Dropshipping

Definition

Dropshipping is an e-commerce business model where a store sells products without keeping them in stock. Instead, the seller sends customer orders and shipment details to a third-party supplier, who delivers the products directly to the customer. The store acts as a middleman, handling marketing, customer service, and order processing.

Why It Matters

Dropshipping is a low-cost, low-risk way to start an online store, especially for beginners. It:

• Requires no inventory investment
• Makes it easy to test new products quickly
• Allows sellers to focus on marketing and branding
• Can be operated from anywhere with internet access
• Removes the hassle of packaging and shipping products

How It’s Used

Entrepreneurs set up online stores using platforms like Shopify or WooCommerce and connect them to dropshipping suppliers such as AliExpress, Spocket, or Printful. When a customer makes a purchase, the order is automatically sent to the supplier, who fulfills and ships it under the store’s name. The seller earns the profit margin between the supplier price and the retail price.

Example in Action

An online store sells custom printed T-shirts using a print-on-demand dropshipping partner. When a customer places an order, the print-on-demand service prints the design, packages the shirt, and ships it directly to the customer. The store owner never touches the product.

Common Questions and Answers

1. Do I need to buy inventory upfront for dropshipping?
   • No, the supplier handles inventory and shipping, so you only pay after making a sale.
2. Can I use dropshipping with my own website?
   • Yes, many website platforms support dropshipping with apps or plugins.
3. How do I find reliable dropshipping suppliers?
   • Use vetted marketplaces like Spocket, Oberlo (now defunct but replaced by others), or direct supplier directories.
4. Is dropshipping profitable?
   • It can be, but profit margins are lower, and success depends on effective marketing and niche selection.
5. Will customers know I’m using dropshipping?
   • Usually not, as many suppliers offer white-label shipping, so it appears to come from your brand.

Unusual Facts

1. Dropshipping has been around since the 1960s, long before the internet.
2. Some major retailers like Wayfair and Zappos started with a dropshipping model.
3. You can dropship digital products, not just physical goods.
4. Many TikTok and Instagram brands use dropshipping to test products fast.
5. Dropshipping stores are often built and sold as turnkey businesses.

Tips and Tricks

1. Choose a niche with passionate customers and low competition.
2. Test multiple suppliers for product quality and shipping speed.
3. Use automated tools for syncing orders and inventory.
4. Offer excellent customer service to build trust.
5. Focus on unique branding—don’t rely on generic supplier photos or descriptions.

True Facts Beginners Often Get Wrong

1. Dropshipping is not 100% passive—you still manage orders and customer support.
2. Low startup costs don’t mean easy profits—marketing takes time and skill.
3. Shipping can be slow, especially from overseas suppliers.
4. Not all products are profitable—some have high competition and low margins.
5. Customer returns and complaints are still your responsibility, not the supplier’s.

Related Terms

[E-Commerce] [Shopping Cart] [Payment Gateway] [Print-on-Demand] [Online Store]