You probably have heard of the term dropshipping and wondered what it is. These days, dropshipping is quickly becoming a buzzword in online retail. In this short guide, we'll explain what is dropshipping and how it works.
The Concept of Dropshipping
At its very core, dropshipping is a system of retail fulfillment where a retailer or merchant doesn’t keep a stock of the products that it is selling, doesn’t have to deal with inventory, and doesn’t have a warehouse to store their products. In this business model, a third party fulfills the order and also handles the shipping. The third-party supplier takes care of storing the products in a warehouse, packaging, and directly sending the item to the customer on the retailer’s behalf.
The retailers or merchants never see the products that they are selling because they purchase inventory from a dropship supplier in order to fulfill the order. Dropship suppliers are usually wholesalers or manufacturers.
How Dropshipping Works
This is how dropshipping works:
- The online retailer finds a dropshipper that he or she wants to work with. Choosing a dropshipper depends on what's the chosen niche and what kind of products you want to sell.
- The dropshipper will give the retailer access to their product images (and other information relevant to the products) which the retailer can post on his or her online store.
- A customer places an order for his or her preferred products on the retailer’s online store.
- Once the retailer receives the order, it is forwarded to the dropship supplier, along with the full customer details.
- When the dropship supplier receives the order from the retailer, it packages and ships the order directly to the customer on behalf of the online retailer.
If something goes wrong and causes a dispute between the buyer and retailer, there are some services which can help resolve it quickly. To learn more about one of them, read this Purchase Guard review.
Platforms for Finding Suppliers and Wholesalers
One of the challenges of online sellers is how to find high-quality products that people would want and love. Retailers need to do their research to find reputable dropship suppliers and wholesalers. Here is a list of the most popular and most reputable dropshipping companies:
- Wholesale Central
This is a free directory of wholesalers and dropshippers with a variety of different categories, from books to pet supplies.
- AliExpress
AliExpress is a popular platform that offers millions of products in 40 different niche categories.
- Wholesale2B
This supplier integration system allows retailers to select from more than a million products offered by hundreds of suppliers.
- SaleHoo
This directory connects dropshippers to suppliers. Retailers can sign up for an annual membership, which costs just US$67.
- Worldwide Brands
This directory features a big list of reputable and reliable dropshippers. Access to the directory requires a one-time fee of US$249.
Recommended Platforms for Building an Online Store
In order to have guaranteed customer satisfaction, retailers should have a reliable, well-equipped platform to build their online store. Here is a list of the best platforms for building an online store:
- Shopify
With Shopify, it is easy to set up your store and start selling right away. It has excellent support, which is available 24/7.
- Wix Stores
Originally a website builder, Wix has expanded its platform and services to allow its users to build online stores, using a simple and straightforward interface.
- BigCommerce
This e-commerce platform has a lot of marketing tools and features that help retailers build their online store, including options to handle coupons and discounts, plus flexible shipping options. It also integrates with big retailers such as eBay and Amazon.
- SiteBuilder
This easy-to-use site builder features an intuitive interface. It also provides domain, hosting, SEO, and other useful e-commerce tools to help retailers get started.
Community manager at Visual Contenting. Jacqueline loves to talk about social media trends, new technology and how they help businesses accelerate their marketing efforts.
