If you have been interested in starting an online business, I am sure that you heard the term dropshipping. It is a term that has attracted increased attention in the last few years. But what does it mean, and how can dropshipping help you grow an online business? We are happy to answer these questions and help you learn everything you need to know about dropshipping as a beginner.
Lets begin with what dropshipping is. Dropshipping is an online business model in which you ship goods to your customers directly from a third-party supplier. The intermediary step, such as storing the goods or hosting a physical business location is missing. How does it work, step by step? It is easy:
- A customer places an order for one of the products from your business.
- You receive the order, but pass it to your dropshipper.
- When the dropshippers receive the order, they charge you for the wholesale price of the product plus dropshipping costs. They package the goods and ship them to the customer. It means that you dont have to store the goods yourself or package and ship them.
Dropshipping is a good business model for those who want to try an online business but are not willing to invest a lot of money in an initial inventory. Also, you dont have to handle the inventory yourself, manage its storage and find attractive packaging options. One of the biggest advantages of dropshipping is that you only pay for the product when the customer pays for it, which makes this option such an attractive one for those who want to start a business, but dont have lots of money at disposal.
Did we convince you that dropshipping is an online business model that deserves attention? If we have, we think that you should learn more about how to dropship on Amazon. Amazon is the biggest online retail store, offering a wide range of products worldwide. Since everybody knows what Amazon is, it is also one of the most visited online retail stores. Amazon allows drop shipping, but only if you respect a few rules. Here they are:
- You must be the seller of all the products in your online store.
- The products invoice and the packing slip must contain your information.
- The third-party supplier must not appear on any part of the order.
- You are the one who handles the concerns coming from your customers.
- You must abide by all the terms mentioned in the seller agreement, according to Amazon policies. It means that you should carefully read the seller agreement before you decide to launch a dropshipping business on Amazon.
If you wonder whether or not Amazon dropshipping is profitable, you should know that it can be lucrative, with a profit margin placed between 10 and 30 percent. Amazon also takes 15% off your profit, so consider this when you do the math to see whether or not you should try it. In simple words, if you want to get rich, you need to invest in marketing and attract lots of customers.