Dropshipping is a commercial cooperation between the owner of an online store and the supplier of a given product, in which the seller is limited only to collecting orders and sending them to the wholesaler. What is Dropshipping? How does it work in practice?
What is Dropshipping? What is the sales and logistics model?
Dynamic development of e-commerce led to the creation of new sales and logistics models. One of them is Dropshipping. What is Dropshipping? Within this model, the seller is relieved of the duties related to the handling of orders and shipment of goods and deals only with marketing and sales.
Dropshipping is a commercial cooperation where business partners (seller and wholesaler) enter into an agreement defining their obligations:
- The vendor deals with the promotion and sale of given products.
- Wholesale deals with warehousing of goods, receiving orders and sending products to customers.
What is Dropshipping? What are the advantages of such cooperation?
More and more wholesalers introduce a new service to their offer, i.e. Dropshipping. Such an agreement can be concluded with suppliers of food, electronics, sports goods, product packaging, supplements and nutrients, underwear and clothing, toys and even erotic gadgets. According to this model, the duties of the wholesaler with which the store cooperates include: order picking, logistics support for after-sales processes, order processing and shipping to the customer, as well as handling complaints and returns. The customer orders the goods in the shop, but the shipping and handling of the order is the responsibility of the supplier of the product.
Dropshipping is a solution especially recommended for small and medium enterprises. The benefits for the seller are:
- no need to rent and operate a warehouse
- relief from the obligation to perform contracts
- maintaining low operating costs
- lower risk related to capital investment in commodities
- possibility to develop the shop without large financial outlays
- wide access to various types of products
In this way, the seller is relieved of many duties and can only focus on promotion and what is most important to him, namely sales!