What is dropshipping?
Dropshipping is a business model in which a merchant sells products to consumers without having to keep those products in stock. Instead, when a customer places an order, the merchant purchases the item directly from a supplier or wholesaler, who then ships the product directly to the customer. This means the merchant does not have to deal with the inventory or shipping process for products, which can significantly reduce operating costs and financial risk associated with unsold inventory.
In dropshipping, the merchant usually sets up an online store, promotes the products, and processes customer orders. The supplier is responsible for maintaining inventory, packaging products, and shipping them directly to customers. Essentially, the merchant acts as an intermediary between the supplier and the consumer, earning a profit margin on the difference between the wholesale price and the retail price.
Dropshipping is popular among online entrepreneurs for its relative ease of entry and low startup costs, as it doesn't require large investments in inventory. However, there are challenges such as a potentially lower profit margin, dependence on third-party suppliers, and issues related to quality control and delivery.
In dropshipping, the merchant usually sets up an online store, promotes the products, and processes customer orders. The supplier is responsible for maintaining inventory, packaging products, and shipping them directly to customers. Essentially, the merchant acts as an intermediary between the supplier and the consumer, earning a profit margin on the difference between the wholesale price and the retail price.
Dropshipping is popular among online entrepreneurs for its relative ease of entry and low startup costs, as it doesn't require large investments in inventory. However, there are challenges such as a potentially lower profit margin, dependence on third-party suppliers, and issues related to quality control and delivery.
Updated on: 12/06/2024
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