Dropshipping is a retail fulfillment method where a seller lists products on their website without keeping inventory. When an order is received, the seller sends the order to a third-party supplier, who handles inventory warehousing and order fulfillment, and ships the product directly to the customer on behalf of the seller. The seller keeps the profits from the high sale price, but may charge more money since they are middlemen.
Dropshipping is a popular business model due to its low startup costs, zero overhead, and simple business model. It is possible to start a dropshipping company for as little as $100. The main benefit of dropshipping is the ability to list and potentially sell products before committing to buying a large amount of inventory. However, dropshipping also has its drawbacks, including lower profit margins, less control over the quality of the products sold, and an increased risk of shipping delays or supply chain issues.
In a dropshipping business model, the seller promotes products and provides an online storefront. When a customer places an order, the seller sends the order to the dropshipper and informs customers the products are on the way. The rest of the physical fulfillment process is out of the sellers hands. In some dropshipping agreements, the seller may also handle customer service, while the dropshipping service manages the physical goods and fulfillment.
