How Does Dropship Work?

How Does Dropship Work?

Sunil Patel
Businessmen, Ecommerce Specialist, Youtuber .

Drop ship works on a bit complex business model and hence not many people are yet able to understand the detailed procedure about this concept. In dropship, products are sourced and supplied from someone else and sold by someone else too. So its like a partnership off the record where a supplier does the back end work and seller does the work of bringing the business. 

This business model works in favor of both the parties because the seller who cannot afford to but our source products in bulk can take the advantage of such suppliers who can provide the material to them. And the suppliers who cannot afford to generate so many orders or clients will take the benefit of sellers. 

Team Work

Its a pure team work that brings success to both the parties based on certain reasons which will also help you understand how dropship works. 

Before we discuss about the process, we need to understand who all are involved in this process just to ensure you get it right instantly. These people all the type of components involved in this process plays a critical role in making it successful.                            

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In dropship business if the seller are the promoter of the product who wants to sell that product is not able to sell the product because he cannot buy the product and keep the stock with him will obviously think of a solution where he or she can shows the product from someone who can give it to him or her whenever he gets the order. So imagine a situation where you are a seller and you are selling the product to a customer but you are not keeping a stock with you.

Now the question is who is keeping the stock? Now comes the dropship provider who is keeping the stock, who is the real, sending the material to the customer, handling each and every back end operations that is required to process or complete that order.

Now in ideal situation there are two ways the Drop Ship business is working. One is when the seller gets the order and then process a COD order which means a cash on delivery order and when that order gets delivered to the customer that amount is collected by the courier company and it goes to the dropship provider and the margin amount which is collected by the dropship provider is paid back to the dropshipper.

The other situation is when there is a prepaid order. In this situation the dropshipper on the person who is selling the product page for the product of front and then the dropship provider packs and send the product to the customer and gets the product delivery done. So in both the cases the dropshipper is not keeping any stock neither is doing any back end operations or work such as packing the material or sending the material to the customer or managing the return and so on.

At the end of the day the seller who is doing all the hard work for selling the product is playing his part in drop shaped business model at the same time the supplier who is packing the material on behalf of the seller and managing all the stocks and inventory is playing is path from is and as well.

How it Works

Dropshipper Selling The Product

Does the selling and promotion of the product 

DropShip Provider who kees stock

Takes the responsibility of managing all backend work

Customer who enjoys the benefit

Enjoys the benefit of low price of products

How To Start Dropship Business in India

You can refer to this video to know more about dropship business in India.

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