Dropshipping is a retail fulfillment method in which an online store doesn’t keep the products it sells in stock. Instead, when a store sells a product, it purchases the item from a third party supplier and has it shipped directly to the customer. As a result, the merchant never sees or handles the product.
The main advantage of dropshipping is that it allows a retailer to sell a wide variety of products without having to purchase inventory upfront or manage a warehouse. This significantly reduces the startup costs and overhead costs associated with traditional retail businesses. Additionally, dropshipping allows a retailer to easily test new products and markets without having to commit to buying inventory in bulk.
However, dropshipping also has some drawbacks. Since the retailer does not handle the products, they have less control over the quality and shipping times, which can affect customer satisfaction. Additionally, the retailer typically has lower profit margins than they would have if they were buying and selling products themselves.