Dropshipping is not a new term in e-commerce. It was used first time in 1999 by Zappos. Big companies like Amazon and Sears apply dropshippping model. Nowadays about 33% of the e-commerce industry uses dropshipping
Dropshipping is a supply chain management method. Retailers don’t keep products in stock. They will transfer orders and shipment information to manufacturers or wholesalers. Then manufacturers or wholesalers must ship products to customers. Products are shipped directly to buyers. Online stores are not in charge of bringing goods to customers.
Dropshipping is suitable for both small and big businesses. Small businesses which don’t own inventory places will use this transportation method. They don’t have to pay to hire or buy inventory places. Small businesses can invest in other processes. They don’t need employees to manage inventory.
Like small businesses, big companies also apply dropshipping model. Alibaba and Amazon are giants in dropshipping field. They help agencies and shops ship orders to purchasers. They are like the third party getting orders, taking products from suppliers, then transferring them directly to customers.
Store owners just upload products on their website. When a customer places an order and does a payment. The store owner will order the same product from the manufacturer who will send the product to the customer.