Dropshipping is a business model that allows entrepreneurs to start an online business and sell products to their customers without ever actually stocking the items themselves.
But dropshipping isn’t a new business model.
Huge companies like Amazon, Sears, and Zappos have all used this business model for a while in their early years.
And it isn’t just the big companies who use dropshipping to start an online business – an estimated 33% of the entire ecommerce industry uses dropshipping as their primary inventory management model.
Dropshipping is a model which has some very clear advantages, like not carrying an inventory, which allows entrepreneurs to concentrate more on important things like bringing in new customers and scaling their businesses.
Want to know exactly why dropshipping is adopted by such a large portion of businesses across the globe? In this article we’ll do a deep dive on what dropshipping is, why AliExpress dropshipping is so popular, and why you should care about this business model if you’re interested in starting your own ecommerce store.
Ready? Let’s dive in.
(video about dropshipping from Oberlo)
At this point you might be asking yourself, how does dropshipping work?
Maybe you’ve heard the term before, or maybe it’s your first time hearing the concept – don’t worry, it’s simple to understand regardless.
Essentially, dropshipping is a business model that allows entrepreneurs to start an ecommerce store without every stocking inventory – dropshipping entrepreneurs will have suppliers who store their products in their warehouses until they make a sale.
Whenever dropshipping entrepreneurs make a sale they’ll need to contact their supplier, who will then ship their products directly to their customers doorstep.
Benefits of Dropshipping
Dropshipping is a business model which offers entrepreneurs a bunch of advantages, especially when they’re looking to start an online business.
You control your margins – you aren’t bound to a suggested retail price (MSRP) and you can decide your retail prices on your own.
You don’t need to be an established business entity before getting started with your store (although you will need one as you grow.)
You have access to a catalogue of millions of products that you can add to your store through Oberlo using AliExpress dropshipping.