What is dropshipping?

What is dropshipping

Do you dream of having your online store but don’t have enough money to buy the necessary goods? Dropshipping is a form of trading that allows you to run your online store without warehouse space. This article will find out exactly what it is all about. It’s a really good time to start a dropshipping shop.

Dropshipping is a way of distributing goods. The e-shop operator does not need to have its own warehouse space because the manufacturer or wholesaler sends the goods directly to the customer of a particular e-shop.

So, how does this business model work?

First of all, you need to find a supplier, i.e., another online store that will allow you to import their products into your store, preferably using an XML feed. This way, you will be selling the goods without having them in stock.

The e-shop operator agrees with a wholesaler or manufacturer that allows drop shipping to operate.

The wholesaler sends an XML feed to the operator. The drop shipper selects the goods, imports them into his e-shop, and sets the retail price.

When the customer purchases the e-shop, the retailer pays the wholesale price to the supplier, and the supplier sends the goods to the customer. You can find more info here  The shipment will show the details of the e-shop where the goods were purchased, not the wholesaler who shipped them.

The e-shop operator typically earns a margin, which is the difference between the wholesale and retail prices. At the same time, he avoids the labor and warehouse costs that he would have to pay if he did not use dropshipping.

Since orders are credited to the online shop, the operator is in charge of billing and claims.

Dropshipping is often confused with forwarding orders, where the operator of the online store only receives a predetermined commission for the goods sold. However, this model is not nearly as profitable and does not give the merchant enough freedom to make decisions about their business.

Who is dropshipping for?

Dropshipping is ideal for smaller or start-up online stores whose owners do not have the warehouse space or sufficient workforce required to ship orders. With dropshipping, a merchant can focus on promoting their online store, attracting new customers, and increasing sales. You can find a dropshipping supplier anywhere.

If you are interested in dropshipping, you can read more of our articles.

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