Drop shipping business is relatively a different type of selling system used by many online retailers that do not have a physical storage facility to hold inventory. This is a product delivery method in which the seller accepts the payment for an order, but the customer directly receives the product from the supplier.

1. How
dropshipping
business works?

2. Drop shipping business is relatively a different type of selling
system used by many online retailers that do not have a
physical storage facility to hold inventory. This is a product
delivery method in which the seller accepts the payment for an
order, but the customer directly receives the product from the
supplier.
What is Drop shipping?
Drop shipping is a simple concept of selling a product. When
an order is placed by a customer, the retailer passes on the
customers order information to the wholesaler or supplier who
then packages and ship the product to the customer. This
method minimizes the risk for you, as a retailer, because you
don't need to purchase the product until it is sold. Suppliers
take care of the warehousing, packing, and shipping products,
saving you a great deal of money.

3. How does it work?
Drop shipping method is acted by the supplier, retailer and the
consumer. In the traditional business design, the retailers will
order products from the supplier or manufacturer and is
obliged to stock products in the warehouse. The retailer then
has the function to promote and advertise the product and
when another retailer or an end user orders from it, it gets its
supply from its own inventory. In drop shipping the supplier
has the function to create the product and store it for itself.
The retailer does not have to get the product from the supplier
or the manufacturer but is focused only in the marketing
strategy and advertising of the product.
Here are the steps involved in drop shipping:
• Firstly you open a web store with a shopping cart and
accept credit card on your site.
• You find manufacturer or supplier who could drop ship
the product.
• You open an account with the drop shippers you choose.

4. • You receive product images and information from the
supplier and upload them on your web store.
• When an order is placed on your web store by a customer,
your store charges them through credit card including
shipping fees.
• You then contact the supplier via phone or email sharing
the customer's order, name and address.
• Once order information shared with your supplier, they
will pack and ship the product to your customer.
• The drop shipper charges you the wholesale price
including shipping fee. You have already passed the
shipping charge on to your customer, so the shipping
costs you nothing.
How does it benefit to retailers?
If you are a retailer with no upfront cost in turn allows you
make more profit. With this method there is no need to have
an in-house order management and inventory management

5. system, nor you need to pay for the inventory upfront- if the
product doesn't sell, you never have to buy it. Also, no
packing, labeling and shipping cost applied, not there is a need
to built a shipping management system. You purchase
products at wholesale price and set your own retail price.
Whether you looking to expand your retail business over the
internet or just looking for supplemental income, dropshipping
business can be for you.