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 supplier and has it shipped directly to the customer. As a result, the merchant never sees or handles the product. This means that the seller never invests or holds the inventory upfront. They simply pay a small portion to the supplier from the payment received from the customer.
For Example:
Supplier Product = Cost $10.
You Sell it for = $30.
You Pay Your Customer $10 to ship the product to your customer.
Your Profit = $20.
If you're new to this let me tell you. Dropshipping is the #1 Business model that can be done with 100% automation.
- Less Capital Is Required – Probably the biggest advantage to dropshipping is that it's possible to launch an ecommerce store without having to invest thousands of dollars in inventory up front.
- Easy to Get Started – Running an ecommerce business is much easier when you don't have to deal with physical products.
- Low Overhead – Because you don't have to deal with purchasing inventory or managing a warehouse, your overhead expenses are quite low. In fact, many successful dropshipping businesses are run from a home office with a laptop for less than $100 per month. As you grow, these expenses will likely increase but will still be low compared to those of traditional brick-and-mortar businesses.
- Flexible Location – A dropshipping business can be run from just about anywhere with an internet connection. As long as you can communicate with suppliers and customers easily, you can run and manage your business.
- Wide Selection of Products – Because you don't have to pre-purchase the items you sell, you can offer an array of products to your potential customers. If suppliers stock an item, you can list if for sale on your website at no additional cost.
- Easy to Scale – With a traditional business, if you receive three times as much business you'll usually need to do three times as much work. By leveraging dropshipping suppliers, most of the work to process additional orders will be borne by the suppliers, allowing you to expand with fewer growing pains and less incremental work