How Dropshipping Works?
Q. What is Dropshipping?
Dropshipping is a retail fulfillment method where a store doesn’t keep the products it sells in stock. Instead, when a store sells a product, it purchases the item from a third party and has it shipped directly to the customer. As a result, the merchant never sees or handles the product.
The biggest difference between dropshipping and the standard retail model is that the selling merchant doesn’t stock or own inventory. Instead, the merchant purchases inventory as needed from a third party – usually a wholesaler or manufacturer – to fulfill orders.
Q. How Does Dropship Work?
When a seller sells the products on various platform and the product is shipped directly by the supplier without the seller coming in direct contact with the physical product, this process is known as Drop shipping and the seller is called Drop Shipper.
Steps of Dropshipping
- The Drop shipper posts/lists the products in their store which may be in a marketplace or their own website.
- Customer will place the order and pay them the amount asked by the Drop Shipper.
- Drop shipper will place the order to the supplier and pay the amount asked by the supplier
- Supplier will ship the product directly to the customer at given address by the drop shipper
Benefits of Dropshipping
- No Inventory needed to start business
- You get products at the lowest prices
- You get access to hundreds of categories
- Increase your cash flow: Since you don’t stock the product, you don’t pay for it until it’s sold (after you’ve been paid for it).
- Just membership fee to start a business
- You save time on business management and focus on sales only
- You don’t have to pack products and ship
- No headache to keep a warehouse to store products
- Scalability: Test products and add new ones quickly without bearing the burden of ordering in bulk and having something fail (which ties up valuable time and capital expenditure).
- Flexibility: The best advantage of Dropship business is flexibility. You do not have to be present at the same place all day or all month. You can do this business literally from anywhere in the world because your Dropshipping partner is taking care of everything.