Dropshipping

Dropshipping Definition

Dropshipping is an e-commerce strategy where sellers list products online but rely on external suppliers to fulfill and ship orders directly to customers. It reduces upfront costs and inventory management but requires effective marketing and supplier partnerships.

How Dropshipping Works

• Sellers set up online stores listing supplier products.
  
  
• Customers place orders on the store's website.
  
  
• The supplier handles inventory, packaging, and shipping.
  
  
• Sellers earn the price markup between supplier costs and retail price.
  
  

Example of Dropshipping

A Shopify store markets home decor products sourced from overseas suppliers, with orders shipped directly to customers.

Why Dropshipping Matters in Advertising

• Lowers barriers to entry for e-commerce businesses
  
  
• Enables scalable online retail with minimal inventory risk
  
  
• Relies heavily on advertising to drive traffic and sales
  
  
• Offers flexibility but demands careful supplier and brand management