What is dropshipping and how does this business model work?
You’re probably a dropshipping beginner if you’re reading this.
Maybe you’re even wondering now what this whole dropshipping business model even means.
If so, then let’s start with learning how the dropshipping business model works:
How does dropshipping work?
They say “a picture is worth a thousand words”, right?
Well, take a look at this easy to understand image that explains how dropshipping works:
And if that’s not enough, you can take a look at this infographic as well:
And this is what Wikipedia has to say about dropshipping:
Dropshipping is a supply chain management method in which the retailer does not keep goods in stock but instead transfers its customer’s orders and shipment details to either the manufacturer, another retailer, or a wholesaler, who then ships the goods directly to the customer.
If you still don’t fully understand what the dropshipping business model means now, then don’t worry.
I will explain it really simple to you:
- You got an online store where you sell products, but you don’t have any of these products in your storage, or in your house.
- When someone places an order on your dropshipping store, then you place that same order directly with your dropshipping supplier. Don’t worry. There are a lot of apps out there that help you with automating this. For example, DSers, or these 14 DSers alternatives.
- Then your dropshipping supplier will handle the rest. Think about preparing the package and sending the order straight to your customer.
- Now your customer will receive the package straight from your dropshipping supplier, and you never touched the product in between!
The most common question people have now is, won’t my customer know that the package didn’t come from me?
For example, aren’t there any advertisements or recipes from the supplier in the package?
No.
You just need to make sure that your supplier accepts dropshipping and blind dropshipping.
You can learn more about blind dropshipping by reading this article here.
But basically, you tell your supplier to not put anything extra in the package like advertisements and recipes.
This way, your customers will only receive the product and will have no idea that you’re dropshipping!
Why is it easy to start dropshipping?
A lot of people are starting with dropshipping because it’s so easy to open a dropshipping store and start selling that same day.
But why is it easy?
Well, for example, if you compare it to opening a normal “offline” retail store, then you’re looking at an investment that you need to make before opening the store. (Source)
With dropshipping, you only pay for products when someone places an order on your store!
And not only the investment in money is different.
For the time, it’s the same.
You can literally open a Shopify store in a few minutes, and have everything set up in maybe a few hours!
But don’t worry.
I won’t teach you to do the same as that.
It’s better to take your time when building your dropshipping store to be more unique than all the other dropshippers out there who do open their dropshipping store in a few hours.
If you’re interested in learning how to be more unique, then keep on reading. I will soon explain all the steps that you need to take to open your own dropshipping store!
And don’t forget that dropshipping is just a fulfillment method and that there are tons of big ecommerce stores out there that started with or are still using dropshipping!
Why do people do dropshipping?
So now you know how dropshipping works and why it’s easy to start, but what reasons do people have to start dropshipping?
Take a look at our great infographic to learn a lot already about why people do dropshipping:
Most people that are researching about dropshipping, and want to start/are running a dropshipping store do this for one or more of these reasons:
- Earning more money. If done right, then dropshipping could earn you money, which you can learn more about here.
- Being their own boss. Some people don’t like to work for a boss, so they search for other ways to earn an income.
- Location-independent work. A dropshipping store can be run from just about anywhere with an internet connection. As long as you can communicate with suppliers and customers easily, you can run and manage your business. This is also called being a Digital Nomad.
If you’re interested in reading more about the pros and cons of dropshipping, then I suggest reading this article here.
But is dropshipping still profitable today in 2023? Let’s find out:
Is dropshipping still profitable in 2023?
Yes, dropshipping is still profitable in 2023.
This question came every year, and will probably come in 2023 and 2024 as well.
Yes, a lot of people are starting dropshipping stores now, but if you got the correct mindset (that you’re building a real business and not a “make quick money store”), then you have a head start already!
If you’re interested in learning more about why I think dropshipping is still profitable today in 2023, then I suggest reading the article I linked to below:
Is Dropshipping Still Profitable Today in 2023? or Are You Too Late?
Can you start dropshipping without money in 2023?
No, you most likely need some money to start a dropshipping business, but knowing how to spend that money when you’re just beginning with dropshipping will definitely help you save money!
The costs will all depend on your experience and what kind of plan you’re going to follow.
Are you going to self-host your store, or are you going to use an ecommerce platform like Shopify? Don’t worry if you don’t know about that yet; I will explain it later in this article!
If you want to learn more about the costs of dropshipping, then I suggest reading my full guide that includes all the costs of starting a dropshipping store:
It will also include all the things you think cost money, but could be done for free!
Leave a Reply