What is a Drop shipping Business?
Drop shipping is a retail fulfilment method where a store doesn’t keep the products it sells in stock. Instead, when a store sells a product using the drop shipping model, it purchases the item from a third party and has it shipped directly to the customer. As a result, the seller doesn’t have to handle the product directly.
The main difference between drop shipping and the standard retail model is that the selling merchant doesn’t stock or own inventory. Instead, the merchant purchases inventory as needed from a third party—usually a wholesaler or manufacturer—to fulfil orders.
Here’s a simple breakdown of how drop shipping works:
1. Customer places an order with your online store.
2. You forward the order to your drop shipping supplier.
3. The supplier prepares the customer’s order.
4. The supplier ships the order directly to the customer.
The benefits of drop shipping include a low barrier to entry, reduced overhead since there’s no need to purchase inventory upfront, and the ability to offer a wide range of products without having to buy large quantities. However, it also comes with challenges like lower profit margins, shipping complexities, and less control over inventory and shipping times.
If you’re considering starting a drop shipping business, it’s important to research and choose reliable suppliers, create a well-designed online store, and focus on excellent customer service to stand out in the competitive e-commerce space.
