What is Dropshipping?
Dropshipping is an online business where an eCommerce store doesn’t keep the products in stock, meaning no inventory cost. Instead, when customer purchases a product, the store owner places the order with the original vendor and have them ship the item directly to the customer.
The main difference between a dropshipping business vs traditional eCommerce business is that dropshipping doesn’t require you to stock or own any inventory. You also don’t have to deal with any shipping or handling logistics.
When a product is sold through your online store, you simply forward the purchase order to a wholesaler or manufacturer who fulfills it.
Due to the low operating cost and easier setup, dropshipping has become a global eCommerce trend.
The dropshipping business model has a few pros and cons that you need to keep in mind before getting started.
Pros of starting a dropshipping store
- Setting up a dropshipping business requires much lower investment than a typical online store
- You don’t need to purchase products or manage an inventory
- You don’t need to ship the product by yourself
- You can sell variety of products from different vendors and manufacturers
Cons of starting a dropshipping store
- You are not in control of product quality and availability
- Managing customer expectations can be challenging when you don’t have control over quality or shipping of the products
- Providing customer support can be challenging
- You’ll be making less profit because instead of bulk buying products, you’ll be selling one item at a time
With that said, dropshipping is a proven way to make money online. You can use dropshipping to make extra money on the side or build a large profitable online business.
Let’s take a look at how to properly start a dropshipping business.
How to Start a Dropshipping Business
Starting a dropshipping business is not as difficult as you’d think. There are plenty of eCommerce platforms that allow you to easily set up a dropshipping store without any technical skills.