What is a Dropshipping Business

A dropshipping business is when there are three groups of people: the customer, the seller and the merchant. The customer is the person who is buying the product. They interact only with the seller who is the dropshipping business.

The seller is someone who advertises products on their website and creates a portal where a customer can make a transaction to pay for goods. The seller has all the interactions with the customer but also communicates with the merchant.

The merchant is the stockist, most of whom are the manufacturers, of the products that are for sale on the seller’s website. The merchant will package and send any orders that are made on the seller’s website on their behalf, using the seller’s branding. The merchant will collect a percentage of the sale from the seller (and all of this is done by integrating dropshipping apps).

In this scenario, most customers won’t realize that they’re buying from a third-party website such as Shopify. Their interactions and the products will all be branded with the seller’s colors, name, etc.

No, dropshipping and affiliate marketing are completely different. In affiliate marketing, the customer is taken to the merchant’s website to complete a transaction. The merchant then delivers the products under their own branding and will pay the seller, who is really an advertiser, a commission. The advertiser takes no money from the customer.

There are also fewer conversions from affiliate marketing because the traffic that is generated to the merchant account is not guaranteed to convert. Therefore, it can be harder for affiliate marketers to make money from their efforts.