Dropshipping

Dropshipping is an e-commerce business model where the retailer sells products without holding them in stock. Instead, the retailer forwards the order details directly to a third-party supplier or manufacturer, who ships the goods on behalf of the retailer to the end customer. The seller thus acts as an intermediary between the customer and the supplier.

A key advantage of dropshipping is the low financial risk. Since large inventories do not need to be pre-financed, retailers can start a business with minimal initial capital. The costs mainly arise from creating an online shop, marketing efforts, and purchasing products only after a sale.

Another feature is the flexibility and scalability. Dropshipping allows retailers to offer products from various categories without being tied to a specific inventory. Retailers can easily adjust their product range and test new trends since they are not bound by stock levels.

Example: An online shop for kitchen accessories could use dropshipping to offer kitchen knives from various manufacturers. When a customer orders a knife, the third-party supplier is notified and ships the item directly to the buyer, while the shop operator only manages the sale.

Dropshipping is particularly attractive for beginners in e-commerce as it reduces logistical effort and minimizes financial risk. However, factors such as product quality, delivery times, and customer support heavily depend on the chosen supplier, which is why carefully selecting partners is crucial.