What is Drop Shipping? | Beginner Guide

What is Drop Shipping?

what is drop shipping

A few years ago there was the old traditional business model in retail sectors like fashion, electronics, gadgets etc. We had to go to the shop or retail outlets to purchase any product. In this case, retailers had to maintain their stock and range of the number of products. For this, a retailer and whole sellers had to invest a large number of funds. 

Nowadays most of the people are aware of the E-Commerce industry so they may be aware of the term Drop Shipping. If anyone is planning to go with the e-commerce business, it is necessary to know everything about Drop Shipping.

Drop-Shipping Meaning:

Dropshipping is a retail fulfilment model where we do not need to maintain inventory or stock. Inventory is maintained over different online portal or apps. This business model facilitates a company to operate without having a warehouse or retail outlets.
In this method, the entrepreneur has to contact directly to the manufacturer for the ready product. When any consumer order any product online, the company has to deliver his ordered product to him directly through the drop ship supplier.

How it Works:

what is drop shipping

  • Consumer place an order from online apps or retailer’s online store.
  • Retailer or third party online portal intimates the supplier or manufacturer to supply the product and gives all details of the customer.
  • Dropship supplier procures an order from manufacturer or supplier, pack and ship directly to customer on the behalf of the company or retail store.

Advantages of Dropshipping Model:

Dropshipping model has multiple benefits for retailers as well as customers.
  • Dropshipping is a cost-effective method for retailers and customers because the cost of maintaining a warehouse, rent, employee salary etc is reduced.
  • Retailers do not need to focus on product inventory he has to focus on advertisement and other activity.
  • Customer may get a good discount on each product because of low-cost investment of supplier
  • No need to go to retail shops as a variety of option available at customer’s phone or laptops.

Drop Shipping Business:

Dropshipping business can be started with less capital as no need to maintain purchase inventory.
You do not have to purchase the product until and unless the customer ordered the product.

You can run an e-commerce business with a laptop and internet connection. You can scale your business anywhere and everywhere from home with less investment.

Although there is some hurdle in e-commerce business like handle return product, the damaged product during shipping, inventory issues, shipping complexity etc.

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