What is Dropshipping allows you to offer products in your store without having them in stock. If you are currently setting up an online store, it is important that you know the concept of drop shipping and what it is for.
Dropshipping is a business model based on a logistics management system whereby you offer products in your store without having them in stock.
This is a shipping and delivery method for retail orders in which the store does not need to have the products it sells in stock. Which means that it is not necessary for the store itself to have in inventory the goods or services that it sells in the warehouse.
Therefore, drop shipping is the sale of products or services by catalog, without investment in stock, and at retail, in which the retailer deals with making the sale without having the product (sale without stock).
It may sound a bit little weird, but it’s not. The biggest difference between dropshipping and the traditional retail model is that the seller does not need to own or store their own inventory.
How does Dropshipping work?
For dropshipping to work, the retailer, that is, you, has to reach an agreement with the supplier of the products or services that are for sale, so that he is the one in charge of shipping the orders made by the customer.
The buying or selling process begins when the customer makes a purchase through your online store. As the owner of the company, you limit yourself to managing the collection and passing the order to the dropshipping provider.
He himself is the one who prepares the products and deals with the shipment of the package directly to the customer.
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Surely you wonder if this can be profitable or not, or if it has any benefit for you. The answer is yes, if you know how to have a good organization for the business to prosper.
Like everything, this method of sale has its advantages and disadvantages. However, it is important to highlight its benefits, since they are very significant for this business:
Lower initial investment
The biggest advantage of this sales method is probably that you can launch an online store without having to invest thousands of dollars in inventory up front.
The most normal thing, before learning about dropshipping, was to commit large amounts of capital to purchase inventory. With this new business model, it is no longer necessary.
No logistics centre
You won’t have to think about any aspect of logistics or distribution when creating your online store.
Your own provider, also called a dropshipper, will ship the orders directly to your customers. So you don’t have totaly worry about shipping.
This sales method will make you have much less fixed expenses and less work than a physical store or other online store models.
When creating an ecommerce, logistics is usually one of the parts that is least thought about, but, nevertheless, it is one of the most important parts to take into account due to its difficulty and expenses.
Therefore, if you are thinking of creating your own online store, without much investment, the drop shipping model is a good option to get rid of the headaches of the logistics system.
With dropshipping, you don’t need to worry about packing and shipping your orders, controlling inventory for accounting purposes, dealing with returns and internal shipping, or having to continually order products and manage inventory levels. Test it!