Dropshipping
Selling without your own stock
Dropshipping is an e-commerce model where you sell goods without holding them physically in stock. You forward the customer’s order to a supplier, who ships the goods directly to the customer on your behalf. You take care of the store, marketing, and customer support, not the warehouse and logistics.
How dropshipping works
The principle is simple. In your own custom e-shop you offer a supplier’s products, but you don’t buy them upfront. When the customer buys and pays, you pay the supplier the wholesale price and they pack and ship the order directly to the customer. Your profit is the difference between the selling and purchase price.
Since you hold no stock, having up-to-date information on availability and prices is essential. It’s usually transferred automatically through a product feed from the supplier, so you don’t sell goods that are no longer in stock.
Pros and cons of dropshipping
Dropshipping is appealing for its low entry costs, because you don’t tie up money in stock and don’t need a warehouse. But it also has clear downsides you should weigh before you start.
- Pro: low starting capital and no warehouse of your own.
- Pro: easy to test an assortment without the risk of unsold stock.
- Con: lower margins and strong price competition.
- Con: limited control over availability, packaging, and delivery times.
Who dropshipping suits
Dropshipping makes sense if you want to start with less risk, test demand, or expand your range with products you don’t want to stock yourself. Success, however, lives and dies on marketing and on choosing a reliable supplier, since you’re responsible for the customer experience even though you don’t ship the goods yourself.
If you want to build a long-term brand, it pays to combine dropshipping with your own products or gradually move to your own stock. That gives you better control over quality and customer satisfaction.
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Is dropshipping legal?
Yes, it’s a common business model. You still sell as a business, though, so the same rules apply as for any store: a trade license or company, taxes, and statutory consumer rights including complaints and returns.
Who handles complaints in dropshipping?
You’re responsible toward the customer, because they buy from you. Fulfillment often runs through the supplier, but communication, complaints, and any refunds are on you. That’s why a reliable, fair supplier matters.
Can you actually make money with dropshipping?
You can, but margins tend to be lower and competition high. What matters is the choice of assortment, quality marketing, and a good customer experience. Without a well-thought-out approach to pricing and promotion, profitability is hard to reach.