What is Drop Shipping?

About Drop Shipping:

• Dropshipping is a retail business model in which a seller accepts customer orders without keeping the products in stock.
• Instead, when a customer places an order, the seller purchases the product from a third-party supplier, who then ships it directly to the customer.
• A dropshipper is an intermediary between consumers and suppliers, curating and promoting the goods that suppliers ship to customers.
• Many businesses prefer dropshipping because it removes costs like warehouse storage and unsold inventory.
• The dropshipping model is attractive to smaller retailers and entrepreneurs because it requires relatively little capital investment and overhead.
• Drop-shipping is not illegal, but there can be problems for buyers and sellers.

●   How Does Drop-Shipping Work?

• The company signs an agreement with a wholesaler, manufacturer, or other retailer to provide the goods it advertises.
• Customers place orders
• The company receives the order.
• The customer receives an order confirmation.
• The company forwards the order to the wholesaler, manufacturer, or other retailer.
• The wholesaler, manufacturer, or other retailer ships the order.
• Customers receive their product.

● Example:

• You list a phone case on your website for ₹500.
• A customer buys it for ₹500.
• You order it from a supplier for ₹300.
• The supplier ships it directly to the customer.
• Your gross profit is ₹200 (before marketing and other costs).