- The customer places an order in the online store and pays the retail price for the product.
- The seller places the order with the supplier through the system or manually.
- The supplier processes the order.
- The seller pays the wholesale product price to the supplier.
- The product is shipped by the supplier to the customer.
Dropshipping: What To Pay Attention To When Choosing This Model?Every business bears some risk. The situation is no different when it comes to dropshipping. The risk comes after transferring the order to the supplier. At this point, the online store doesn’t have any control over the delivery time or the quality of ordered goods. Therefore, one of the most important factors when choosing a dropshipping wholesaler or manufacturer is to determine the conditions related to shipment, complaints, and returns of products without providing a reason by the customer. In case of faulty items or delivery problems, the online store owner who sells through the dropshipping model needs to face the customers. The choice of the supplier should also depend on the amount of offered products. The more goods offered by the store, the more lucrative the contract is.
Pros And Cons Of DropshippingThe main advantages of dropshipping include:
- no need to take care of logistics related to order processing,
- reduced costs of running an online store thanks to not having to have a warehouse,
- saving time - no need to ship packages, settle transactions, or order goods,
- quick delivery to the customer,
- the possibility to start selling with a low budget.
- the risk that the ordered product is out of supplier's stock,
- high cost of handling a single order,
- difficulties in doing SEO for the store,
- lack of diversification.