What Does Dropship Mean

Dropship is an abbreviated version of dropshipping. This is a business model where there are three parties in a transaction. The first person is the customer. They are someone looking for a product to buy, the access a website of the seller who offers one or a range of products and the customer makes a purchase based on their needs.

The seller takes the money from the customer and then contacts the merchant. The merchant is the person who actually stocks the product and they will then fulfill the order by sending out the products to the customer under the branding of the seller. The merchant then takes a cut of the sale from the seller. The customer has no interaction with the merchant, they are invisible to the customer.

The seller is completely responsible for the sale including legal aspects, returns, replacements and all. The difference between what the customer pays and the price the merchant charges is the profit that the seller makes.

There are numerous benefits of dropshipping.

• The first is that the seller can gain access to a large catalog of products without needing to spend any money on stock or inventory. Nor do they need huge spaces for storage of this stock. This is all taken up by the merchant who produces (or buys in) the product and stocks it at their own warehouse. The seller only pays for stock when an order has been made by a customer.
• The seller also has more time to spend on marketing and customer service because they don’t have to deal with any element of stock-taking, stock purchasing or fulfillment. This is handled by the merchant.
• This can have huge benefits for all parties as it allows for the customer to have higher levels of customer service. It can also help the seller to market more and attract more traffic to their website that will lead to more sales.
• The merchant also benefits because they don’t need to market the products themselves. They just need to manage the stock and package the orders, which is the same amount of work they would need to do if they sold to businesses.
• Dropshipping can also be more environmentally friendly. It reduces the amount that stock is moved across the world. In addition, some systems require items to only be produced when ordered, so there are fewer wasted materials.