Dropshipping is an order fulfillment technique where you can sell products you don't keep on site (at your warehouse or garage). Instead, your products are housed at your wholesale partners' facilities. When a customer makes an order on your store, the wholesaler packages and ships it directly to the customer. This is handy if you don't have the infrastructure to store inventory, or if you just want to try introducing some new products into your existing product line to see how they perform.
Using Dropshipping for Order Management
Dropshipping can be a useful solution for folks who want to start an online store, but haven't locked in what markets to get into or which products to offer.
There are essentially three kinds of dropshippers:
1. Full time professionals who drop ship exclusively.
This kind of seller is completely set up for outsourcing the shipping of their products. To be successful, they need to serve a niche that isn't oversaturated with other potentially established competition. They'll want to be extra vigilant with their search engine optimization best practices, since they're offering a product that is not unique to them, and is readily available from other sellers.
2. Sellers looking to expand their product catalog.
Many online dropshippers keep their core inventory or flagship products on site, and this can be a useful technique to offer upsells on accessories or other products commonly purchased with your on site products. These new products can also help to attract new shoppers who may have been unaware of your core product line.
3. Sellers who want to test new products with their target market.
This can be a smart way to try out a new product and see how it sells, without having to spend the time, money and inventory space of store a shipment or pallet of the product. If it sells, they can have the confidence to make a substantial order to keep in their inventory. If not, they are not stuck with unsellable product, and not out the cost to acquire it.
If you're interested in pursuing dropshipping check out our resources below to make sure it’s right for you and you have all the tools to be successful.