Drop shipping is a retail fulfillment strategy in which a company does not hold stock of the items it sells. When a drop shipping store offers a product, it buys it from a third party (a manufacturer, wholesaler, or another retailer) who then sends it to the client directly.
Drop shipping simply makes you a storefront that customers visit to purchase a product. In most cases, you don’t need to have physical contact with the item ordered by your customer.
The role of a business that acts as a drop shipping agent is to buy from the manufacturer or seller on behalf of the customer.
Drop shipping is a business that involves low risk and minimal cost of setting up a business. You don’t need to own the products for sale. You just need to connect the buyer to a seller. Drop shipping is a supply chain that involves;
– Producer: The goods are made by manufacturers. They don’t normally sell to the general public; instead, they sell in bulk to wholesalers and retailers.
– Wholesalers: Wholesalers acquire items from producers and resell them to retailers at a higher price. Wholesalers often carry a wide range of items from a variety of producers.
– Retailers: Retailers mark up things and sell them straight to the public.