Dropshipping has become a very popular concept and many products are sold to customers with the help of this concept. Dropshipping is a supply chain management technique in which a retailer does not keep the products it sells in stock. When you purchase a product from such a retailer, you will transfer the order directly to the manufacturer or wholesaler and the products will be delivered directly to you. Many people may not even know that they have purchased products that will be shipped directly. In this article, we’ll find out more about how dropshipping works and what you should consider before selecting the right dropshipper.

Once a retailer receives an order from a customer, they will send it to a wholesaler or manufacturer, and they will then ship the products directly to the customer. Just like with any other retail business, the retailer makes its profit from the difference between the wholesale and retail price. Retailers that sell products with the help of a dropshipper will often keep display items in the store that the customer can inspect. These display items are often exactly the same or very similar to the product that will ultimately be delivered to the consumer. Some retailers may only provide a catalog or website from which the customer can select their product.

Sometimes retailers prefer to hide the fact that they will drop-ship products to avoid stigma. This is achieved with the help of ‘blind shipping’ where products are delivered without a return address. Sometimes retailers use ‘private label shipping’, in which case the merchandise will have the retailer’s return address even though it was shipped from somewhere else. Dropshipping is widely used by small businesses and online auctions. Many custom products are shipped directly to the customer. Sometimes even retailers that keep stock end up shipping an order if it’s too big.

The main advantage of dropshipping is that it eliminates a lot of inventory and handling costs. Since a wholesaler or the manufacturer itself will pack and ship the products, a lot of inventory and handling costs are eliminated. This leads to the customer getting the product at a reduced price. As with any other business, there are also risks involved with drop shipping. One of these risks is backorders. Once the retailer ships the order to the wholesaler, it may happen that the products are out of stock. This will mean that the customer will have to wait a long time to receive the merchandise. This will reflect negatively on the retailer. When you start a new business and select a dropshipper, you should look at what kind of uptime guarantee the dropshipper provides. You have to keep in mind that you are selling products without having them on hand. You need to be sure that the dropshipper will have the products available once they have sold them to a customer.