Dropshipping is a retail business model that allows you to sell products online without purchasing inventory upfront.
Instead, you list someone else's products in your online store. When a customer makes a purchase, you order the product from the supplier, who ships it directly to the customer.
This process eliminates your need to handle or store the items yourself.
The key players are:
You – you are the dropshipper. You build a store and do the marketing.
Suppliers – these are the entities that have the product in their warehouse. Their job is to ship the order to your customer. You as the dropshipper will not handle the product in any way.
Customer – they order the products for your store and pay.
In dropshipping, the customer will not know that your product is not yours. To them, you are the brand owner. As such, all refunds and customer-facing accountabilities are yours to face.
🛈 Info: The profit you make from dropshipping is the difference between your selling price, our supplier's price, and the marketing cost.
For example, if you sell drones which your supplier offers a drone for $30, you could list it in your store for $45.
When a customer purchases the drone, they pay you $45. You then order with the supplier for $30 and keep the $15 difference as profit.
However, it's important to account for other associated costs. Expenses such as payment processing fees, platform fees (e.g., Shopify), and marketing can affect your net profit.
If you spend $5 on marketing per drone sold, your actual profit would be $10 per unit.
💡 Tip
Need more help? Get support from the Dropship team. We’re here to help with any questions you may have.