What Is Drop Shipping? The Easiest Way To Start An Online Business.
If you are into online marketing you must have heard about number of E-commerce models and Drop shipping is one of the business model. In 2006 when Chinese ecommerce site AliExpress became popular in US, that time term “drop shipping” gained more popularity. Some clever Entrepreneurs took advantage of drop shipping model and launched their online stores to earn more money. For drop shipping business they used AliExpress because of its low prices.
Today, drop shipping has become highly profitable online business model in the world. You can start drop shipping with zero investment.
What Is Drop Shipping?
Drop shipping is a type of business model in which entrepreneur don’t have to maintain inventory, also there is no need to own warehouse to store their products. In this business model entrepreneurs sell product to their customers without actually stocking products themselves. In other words we can say that once dropshippers receives order and payment for the product from customer, they buy it from their supplier and directly ship it to their customer. As result dropshipper never need to handles the product.
The major difference between standard retail model and dropshipping is that selling merchant don’t need to maintain inventory, also don’t need to own warehouse. Instead selling merchant means dropshipper purchase product as needed from third party wholesaler or manufacturer to fulfil orders. This business model is extremely attractive and reliable as it eliminates the need for store owner to have physical business location. For this business model all you need is a laptop and Internet connection.
How Does It Work?
Drop shipping follows a simple supply chain. When buyer orders any product from dropshippers online store, they receive order and payment from customer. After that dropshipper purchase desire product from third party seller and ship it to the customer. Seller merchant means dropshipper is having an ecommerce website where customers can place order for products. The customer pay for the order he places with merchant.
Seller merchant then forward the order details manually to the supplier. Seller merchant keep little higher price than actual price so that he can earn a good profit on products. There is difference between the retail price and the price merchant buy product from the supplier. The supplier charges merchant for the product and directly ships it to the customer. The shipment bears merchant’s logo not supplier’s.
For example, if the wholesale price of product is $100, the dropshipping store sell it for $150 to $200 making commission of $50 to $100 very easily.
There are many online platform for drop shipping business like Shopify, Oberlo, Doba, Dropship direct etc. But in them Shopify is one of the best and easy platform for new entrepreneurs. With Shopify you can access variety of products easily with just few clicks. Whatever its fashion, toys, beauty or electronics. Shopify makes easy for you to find product from suppliers over the world and instantly add them to your own store.
Suppose if customer places and order on your Shopify store and pays you amount X. After that you will need to purchase that desire product for the Y amount from the supplier or wholesaler and they will directly ship that product to your customer. So your profit will be = X amount – Y amount.
Drop shipping is a highly profitable business opportunity for young entrepreneurs. The good thing is that there is little investment and anyone can start business sitting at home, all you need is laptop and good internet connection. You can easily enter into the market by using this business model. It’s practical and convenient for anyone who would like to start business in 2019.
When it comes to drop shipping, it is the ideal business model for first time entrepreneurs. It’s very easy to understand and establish business. As there is no headache of maintain inventory, no need to own warehouse and also you can work from any corner of the world. Just import different products from supplier to your online store and sell it.
Becoming dropshipper is easy but it is quite difficult to make sell as it requires planning, research and time. But still I prefer it because its easiest way to start your own online business. It require small capital and there is less risk. You don’t have to concern about storing inventory.