Dropshipping - what is it and how to start a business in this model

[mstlucky8072]

Dropshipping is a retail strategy in which online store owners do not directly manage product inventory and are not responsible for preparing and shipping orders. In fact, the seller does not even see the products they sell. They are mainly responsible for attracting as many customers as possible by generating traffic to their website. Once a consumer makes a purchase, the seller processes the order and passes it on to a third-party supplier with whom they have signed a contract. This supplier, in turn, prepares the order and ships it directly to the end customer. Importantly, the owner of a dropshipping online store buys and pays for the product from a third-party wholesaler only when someone buys it from their online store. The third party can be a manufacturer, a wholesaler, or even another seller.

The main difference between dropshipping and traditional office 365 database retail is that the retailer does not store goods, maintain the associated physical infrastructure, or employ workers to process orders. Additionally, dropshipping fundamentally changes the dynamic between suppliers and retailers. Instead of buying goods from suppliers and reselling them, retailers pass on orders to suppliers who fulfill them on their behalf. Because of the lack of physical inventory, dropshipping only works for e-commerce retailers, not brick-and-mortar stores.




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How does dropshipping work?
The dropshipping process consists of the following steps:

a customer places an order in your online store,
you receive a deposit into your account,
you process the order (usually automatically), forward it to the wholesaler and pay the amount minus the margin,
the wholesaler receives an order from you,
the wholesaler prepares and ships the order on your behalf,
the buyer receives the order.
how dropshipping works

how dropshipping works

Dropshipping is becoming more and more popular
According to the latest data , the global dropshipping market is forecasted to reach $196.78 billion in 2022. Additionally, it is predicted to continue to grow rapidly in the coming years, exceeding $200 billion for the first time in 2023 and $300 billion in 2024.

estimated value of the global dropshipping market size in 2020, with forecast from 2021 to 2026

estimated value of the global dropshipping market size in 2020, with forecast from 2021 to 2026

Polish entrepreneurs running an online store based on dropshipping do not have to limit their sales activities to the website. You can also sell goods on Allegro, OLX and other auction portals, through price comparison sites such as Ceneo or in a Facebook store. Of course, you can also use foreign marketplaces such as Amazon, eBay.