What is E-commerce And Dropshipping?
In normal E-commerce, we have an online store and we stock inventory of specific items, market it and if we get sale, we deliver it to customer.
We require a huge budget for stocking inventory and marketing those specific items.
Let’s take the example of mobile phone holders. We will need to stock them somewhere and market it. If we get any sales then we deliver it to customers.
But for any reason, we’re not able to market it properly and not getting any sales. Then all cost required in buying and storing inventory will go in minus.
A small businessman can’t start this business if we don’t have that much resource to buy huge inventory and stock it to the warehouse.
So this problem is solved by the term “Dropshipping.”
In normal E-commerce business, we used to buy and stock the inventory, but in dropshipping we only need to have an online store and need to market the product.
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Other steps of stocking inventory and delivery to the customer are done by hiring suppliers.
There are many websites where suppliers are listed like Indiamart, Alibaba. We just import that specific product to our online store, market it and if we get any sale then the fulfilment of that order is done by our partnered suppliers.
Those suppliers do work of stocking inventory and delivery to the end customer. After we get payment from the end customer, we give that specific item cost and delivery cost to supplier and they do the fulfilment part.
So we can focus more on Marketing part and we require fewer resources to start and after we get some traction to our store, we can think of stocking inventory to warehouse and do personalized fulfilment with less delivery time.
Because these suppliers may take more time for delivery. We can also partner with our local suppliers and do the same.
So you can start to sell stuff in fewer resources by dropshipping model.
Let me know if you have any questions related to it.
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