Dropshipping is a supply chain model or type of business model which a dropshipper can directly ship ordered products from wholeseller’s warehouse to the customer’s house without handling logistics and management. Dropshipper no need to owning warehouse to store products and don’t need to maintain inventory, or even having to ship their products to their customers themselves.
In other words, the dropshippers works as intermediates between suppliers and customers. When dropshipper received any order, then they transfer the order information to the suppliers and keep the markup amount as commission for themselves. The supplier will then dispatch the product from the warehouse to the customers. In most cases, the suppliers don’t even know that the person buying from them is a dropshipper or an actual person.
How it works?
Dropshipping works as a mediater when dropshipper fulfills orders with the help of a third party such as wholesaler or an ecommerce store that sells the products at an even lower price .e.g AliExpress. Most dropshippers sell products directly from Chinese manufacturers because the prices in China for most products are quite low. If the wholesaler’s price for a product is $5. A dropshipper will sell it for $8 and keep $3 for himself/herself. Most dropshippers target countries with higher purchasing power.
How to Start an Ecommerce Dropshipping Business And Benefits of Dropshipping?
A dropshipping business takes only a few minutes to start if you are experienced in it. To launch your dropshipping business, you will need to:
- Select a niche
- Analyze competition
- Get a supplier for your products
- Select an ecommerce platform and create a store
- Create a proper marketing and customer acquisition strategy
- Start receiving orders
- Repeat the whole process again
- In dropshipping, you don’t have to pay upfront for the products. So, you will only pay for the hosting and domain charges.
- Dropshippers can work with multiple wholesalers at once.
- As dropshipping stores don’t require storage facility and are completely digital.
- Save on money, time and effort
- Increased Wholesale buyers
- Lower Capital Requirement
- Flexible Location
- Reduced Risk
