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How Dropshipping works?

Added By Admin on 05 Mar 2019

What is Drop Shipping?

How does it work?

Drop shipping is a business model that makes opening and running your e-commerce storefront accessible and easy. It’s simple: first, the drop shipper sets up an online store. Then, when a customer buys an item, the dropshipper arranges for shipment directly to the customer through a third party, never touching the physical inventory. Unlike traditional retail, dropshipping requires very little upfront capital because the shopkeeper doesn’t hold any inventory. This model means instead of going through wholesale suppliers, buying inventory upfront, and waiting for sales to come in, the dropshipper ships products through the third-party supplier only as needed. Much less risk, much more reward!


What are the benefits of the drop shipping model?

There are many! For those just starting with drop shipping, the low overhead costs of launching their e-commerce site or marketplace accounts is a strong appeal. While opening your brick and mortar store could cost thousands, a dropshipping business can start from your home laptop. Another attraction is that working as a dropshipper means you can work from anywhere. With no inventory to move, no physical office to establish, you can keep your store up and running while shipments are moving as long as you have internet access. Another bonus of dropshipping is that it allows you to pick a more extensive assortment of products. Even shopkeepers who have physical stores can benefit from adding dropship products to their assortment so they can offer customers even better products to choose from without having to sacrifice valuable inventory space for their essential products. 


What makes a successful dropshipper?

The best dropshippers establish strong relationships with their dropshipping suppliers to ensure smooth and timely delivery to the end customer. Especially if you’re working on a platform like Amazon Marketplace or Walmart.com Marketplace and you’ve promised customers 2-day shipping, this strong relationship will keep your customer ratings high and help you grow your business.


Where can I set up my dropshipping business?

There are a variety of existing e-commerce platforms that are simple to launch a dropshipping business. eBay dropshipping can be very successful with more unique or hard to find products. Amazon Marketplace is a great universal platform for dropshipping. Walmart.com Marketplace is another large-scale platform. Of course, many of the best dropshippers set up their own Shopify stores and build out their online stores, too. 

Though it might seem intimidating, dropshipping is a simple business model to launch and scale once you start getting sales from your items. Many marketplace platforms have great analytical tools to help you understand your dropshipping business. Knowing the profit margins from your products, and developing an eye for reliable products, and maintaining excellent relationships with your dropshipping suppliers will help you grow your business quickly. Dropshipping is an excellent fit for first-time entrepreneurs looking to explore e-commerce or for experienced retailers to add more products without the risk of buying upfront inventory. 




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