What is dropshipping? How does the whole process work?

Want to start a dropshipping business? Here’s everything you need to know to get started

  1. Defining dropshipping
  2. What is Dropshipping?
  3. How does the whole process work?
  4. Reasons to Dropshipping
  5. Reasons Not to Dropshipping

1.Defining 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 using the dropshipping model, it purchases the item from a third party and has it shipped directly to the customer. As a result, the seller doesn’t have to handle the product directly.

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2.What is Dropshipping?

Dropshipping is a type of retail fulfillment that lets you sell products without managing your own inventory. You connect with dropshipping suppliers and source products to sell online. Customers checkout on your site, then you forward the order info to the supplier, and the supplier fulfills the order.

Unlike traditional online retail, dropshipping releases the merchant from having to fulfill their orders. That means you skip the stress and cost of manufacturing products, storing inventory and shipping to customers. So what’s left for you as a dropshipper? You’ll choose products, run marketing campaigns and provide great customer service.

What is Dropshipping?

What is Dropshipping?

3.How does the whole process work?

  • Choose products. Source from independent suppliers or integrate with a dropshipping marketplace.

  • Import items to your online store and set your prices. You have full control over your listings and profit margins.

  • Accept customer orders. Shoppers find the items they want, check out and pay on your site.

  • Forward customer orders to the supplier. Put in your customer orders and shipping details. Then, pay the dropshipping supplier on your customers’ behalf.

  • Ship and fulfill orders through the supplier. Your supplier ships each order directly to your customers’ addresses. You’ll get a tracking number in the system so you can update your customers. If the supplier offers white label shipping, you can even use your own branding on the packaging.


4.Reasons to Dropshipping

  • Start an online store with inventory ready to go. Dropshipping makes filling your storefront simple. Choose products, add a payment method and set up your online store.

  • Expand your product offering. You don’t need to limit the products you sell to your storage space or what you can manufacture.

  • Avoid upfront inventory costs. Production and storage costs are covered by dropshipping suppliers. That way, you can focus your budget and efforts on your website and marketing.

  • Operate from anywhere. Without a physical tie to your products, you can manage your dropshipping business wherever you have WiFi.

  • Test products and quickly adjust your inventory to the latest trends. Sourcing products from suppliers means that your inventory is flexible. If a product isn’t selling, you can easily switch to something else.

5.Reasons Not to Dropshipping

  • You can’t completely control product quality. If you work with independent suppliers, it’s harder to minimize risk. However, you can make sure your suppliers are reliable by sourcing through a dropshipping marketplace like Modalyst or Spocket.

  • Customer service may be more difficult. Unless you have in-depth experience with the products you sell, questions may come up that you can’t answer. To solve this, make sure you have a way to communicate directly with your suppliers.

  • You’ll need to manage returns and exchanges. Depending on your suppliers, you may need to handle the refund process on your own as well.

  • Shipping costs will depend on your supplier’s location, not yours. If customers live far from where your products are warehoused, shipping will be pricier. This can also work to your advantage though. For example, if you’re located in the U.K. and your supplier is in the U.S., you’ll have better shipping rates to U.S. customers.

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