What Is Dropshipping

Dropshipping is a type of business model which enables a company to operate without maintaining inventory, owning a warehouse to store their products, or even having to ship their products to their customers themselves. How it works is that the retailer partners up with a dropship supplier that manufactures and/or warehouses products, packages the products, and ships them directly to the retailer’s customer, on the retailer’s behalf.

In simpler terms, this is how dropshipping works:

1. The customer places an order for a product on the retailer’s online store.
2. The retailer automatically or manually forwards the order and customer details to the dropship supplier.
3. The dropship supplier packages and ships the order directly to the customer in the retailer’s name.

4. PROS OF DROPSHIPPING

   As a business model, dropshipping has several different aspects that prove to be beneficial, such as:

   • It’s easy to set up: It doesn’t take an entire village to set up since it essentially involves just 3 steps – find the supplier, set up your website and start selling the goods! To someone who is new to the ecommerce industry, this business model is relatively easy to understand and implement.
   • The cost of setting up your online business using the dropship model is next to nothing:In traditional business models, the majority of the costs are related to setting up and running the retail operations, i.e. purchasing the inventory. Since dropshipping eliminates that step, and thus the cost of it, all you have to pay for is the associated costs of running your website (hosting, theme, apps, etc.).
   • You don’t have to worry about exorbitant overhead costs: As previously mentioned, the business owner is not required to purchase inventory thus the costs of renting or buying warehouse/office space and the other smaller yet substantial costs pertaining to it (electricity/phone bills, stationery, etc.) aren’t an issue. The fixed costs of managing the website is all that a business owner has to worry about.
   • The risk of drop shipping as a business model is significantly lower: If the business doesn’t sell products it still doesn’t lose anything, so there is little to no pressure about having to sell your inventory.
   • The business can be run from anywhere thus the business owner is location independent: No office, no warehouse, no employees and no hassles. Little to no commitment to a physical space means that you could be sitting at a beach, sipping on mojitos while still turning profits. All you need is your laptop and the internet.
   • There is lots of variety when it comes to the products you want to sell: There is a drop ship supplier for almost anything that you would like to sell! You can rely on one great product, sell several products at once or mix it up; it’s all up to you. Find your niche and there is bound to be a supplier that caters to it.
   • More time and resources to scale your business: In traditional retail business models, if you want more profits you have to do more work and invest that much more of your resource pool. With dropshipping all you have to do is send more orders to your dropship supplier and then let them handle everything else while you earn the profit and are left with more time to develop your business plans and scale!
   • Reduced losses on damaged goods: Since the shipment goes directly from the supplier to the customer, there are fewer shipment steps involved which drastically reduces the risk of damaged items while moving from one physical space to another.

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Created on May 13th 2019 01:11. Viewed 723 times.

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Comments

Tunde Oloruntoba  SFI AFFILLIATE Its really a great way for people who are too busy to dedicate themselves for packaging and monitoring sales. Nov 20th 2013 01:48

MArifin B M   Private Business/General Commission Agent Yes, it's a great site that never miss pay our job Nov 20th 2013 04:45

Joe Henning  Your Profit Connection Hi Carl, the link has been quite busy but I hate knowing you cannot reach it... try this one: http://wonderfulfive.weebly.com which is the one leadsleap should link up with.... good luck and let me know if you have any questions... Nov 20th 2013 19:50

Gary Jenkins  Fan Page Management Dropshipping is a great way to generate an income, but you will need to do everything you can to lower your costs to be successful. Don't limit yourself to just ebay. Check out other auction site like ebid. They are the reason ebay has stopped charging for listing your items. Nov 20th 2013 22:54

Joe Henning  Your Profit Connection Thanks for the comment, Gary. Is this ebid.net you're referring to? They have Alexa ranking 19,813 and estimated traffic of 55,519 daily pageviews; EBay has Alexa ranking 8 and estimated traffic of 55 million daily pageviews. One will always have costs associated with selling and advertising, which makes your input very interesting. The major points of how to fine tune your listings (products on display) and how to outsell others with similar dropshipping items are the specialties of the program associated with this promotion. Feel free to have a look. Have a nice day, Gary. Nov 20th 2013 23:12

Tunde Oloruntoba  SFI AFFILLIATE A motivating pattern of advertising and generating income Dec 1st 2013 00:53

John Thomas  Author Nice article......... Jan 3rd 2014 03:54 1 Likes

Josue Delgadillo  web design nice thing going on i lik. Feb 16th 2014 03:46

Joe Henning  Your Profit Connection Thanks for the comment, Josue. Yesterday (as has happened regularly in the last 3 months) someone paid me $100 for an item that cost me $52.47.. amazon will graciously drop ship it for free, thank you. The perfect example of what we do, if you'd like to follow the link on the above article. Feb 16th 2014 16:34

Tem Tee  NaijaStore.blogspot.com Drop + shipping... lol Feb 16th 2014 23:24

Joe Henning  Your Profit Connection That actually (sadly so... ) actually happens too... also made me smile, Dee Tee... :-) Feb 17th 2014 01:45

Henry Desouza  Sexy Teacher It is correct , someone paid me $80. Feb 18th 2014 08:46

Joe Henning  Your Profit Connection Hello Henry, please explain what you said, as I don't understand... what were you paid for? Feb 18th 2014 11:08

János Bátori  János Bátori Szia! János vagyok Budapestről! nem voltam,még nős nincs gyerek. Egyedűl élek társat nagy szerelmet keresek erre az életre! Kérlek írj nekem,cseréljünk képeket,ismerkedjünk! email címem: bj.hokiss @ gmail.com Puszi János Kérlek kűldj magadról a Sexi privát fotóid? Mivel kedves szép,vagy szeretném ha te lennél a társam egy életre! Szeretnél engem Mar 16th 2014 04:52

Cindy Bolley   HHCTB? Nice article Joe... I was selling a product for awhile that I was shipping from home. This drop shipping sounds much better I wouldn't have to go to the post office so often. I have a product now that I guess would be called drop shipping I have a site that I direct people to a main site and when they buy I get paid...$$$ Gotta love that! No product involved for me.. except for the one that I bought for my own use. Apr 15th 2014 14:56