What is Dropshipping? Easy Online Business 101!
With dropshipping, store owners can sell products to their customers without actually stocking the items themselves. Amazon and Sears use this business model, too. If big names don’t catch your attention, look at the regular guys making their way and sharing their stories as dropshippers on Reddit. Over a quarter of the entire ecommerce industry uses dropshipping as a primary inventory management model.
Small scale ecommerce entrepreneurs love dropshipping because there is no inventory to hold, which translates into a lower upfront investment. Not having to manage an inventory also lets you concentrate more on the most important thing – bringing in new customers. In this article, you’ll learn what dropshipping is, and why you should care about it.
What Is Dropshipping?: How Dropshipping Works
At this point you might be asking yourself, how does dropshipping work? In the simplest terms, after a dropshipper sells a product, he or she buys it from a supplier and has it shipped directly to the customer. Typically, the process works as follows. An ecommerce merchant posts products on his or her website, from which a customer places an order and pays for the item. Then, the merchant fulfills the order by placing an order for that same product from the supplier who sends it to the customer. When merchants decide to host their ecommerce shops through Shopify, apps like Oberlo make the process simpler and more streamlined by acting as the connective tissue between the supplier marketplace and the front end of the ecommerce shop from where the merchant items are displayed for sale and purchased. The app makes it easier to import products directly from suppliers into the store, and helps to manage any changes in inventory or pricing in the supply marketplace so that there aren’t any discrepancies between what is being displayed in a merchant’s ecommerce shop and the actual characteristics of the item in the marketplace.
With a dropshipping business you don’t need cash or storage space. You just need to set up your store, list your products, and focus on marketing and selling.
It works like this:
First, you find and source a product with a low wholesale price from a supplier. Then, you place that product on your store and list it for a higher retail price.
When your customers purchase the item, you take their orders and send them to your supplier. The supplier sends out your goods directly to your customers and you keep the difference.
The great things about dropshipping:
It’s easy to set up a store.
You don’t have to worry about inventory.
There’s little risk to you as the seller.
There are millions of products you can sell.
It’s possible to have a dropshipping business anywhere in the entire world.