What is dropshipping?
Everything you need to know about dropshipping
Barbara Racz avatar
Written by Barbara Racz
Updated over a week ago

Dropshipping is a business model, a retail fulfillment method for online merchants. With this method, retailers can start and manage their online store without having real, physical inventory, without upfront investment in product stock. They are having virtual stock and filling their online store with their suppliers’ product data. The capital investment in the business is much less than what it would be when purchasing products initially. There are three parties in this chain: customers, online retailers, and suppliers.

In traditional dropshipping, suppliers ship the products directly to customers. The suppliers send only that products to the customer that the customer just ordered from the retailer's store. Packages travel one by one from the supplier. The retailer doesn’t stock them in bulk. The customer pays for the item for the retailer, then the retailer pays for the supplier. The reseller doesn’t have to purchase the products only after a customer has already paid for them. It is easy to kickstart an online store with the dropshipping model, and the product portfolio of the business can be changed and broadened without any hassle.

The retailer has to either use a system that manages order data synchronization automatically or when they receive an order request from a customer, they have to go to their suppliers' website to place the order with the customers' shipping address.

If the retailer decides they can ask for the products to arrive at their place first, and not directly to the customer. The advantage of this is that if a customer orders three different products for example, and these belong to three different suppliers, the customer will not receive three packages on different days. The products can wait for each other at the retailer, who then can repackage them and place them in one box. This is another reason why it is worth working with local suppliers, for fast shipping. The retailer still doesn't have to rent a warehouse as their living room or garage is enough to place those 1-2 packages in the beginning.

A few disadvantages of dropshipping are that you usually get lower margins from suppliers than in the standard retail model, moreover, if you work with multiple companies there can be shipping complexities. You also have to make sure the source you get products from is really reliable to not find yourself in a situation when the supplier disappears without a trace.

Work with real B2B suppliers, manufacturers, factories for reliable service and reasonable, competitive product prices. Try to avoid reselling other resellers' products!

In Syncee Marketplace, we list dropshipping suppliers from all over the world with excellent products. Register now, and check the selection! Upload and update product data easily into your online store! Suppliers will take care of the logistics instead of you, and Syncee will manage your product data synchronization.

Should you have any questions or need any assistance, let us know via the in-app chat or e-mail at support@syncee.co.

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