Dropshipping is a method of selling and distributing goods wherein the distributor or supplier of the product (the dropshipper) sends the product directly to the end user (your customer) on the retailer’s behalf (that’s you).

The process of dropshipping is relatively simple. It involves three parties who take a product from manufacturing to market.

Let’s use a blue widget as a sample product to demonstrate the process:

  • The blue widget manufacturer: This is the company that manufactures the blue widgets.  This widget manufacturer does not sell directly to the public or supply the retailers who ultimately sell the blue widgets to the end user.  They prefer to use distributors to handle the task of taking their blue widgets to market.  The manufacturer sells blue widgets by the truckload to distributors and charges $5 per blue widget.
  • The blue widget distributor (dropshipper): This is the company that purchases blue widgets in bulk from the manufacturer and supplies them to resellers and retailers at a cost of $7 each. The distributor does not ship blue widgets to the retailer, but fills orders on the retailer’s behalf as the retailer sells the widgets to its customers.
  • The blue widget retailer: This is the company that sells blue widgets to the public.  In this example YOU are the blue widget retailer.  The retailer orders the blue widgets from the distributor as they are sold (usually one at a time) and has the distributor ship the blue widget directly to its customer.  The retailer sells blue widgets to the public for $10 each, which means that for every blue widget sold the retailer nets $3.

Note: It is not unusual for the manufacturer and distributor to be one and the same.

also read , advantages of dropshipping

For a comprehensive list of dropshippers with more than 100,000 products  ,  visit the dropshippers list

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