Drop shipping is a retail business that entails outsourcing products and shipping to a third-party supplier. It is another way of selling online without a physical store. As a seller, your responsibility is to promote items instead of keeping warehouses or managing inventory.
As a drop shipper, you’re the intermediary between suppliers and customers. You don’t get paid for items until they are purchased by customers. When you get orders, you link them to wholesalers or manufacturers who directly send the goods to the customers.
Below is the step-by-step guide on how drop shipping works:
1. Set up an online store
As the retailer, you would create an online store where you would sell your selected products from a supplier or marketplace. It is in this virtual store, you would showcase, describe, and give the exact price of a product. Your customers have no business with your suppliers; you are the intermediary that gets the deal done and ensures your wholesaler sends the purchased items.
2. Customer order
Your potential customers would browse through your online store to purchase what they want. They pay you based on the price tag you’ve given. Your payment system should be legit and easy to navigate; otherwise, it can slow down sales. Build trust with your customers; they will keep coming back.
3. You send the order
As the retailer in this business, your duty is to send the order of your customer to the supplier once payment has been made. You send the wholesale price (which is actually less than the price you sold the item) to the supplier and the details of the customer. Drop shipping platforms automate this process, so, no hassles.
4. Supplier processes the order
Here, the supplier takes over. They are responsible for packaging the product for shipping. This means you’re exempt from the logistics involved in sending goods. A trustworthy supplier will not compromise quality and will also ensure the right product is packaged and sent to your customer.
5. Customer receives product
It is expected that after the goods have been sent by the supplier, your customer will receive their order. As the retailer, you still have to be in touch with your customers to know if there is any concern or complaint about the goods they ordered. This is how you can strengthen your relationship with your buyers and, of course, your brand.