What Is Dropshipping?

Introduction

If you’ve been thinking about starting your own e-commerce business, you’ve probably already encountered many questions about what and how.

When considering traditional e-commerce, it means selecting, purchasing, and storing products, as well as taking care of product advertising, delivery, and handling any potential complaints.

What Is Dropshipping?

Dropshipping is a method of selling where a company doesn’t hold the products it sells in stock.

Instead, the e-commerce owner purchases inventory from a third party, a wholesaler, or a manufacturer as needed to fulfill orders.

It can be said that in drop shipping, the owner is merely an intermediary between the customer and the supplier.

Who Is a Dropshipper?

A dropshipper is an individual or a company that uses the dropshipping model, which means they use a third party in the process of purchasing products and their delivery.

In doing so, they don’t use their own warehouse space because they don’t stock the products they sell, and they don’t worry about packaging and delivery.

How Does Dropshipping Work?

In dropshipping, as the e-commerce owner, you receive customer orders and process them with the supplier you have a contract with.

You, as the owner, are responsible for finding a wholesale supplier and signing an agreement with them.

After you do that, you will have access to all the products of that supplier that you can then offer in your e-commerce store.

Of course, you don’t have to limit yourself to just one supplier.

Perhaps one of the largest global suppliers is Aliexpress, but in recent times, many new ones have emerged.

If you don’t have an idea of which suppliers to use, the Dsers application can help you with that purpose.

Advantages of Dropshipping

Why is dropshipping attractive to both large and small businesses?

The less initial capital required

One of the major advantages of dropshipping is that you don’t need to invest in products and store them.

You don’t have to buy the product until you’ve made the sale and the customer has paid you.

Lower risk when starting an e-commerce business

Since you don’t stock the products you sell, it’s easy to switch to another product without additional costs.

The start is relatively simple because you don’t have to worry about many things that traditional e-commerce businesses do.

Low operating costs

Due to the reasons mentioned above, your operating costs will be relatively low.

This makes it possible to operate the business in a relatively small space, and you will need basic inventory – a computer with an internet connection.

Of course, as the business grows, you may need to hire more people to meet your customers’ demands.

Wide range of products to sell:

You will always have a wide range of products available.

In case a product doesn’t meet the requirements, it’s easy to replace it with another without additional costs.

Disadvantages of Dropshipping

To avoid thinking that dropshipping only has good sides, it’s necessary to list some downsides.

Until now, the main downside has been the lack of product availability in the manufacturer’s warehouse without your knowledge.

This can create a negative image of your e-commerce store.

Another common downside is the lower quality of the products compared to what is listed by the manufacturer, resulting in customer dissatisfaction and product returns.

Long delivery times

If your products are located on another continent, it naturally extends the delivery time.

However, some manufacturers have found a solution by opening warehouses around the world to shorten delivery times.

Frequently Asked Questions

Conclusion

Many advertise dropshipping as a way to get rich quickly.

However, that’s far from the truth.

You will need to invest a lot of effort and time if you want your store to start successfully.

While some costs may not be present, launching an e-commerce store requires an investment in the platform where it will be located, establishing a business, and certain resources for advertising.

If you are just starting, advertising will enable you to expand in a market with strong competition.

On the blog, we’ve described Shopify, a service designed for creating e-commerce stores.

We will also list places where someone, for a fee, can do it for you.

Related: What is Shopify?

Related: Shopify store, the second part

Related: WED2C: Open a mini web store on your mobile phone.

Related: How To Create A Free Online Shop On Payhip?