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What Is Dropshipping? Learn About Running A Business Without Inventory

Let’s start with mentioning that you can start your personal online shop with pretty much a minimal investment, if you work on a dropshipping model. This business model is popular all over the world and empowers many small online stores owners. So what is it and what risks exist in such a business model

Dropshipping (from the combining the words drop shipping - direct delivery) is the type of business activity, which consists in sale of goods of the supplier company by an intermediary (dropshipper). Supplier company sends the goods to the address that the dropshipper provides. The latter does not need to spend money on the maintenance of the office, warehouse, state and invest money in goods and inventory. The goods are sent directly to the buyer. Dropshipper profit is formed due to the difference between the price that it pays to the supplier, and the retail price at which sells the product to the customer.

A big help for your dropshipping can be achieved by using AliDropship WooCommerce dropshipping plugin.

How dropshipping works?

Let’s take an example, an online store that sells clothes. But it has no warehouse and if an online order arrives at the store, the supplier of the clothes sending the product directly to the customer so the online store owner earns a surcharge from the sale.In order to work with dropshipping, you need to take a few steps:

  1. Search for supplier partners. This is one of the most difficult moments in the business, since this method of sales is associated with high risks due to working with supplier partners. Dropshipper acquires products from a partner-supplier at a wholesale price, and winds up his percentage from above.

  2. Development of an online store or groups in social networks. Also, sometimes dropshippers sell products on bulletin boards or online auctions - register, create lots and accept payment from buyers.

  3. Filling your online store with products of the supplier company, the cost of which already contains your mark-up.

  4. Launch contextual and banner advertising, website promotion, affiliate programs.

As soon as the store receives an order, you need to accept איק payment from the client, contact the supplier-partner, pay for the selected product at the wholesale price, transfer the customer's contacts to the partner. The supplier independently sends the order to the client's address.

If you worked quickly, the products were in stock, the supplier company sent it without delay then the customer will receive the order and would be satisfied. Your first sale was a success.

How to choose a good dropshipper?

Always follow a number of rules in order to be sure that the partner is responsible, selling quality products and sending them on time.

  1. Study your documents and contracts.
  2. A partner company should have a track record.
  3. Read reviews on the Internet.
  4. Negotiate before signing the contract.
  5. Before you choose the supplier - make a test order to your address.
  6. Constantly look for new partner suppliers - this is normal. 

Summary. dropshipping is a great business model!

Dropshipping is a low-cost type of business that only requires a computer and an online store. They can be engaged in parallel with the main work, while obtaining a good profit. Be sure to follow the rules and start your dropshipping adventure today!

Be sure to check the AliDropship WooCommerce dropshipping plugin.