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What is dropshipping?

In the era of e-commerce, there’s hardly a person who has not heard this word. If you have ever wondered “What is dropshipping? What is all this hype about?”, this article can explain it.

Dropshipping is the form of retail where the reseller (and you actually are the reseller) collects orders from customers and transfers them to the actual manufacturer or another reseller (supplier). In this model dropshipper doesn’t possess any stocks, he only markets the goods. However the reseller markets the goods setting the prices that are pretty higher than the ones set by the supplier, this difference is your profit.

When you open a retail store, you have 2 choices: to hold inventory, or not. You can buy products in bulk, unpack them, and ship them to your customers as you generate sales. OR, you can find a wholesale distributor (supplier) who will warehouse the items for you and ship individual items directly to your customer.

Drop ship, “pack and ship”, “direct fulfillment” – they all mean the same thing. A supplier will ship the item to your customer for you, and you never have to handle the product. Drop shipping allows the reseller to focus on marketing the business and eliminate the hassle, time, and cost of dealing with the actual products they are selling.

In dropshipping model although you don’t need to stock the goods you will still need some money at the very start. The reason is when you receive the order from the customer the money he pays won’t transfer to your account immediately but will be frozen for the safety reasons. At the same time you will have to pay for the order to the supplier which will require your own money.

AliExpress dropshipping works the same way as the traditional dropshipping business model. You copy the product from AliExpress to your own store, set your own prices/markups, and after you sell a product, you purchase it from AliExpress and have it shipped directly to your customer.

To learn more about how dropshipping works, check this video:

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