Dropshipping: What does it mean?
Dropshipping is a method of retail fulfillment where the seller accepts orders from customers but does not stock the products. Dropshippers instead transfer orders to third parties who ship directly to the customer.
Dropshipping is a method of selling products at retail. The retailer is responsible to market and sell the product but has very little control over the product’s quality, storage management, shipping, or shipping.
This is a popular way for businesses and entrepreneurs to expand their online business.
Dropshipping allows you to sell products directly to your customers without the high running costs associated with wholesalers. Dropshipping eliminates many business functions, such as maintaining a warehouse or brick and mortar storefront, buying and storing inventory, hiring staff, and managing the finances.
Dropshipping is a low-cost business model that can make it easier to turn a profit. Dropshipping can be a very profitable business model, as stores do not have to pay shipping and manufacturing costs.
How does Dropshipping work?
Dropshipping is essentially playing the role of a middleman between wholesalers and customers. This can be confusing.
We have broken down the steps of dropshipping to help you understand it better:
- The store markets the product and then puts it up for purchase
- Customer purchases product
- Customer orders are accepted and processed by the store
- The store transfers the order details and shipment details to a third-party such as the manufacturer or wholesaler, another retailer or fulfillment house.
- The order is then shipped directly by the third party to the customer
Dropshipping is a complicated process that we simplified, but there are still many hurdles to overcome.
To run a successful dropshipping business, it is important to communicate well with your customers as well as your suppliers.
There are two ways to go about it.
Locate suppliers that offer same-day delivery in your area and limit shipping options to these areas.
Warehousing is the process of acquiring stock for your most popular products and storing them in warehouses located in areas where they are most in demand. Local deliveries can be handled by courier and delivery services.
Bonus: If your profit margins permit, you can make a very valuable offer and give free shipping the next day to buyers who live in the same area as the product being stock. If you use Shopify, you can enhance this offer with many apps.
Aliexpress allows you to choose suppliers that are US-based to reduce shipping times. Shipping costs can be more expensive so make sure to include that in your overall margin.
Dropshipping companies that deliver next-day delivery in your country are a good place to start looking for genuine next-day delivery. You won’t find them on Ali so it will be worth your time to research and contact potential suppliers. It can take time but it is well worth it.