1. What is Dropshipping?

Dropshipping is a retail approach where the store doesn't maintain inventory. Instead, when a customer places an order, the store forwards the order and payment to a dropshipping supplier, who then handles shipping directly to the customer.

Many entrepreneurs favor dropshipping because it shifts the responsibility of order fulfillment to the supplier. This allows stores to avoid investing in warehouse storage or dealing with unsold stock. As a result, businesses can focus their resources on other areas like marketing.

It's estimated that dropshipping contributes over $300 billion to ecommerce sales annually.

2. What Is a Dropshipper?

A dropshipper is an individual or business that takes customer orders and forwards them to a supplier for fulfillment.

Dropshippers typically operate online stores, promoting and selling products. When a customer purchases an item, the dropshipper submits a matching order to the supplier.

For example, if a customer orders a cat collar from your online pet store, as the dropshipper, you would send the order to your cat collar supplier, who holds the inventory.
 

3. What Are Dropshipping Suppliers?

Dropshipping suppliers handle order fulfillment for retailers, acting on behalf of the customers. They manage product storage, package the items, and coordinate shipping to the customer's address.

You can either partner with a specific supplier or use a platform that lists multiple suppliers, like AliExpress. Additionally, some manufacturers, wholesalers, and independent creators also offer dropshipping services.

In the pet store scenario, the business responsible for receiving the order, packing the cat collar, and sending it to the customer is the dropshipping supplier.

4. How Does Dropshipping Work?

Here’s a step-by-step guide to how the typical dropshipping process works:

(1) Choose a dropshipping supplier Begin by finding a supplier that offers the products you want to sell. Once an agreement is in place, the supplier will take care of product storage, packaging, and shipping when customers make purchases.

You can collaborate with a supplier within your niche or use a dropshipping platform to access products from multiple vendors.
(2) Create an online store Set up your online store, listing products from your supplier at the prices you choose.

To streamline the process, add a dropshipping app that syncs product listings and automatically forwards orders to suppliers:

• DSers links Shopify stores to AliExpress.
• Zendrop offers over a million products in its catalog.
• Spocket connects to suppliers from the US, Europe, Brazil, and India.

(3) Get a customer order When a customer shops at your store and places an order, the checkout works as usual. The customer pays, gets confirmation, and awaits delivery.

(4) Send the order to the supplier Once the payment is received, forward the order details to your dropshipping supplier. If you use a dropshipping app, this step is handled automatically.

(5) Supplier prepares and ships the item The supplier processes the order, packaging and shipping it directly to the customer. Many suppliers offer the option for custom packaging and branded invoices to elevate the shopping experience.

(6) Customer receives the order The customer receives their product, while your store manages any follow-up customer service.
 

5. Benefits of Dropshipping

Here are seven reasons why dropshipping has become a favored ecommerce model for businesses:

(1) Low startup costs Since you don't need to purchase inventory upfront, dropshipping requires very little initial investment. Many dropshipping businesses operate from home with just a laptop, making it an appealing option for small business owners.

However, this advantage also brings competition from other dropshippers, so you’ll need to invest time and effort, using expert strategies to succeed.
(2) Broad product range Dropshipping allows you to offer a vast selection of trending products. Without the worry of unsold stock, you can easily update or expand your catalog. As soon as a supplier adds a new item, you can list it in your store right away.

(3) No product development expenses Dropshippers don’t have to spend money on research and development for new products. Instead, they can simply sell items that have already proven successful in the market.

(4) Work from anywhere You can run a dropshipping business from almost any location with internet access. As long as you maintain communication with suppliers and provide good customer service, there are few geographical limitations on where you can live and operate.

(5) Simpler to launch Dropshipping eliminates many traditional retail challenges. Running an ecommerce business becomes more straightforward when you don’t have to:

• Manage or pay for warehouse space
• Track inventory levels
• Package and ship orders
• Handle accounting for stock
• Manage returned products

That said, successful dropshippers still carefully manage the fulfillment process and prioritize customer satisfaction.
(6) Easier to experiment Dropshipping is an excellent way to test customer demand for new product categories. You can trial selling dropshipped items before committing to purchasing large quantities of inventory.

(7) Efficient scaling Scaling a conventional retail business requires careful preparation. Handling a sudden influx of orders can be difficult and may lead to stock shortages.

In contrast, dropshipping businesses can scale more easily. You can also grow your business by selling on major platforms like Amazon, eBay, and Etsy.

6. Disadvantages of Dropshipping

Like any retail model, dropshipping comes with its own challenges. Here are three potential drawbacks to be aware of:

(1) Lower profit margins The ease of entry into dropshipping can create stiff competition, often driving prices down and leading to thinner profit margins as businesses try to outprice one another.

The more you lower your prices, the more difficult it becomes to maintain profitable margins for your store.

You can address this issue by carefully selecting profitable products and focusing on a less crowded dropshipping niche.

(2) Unpredictable inventory Although dropshipping offers convenience in inventory management, it also exposes retailers to sudden fluctuations in product availability.
 

Since suppliers often serve multiple retailers, stock levels can change quickly—something you have more control over when managing your own inventory.

Dropshipping apps like DSers help mitigate this by providing options when a supplier runs out of stock. For instance, you can automatically hide the product or label it as "Sold Out."

(3) Complicated shipping logistics When working with several suppliers, fulfilling orders can become tricky. If a customer orders multiple items from different suppliers, you’ll need to account for separate shipping fees for each, and the products may arrive at different times.
 

If you’re sourcing from international suppliers, cross-border shipping can add another layer of complexity, making it harder to resolve issues when problems arise.

One option is to pass shipping costs to your customers, though this could make your pricing less competitive.

7. Boost Your Dropshipping Sales with BigSeller

Besides, you can also use BigSeller to expand your dropshipping business

BigSeller is a free Southeast Asian e-commerce ERP system that provides e-commerce sellers with one-stop e-commerce solutions. By using it, dropshipping sellers can easily and quickly scrape  trending products from the marketplaces, significantly boosting operational efficiency and helping you stay ahead in the competitive e-commerce landscape.

BigSeller also allows you to effortlessly copy product data from your different online stores, transfer them between your stores with just a few clicks. This feature helps you rapidly expand your product offerings, save valuable time, and maximize your sales potential.

There are also many features that can helps you with dropshipping, such as order processing in one place, inventory auto sync, order notification, overselling prevention etc.

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