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What is Dropshipping Business? How Does It Work?

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What is Dropshipping Business? How Does It Work?
CJ2017-05-05 12:03:4827

Many friends who are doing foreign business often meet the question from foreigners that if they are offering the dropship service. And many people will ask: What does dropshipping mean?

What is dropshipping business?

Dropshipping is a process of order fulfillment that happens when products are shipped directly from the manufacturer or wholesaler to the final customer. A third-party retailer facilitates drop shipping through their website and digital marketing efforts and is able to make profits by the margin created by circumventing the traditional retail supply chain.

In another word, as a retailer, it means you have no need to backlog a great deal of inventory, even none inventory. When an order comes, you can transfer this order to suppliers or manufacturers, then ship to the customers who are specified by the retailers.

In the field of e-commerce, dropshipping is widely applied by a large number of e-retailers, some of the biggest shopping website also using dropshipper to supply goods.

How does dropshipping work?

Basically, there is no difference from the general wholesale business. When using dropshipping, the retailers always require you to send 10 items to 10 different customers. In this way, on your side, the shipping cost will make a big difference. What's more, single goods usually directly send to the final customers.

For foreign trade business, if you use the dropshipping way to deliver goods directly to final customers overseas, then the end customer may face the problem such as tariffs. However, you are no need to deal with this, you only need to deliver goods according to the requirement of the retailers. America does not charge tariffs on small parcels.

The advantages of dropshipping are apparently clear. As a supplier, the other side sometimes requires you to provide dropshipping service, maybe you think it is just a piece of cake and ignore it, but always spend many time and money to compete with other suppliers in several big orders. 90% of buyers all over the world, especially those small and medium-sized buyers, maybe never find suppliers through Alibaba or Trade Fair. So dropshipping through the provision of the services, you can do business with a large number of small single buyers, and its profits are far beyond the one or two big businesses.

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