What is dropshipping?

Dropshipping is a retail fulfillment method where a store doesn't keep the products it sells in stock. Instead, when a store sells a product, it purchases the item from a third party (usually a wholesaler or manufacturer) and has it shipped directly to the customer. As a result, the merchant never sees or handles the product.

In a dropshipping model:

1. **Customer Places Order**: The customer places an order on the retailer's online store and pays the retail price.
 
2. **Retailer Forwards Order to Supplier**: The retailer forwards the order and customer details to the supplier (dropshipper), along with the wholesale cost of the product.

3. **Supplier Ships Product Directly to Customer**: The supplier processes the order, packs the product, and ships it directly to the customer using the retailer's branding and packaging materials if requested.

Key features of dropshipping include:

- **Low Barrier to Entry**: Dropshipping requires minimal upfront investment compared to traditional retail, as there's no need to purchase inventory or store products.
 
- **Flexibility and Scalability**: Dropshipping allows retailers to test different products and markets with minimal risk, and scale their businesses rapidly without the constraints of inventory management.
 
- **Outsourced Fulfillment**: Dropshipping outsources the fulfillment process to suppliers, reducing the retailer's operational burden and allowing them to focus on marketing, customer service, and growing their business.
 
- **Global Reach**: Dropshipping enables retailers to sell to customers worldwide without the need for international shipping infrastructure or market entry barriers.

Overall, dropshipping offers an accessible and cost-effective way for entrepreneurs to start and operate e-commerce businesses, leveraging third-party suppliers to fulfill customer orders and manage inventory logistics.