Building your ecommerce business: How to use drop shipping
The drop shipping market is currently valued at over USD 149.4 billion and is expected to reach USD 557.9 billion by 2025. Over 33% of all online stores use it. So what is it?
Drop shipping is a supply chain method in which the retailer does not keep any goods in stock. When an order is received, the retailer purchases the items from a third party and has it shipped directly to the customer. It’s the original Amazon book distribution model.
So … how do you use it to make money? As a retailer, you will make their profit on the difference between the wholesale and retail price less associated costs. Easy, eh? Well …. It still requires research to source appropriate products, work out your profit margins and build your market niche. You also need a strong brand presence, social media and promotion, reliable shipments, and good customer service.
You can set up your own online store – or you can use platforms such as Shopify, Amazon etc. They provide easy links to drop ship product suppliers such as Oberlo, AliExpress, Magento etc. Ensure you do your homework before you proceed.
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