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What is Dropshipping?

“Dropshipping is a supply chain management method in which the retailer does not keep goods in stock but instead transfers its customer’s orders and shipment details to either the manufacturer, another retailer, or a wholesaler, who then ships the goods directly to the customer.”

Definition according to Wikipedia.
Have you heard of Dropshipping?

I have been doing full time online selling since about 6 years ago. Never heard of this phrase – “Dropshipping “?! Since we had circuit break in Singapore, I started to see advertisement trying to get people to do dropshipping, very often on social media. And, when I get to understand what this is all about. To my surprise, its actually quite a simple concept.

So, What is Dropshipping all about?

When I started selling online about 10 years ago, “pre-ordering” was very popular. You can post some pictures of products that your suppliers are selling, sell on your website and get customers. Once your customers paid up, then you group the orders and purchase the stock to be send to you directly. Once stock arrived, you then sort them out and send the stocks to your customers individually. It’s a zero inventory concept,  no cash flow issue. It looks like a smart way of running business. What do you think, good a not?

However,  the risk and disadvantages of running the online business this way was not in my list of  consideration when I started selling full time. Actually,  dropshipping is similar to pre-ordering except the stock don’t comes to you, they goes direct to your buyers. And everything else are done online.

Ok, if you still catch no ball (don’t understand) what is dropshipping. Let me show you a simple example.

For instead, if you love Animate and let say there is this uncle selling some cool Animate stuff in your neighbour. You visit the stall very often. Then, recently you took up some digital marketing courses. You went to this uncle’s stall, took some nice pictures of the stuff on sales. You do up a nice website, put up those stuff on sales with a FAT markup and you get more traffic to your website by doing some digital marketing via social media.

Once you got a deal paid up, you then go to the uncle’s stall, get the stuff and mail to your buyer. Basically,  the concept of dropshipping is similar,  except this uncle stall is a online supplier and you just get the supplier to mail your order directly instead of coming to you.

Honestly,  I am not a fan of “Dropshipping”. There are too much risk, to me reliability and reputation are important when comes to business. Furthermore, selling via dropshipping, you have no control over product quality, fulfillment speed, or return policies. Therefore, unless you know your suppliers very well, they are reliable and responsible sellers. However,  if you are a dropshippers, I am fine to be your ‘uncle stall’ (supplier)….Haha.

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1 thought on “What is Dropshipping?”

  1. An wise reading with some brilliant words about dropshipping and I got a huge knowledge about the topic which is really important to know. I hope people will find a lot of information through this posting. By the way, I am going to bookmark the site for further assistance. Thanks and keep up the good work!

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