How Does Dropshipping Work? updated 2020

If you are an e-commerce entrepreneur (even an aspiring one), you must have heard of dropshipping. It is an exciting new form of e-commerce that is inspiring massive change in the way business works all over the globe. There is so much craze that countless new dropshippers are coming up every single day. Do you want to be among the herd? Or would you rather stand out from the crowd and establish your own brand standard in the market? If you chose the second, you have to first understand how this whole drop shipping deal works. Here’s the breakdown:

Retailing – The Traditional Way

Anybody who knows anything about doing business the traditional way understands how the margins work. You buy in bulk from a wholesaler and you retail each unit individually. Your net profit is the difference in buying price and selling price – pretty basic and simple. This is the premise of all retail commerce including e-commerce.

Now, what is the problem with this method? We’re going to discuss exactly that below.

The Problem with Etailing

Ecommerce works on the same principle as regular old commerce. The only difference is that you sell online, and so depending on your delivery domain, you can target a much larger audience or market than a normal physical shop. Naturally, this requires a lot of investment risk. Your products may not sell as well as you expect. There is always a risk of a batch of products being defective. Even returns is a big hassle you have to deal with. Soit is easy to see why a lot of people prefer regular old jobs over being their own boss and running a business.

But isn’t there any better way of doing business and making money? Yes, there is! This is where dropshipping comes in.

Enter Dropshipping

In dropshipping, the basic idea is that you partner up with a dropshipping company like Knawat which can supply you the right products as and when required.

You have your online store ready and a customer places an order. Now, you go to your partner and place the order. Your partner buys the product at wholesale and delivers it to your customer. The profit that you get is the retail price of the product you just sold minus the wholesale price and the delivery charges. Simple!

This process gets rid of a number of problems.

First, you don’t have to keep inventory, which is a big help to anyone not wanting to invest a lot of money in a business and risk losing it if the enterprise fails.

Second, you save money on logistics. Your partner company does all the delivery and merely hands you the profit you make through the sale.

Third, you get to focus solely on growing the enterprise bigger and better with each passing month and year.

Is Dropshipping for You?

Dropshipping is for anyone who wants to become financially independent and make something of themselves. With minimum investment and maximum returns, it can be your side gig until your business starts to boom. Then you can become a full-time dropshipper and make millions with just a few clicks. Click here and start now!