How to Dropshipping Basics : What is Dropshipping?

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Dropshipping is a online business where you sell products without an inventory, it is also one of the simplest method to start off making your first bucks online with huge profit potential and little to no risk. This makes it one of the most appealing types of online businesses since entrepreneurs want a way to make big profits with minimal risk and time spent.

Drop shipping is a retail fulfillment method in which the retailer does not keep goods in stock but instead directly transfers customer orders and shipment details to either the manufacturer, another retailer or a wholesaler who then ships the goods directly to the customer.
In the retail businesses, the majority of retailers make their profit on the difference between the wholesale and retail price, but some retailers earn an agreed percentage of the sales in commission, paid by the wholesaler to the retailer.

In simple terms: A supplier will ship the product to your customer for you, and you never have to handle the product. Drop shipping allows the reseller to focus on marketing the business and eliminate the hassle, time, and cost of dealing with the actual products they are selling.

 

Dropshipping is first and foremost a type of e-commerce, which means customers will buy your product through a website.

Although dropshipping has many differences from traditional e-commerce,  it contains the same 3 steps:

  1. Having an online store to sell the supplier’s products on
  2. Customer pays you the retail price you have set
  3. Forwarding orders to supplier, who will then (drop)ship directly to the customer’s addresses

This form of business is different because the dropshipper never has to physically handle the product themselves. Instead of purchasing large bulk orders ahead of time and storing it in a warehouse, the owner of a dropshipping business only orders products after receiving an order from a customer and being paid.

This means there won’t be any wasted orders beside returns and thus this business model contains very little risk.

Dropshipping is one of the most practical ways of selling online, and is recommended for beginners as well as experienced online entrepreneurs.

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