Big Bob carries blue widgets to everyone from the eBay store of his. Bob buys the azure widgets from A1 Distributing as he sells them (usually 1 at a time) and has A1 ship the azure widget straight to the customer of his. Bob offers blue widgets to the general public for ten dolars each, which means that for every blue widget offered he nets $3.