What is drop shipping business? Such a question may come to you when you are venturing new business opportunity. Dropshipping business known as an alternative business with minimum capital and can be done by anyone.
Dropshipping means a sales system in which the seller or known as dropshipper main task is market and sell goods belonging to other parties without having to buy them first (stocking goods/no inventory required).
With a simple business scheme, dropshipping can also be done anywhere as long as it has an internet network connection. Nowadays, many people are getting into this one business.
There are many goods that can be sold because currently there are many providers or suppliers of various products that provide dropshipping sales for their partners, including cosmetics, food and beverages, medicine, clothing, and electronics.
The concept of dropshipping business is that the dropship seller (dropshipper) connects producers or suppliers (usually importers or wholesale centers) with buyers. In this case, the dropshipper becomes a middlemen / broker.
The Difference Between Dropshipper and Reseller
At the time you are learning the question of what is dropshipping business, you may get confused by reseller. The meaning of dropship is often equated with a reseller. The difference is in the dropship scheme, goods can be sent directly from the supplier to the buyer. The seller does not need to provide a place and bother storing or packing goods to be sent to the buyer.
Another difference is that resellers usually have to buy inventory of goods from suppliers for later resale.
In the dropshipping business scheme, the dropshipper does not have to spend money because everything is taken care of by the supplier. The dropshipper’s job is only to find customers.
Using digital technology, most dropshippers take the advantage of online sales, especially through social media and e-commerce.
As dropshipper, you need to generate leads. Dropshipper can directly contact the supplier of the goods (forwarding the order) and send the order directly to the buyer’s address. Under a certain drop shipping network providers, you may get done for you service like this one.
Dropshippers get profit margins from the price difference from the hands of the supplier to the selling price to the buyer.
Read: How to Turn Leads into Sales
How Dropshipping Business Works
- Dropshipper determines what products to sell. Find a reliable supplier of goods. Make sure to establish a good relationship to ensure stock availability and the latest product updates, including the matter of payment schemes.
- Dropshippers market their products to consumers, usually via social media, marketplaces and websites. Product photos are usually provided by the supplier of the goods.
- The customer buys the product the dropshipper is promoting. Payment is made by the buyer to the dropshipper.
- The dropshipper then forwards the order to the supplier. The supplier prepares the goods, then the order is packaged and shipped from the warehouse to the buyer’s address.
- Currently, many online store business owners are involved in the dropship business. A business that is relatively easy to do because it has minimal capital and does not need a business location.
| Advantage Dropshipping Business |
Disadvantage Dropshipping Business |
|---|---|
| – Minimum capital – Can be done anywhere – Easy to run – Huge items selection – No need to have storage – No packaging – No shipping |
– Low profit margins – Dropshipper reputation depends on the seller – Delivery depends to the supplier |
Read: Dropshipping Strategy That Makes This Guy $400K / Year
