What is dropshipping

Dropshipping is an e-commerce model where the retailer does not keep the products sold in stock, but rather obtains them from third parties.

The term Dropshipping comes from the English words "to drop" meaning to let fall, and "shipping", which refers to delivery.

In practice, using this sales model, a product is purchased from other manufacturers and shipped directly to the customer, so that the seller does not have to handle the product directly.

The difference between the dropshipping sales model and the standard one is that the seller doesn't stock up or own an inventory but instead purchases it as needed from a third party.

Functions of dropshipping

Dropshipping allows the seller to ship a product directly from the wholesaler's warehouse to the customer's home.

This mechanism allows dropshippers to focus solely on sales and marketing strategies for their business.

Moreover, those who engage in dropshipping earn a commission every time a customer makes a purchase from their site.

When an order is received, all the order details are transferred to the suppliers, who then ship the product directly to the customer.

Essentially, the dropshipper works only as an intermediary between manufacturer and consumer.

Benefits of Dropshipping

Through dropshipping, it's possible to establish a solid and effective business.

This model offers several advantages, which include:

• No capital required: It's possible to launch an e-commerce store without having to invest capital upfront because with the dropshipping model, you don't need to purchase a product unless it has already been sold and paid for by the customer;
• It is very easy to start and manage: managing an e-commerce business is much easier when you don't have to deal with physical products because you do not have to worry about managing and paying for a warehouse, packing and shipping the products, handling returns, and so on;
• Low costs: not having to deal with purchasing inventory or managing a warehouse means overheads are very low;
• Flexible location: a dropshipping business can be run from anywhere as long as there is an internet connection;
• There is a wide selection of products to sell: it's possible to offer an array of trending products to customers without additional costs.

With the dropshipping model, you can launch a new store and most of the work for processing additional orders will be handled by suppliers.

Furthermore, it allows for expansion with fewer growth issues and less incremental work.